Private Equity Overhang

Private Equity Firms Reach Record Capital Overhand

Private equity firms reportedly have $400 billion in capital that is not being invested. The overhang, the gap between funds raised and equity invested, has reached a record high in 2009. According to Pitchbook Data, the capital overhang increased by more than $141 billion during 2008 with the global economic crisis causing investment activity to decline by an estimated 60%.


Private equity firms have accumulated capital increasingly since the beginning of the crisis in the latter half of 2007. In 2007, buyout firms actually had a negative capital overhang of $55 billion, meaning firms were investing more equity than they had raised that year. Since then, however, the gap between funds raised and equity invested has widened significantly with the capital overhang bouncing back up to from -$55 billion in 2007 to +$141 billion in 2008.

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Link to This Resource: Private Equity Overhang

http://privateequityblogger.com/2009/06/private-equity-overhang.html