Dry powder
From ACT Wiki
1.
Dry powder means cash or near-cash kept on hand by an organisation to meet future financial obligations or other expenditure.
- Private credit funds have dry powder
- "PwC adds that private credit funds still have plenty of dry powder that they’re motivated to put to work.
- 'We estimate this to be more than €50bn across Europe at the latest count,' the firm says. 'We’ve seen them offering finance to some of the larger corporates as an alternative to the high-yield bond and leveraged loan markets. By clubbing together, private credit funds can provide significant levels of finance to large clients, while sticking within their individual credit ceilings.'"
- Refinancing costs rocket - Philip Smith - The Treasurer - Issue 2, 2024, p21.
2. Mergers & acquisitions (M&A).
In the context of M&A, dry powder means the amount of capital that is available to financial or strategic buyers for investment in strategic acquisitions, portfolio companies or add-on acquisitions.
The term originates from the historical use of gunpowder in the military.
A reserve of dry gunpowder was essential to firing weapons.
