UK-managed dry powder increases to £190 billion
In recent years, UK-managed private equity and venture capital funds accumulated increasing levels of dry powder, reflecting strong fundraising activity and cautious capital deployment amid wider macroeconomic uncertainty.
The latest analysis conducted by the BVCA revealed that UK-managed private equity and venture capital funds have approximately £190 billion in committed but un-invested capital also referred to as dry powder. This capital is expected to be deployed over the next 3-5 years with around half of this capital being invested domestically based on historical trends. Our analysis shows that around 9% of this dry powder is at the disposal of venture capital funds with rest managed by private equity funds.
To estimate the total amount, the BVCA collected firm & fund level dry powder information from BVCA members as part of the annual activity survey via the European Data Cooperative. If dry powder data has not been provided as part of the submission, it was estimated based on historical data and adjusted for fundraising / investment amounts. Dry powder information for non-members with funds managed from the UK was based on fund size data obtained from public sources, factoring in fund vintage year and typical capital deployment schedule to estimate remaining dry powder amount as of 31st December 2024. Data for both members and non-members was subsequently combined to approximate the total amount of dry powder across funds managed from the UK. Please note that the conducted analysis does not include infrastructure funds, real estate funds, private debt funds, distressed debt funds, funds of funds, accelerator/incubator funds or business angel activity.
Looking ahead, General Partners are expected to scale back plans for large fundraising rounds in upcoming years and instead prioritise the deployment of previously committed capital alongside distributions to Limited Partners. As a result, we are likely to see a gradual decline from current peak levels of dry powder in near future.
Authored by Martin Senk,
Senior Research Manager, BVCA
