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Dry powder

Committed capital not yet called — the gap between what investors have promised and what has been drawn.

Dry powder — Committed capital not yet called — the gap between what investors have promised and what has been drawn.

Industry-wide dry powder levels are watched as a market signal — elevated dry powder across an asset class can indicate deployment pressure pushing up valuations, or simply a slower fundraising-to-deployment cycle across the market as a whole.

Frequently asked questions

Is dry powder a sign of a fund's health?

Not necessarily on its own — moderate dry powder is normal and healthy, but a persistently high level relative to the investment period remaining can indicate deployment difficulty.

Does dry powder earn a return for investors?

It typically sits called-but-not-yet-invested, or entirely uncalled, so it earns whatever the investor does with their own uncommitted capital rather than the fund's target return until actually deployed.

Nothing on this page is legal, tax, or investment advice. SeRuM is not a registered broker-dealer, not a placement agent, and not an investment adviser.

CommitmentCapital an investor has legally agreed to provide, whether or not it has been called.Capital callA notice requiring investors to fund part of their commitment. Also called a drawdown.AUMAssets under management: the total value of assets a manager runs for investors. The crude

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