The private equity industry in 2015 continued a recent trend of capital distributions exceeding the amount of capital called up, alternatives data provider Preqin reported Friday.
Last year, fund managers returned a record $443 billion to their investors, up from $424 billion distributed in 2014. This was the third consecutive year in which the level of returned capital hit a record high.
Meanwhile, the amount of capital called up by private equity fund managers in 2015 decreased by 15% from $265 billion in 2014 to $226 billion.
Preqin said the lower levels of capital called up from investors had pushed the total level of capital waiting to be deployed by fund managers to record highs.
As of the end of 2015, the industry held a total of $2.4 trillion in assets, of which $1.7 trillion was the unrealized value of investments still held by fund managers, and $757 billion was dry powder.
By the end of the third quarter, however, the industry’s total dry powder had shot up to $839 billion from $818 billion in the previous quarter. Buyout dry powder represented 63% of available capital in the industry, and had increased by 14% since December, according to the report.
With so much capital available to fund managers, Preqin said, valuations are becoming an increasing concern for the industry. As a result, some institutional investors have downgraded the projected performance of their private equity commitments.
“With the industry returning so much capital to its investors, it is unsurprising that investor satisfaction and confidence in the asset class remains high, with many investors stating in June that they planned to make further commitments before the end of 2016, and target allocations trending upwards across the industry,” Preqin’s head of private equity products Christopher Elvin said in a statement.