“Too much capital chasing too few deals”?
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“Too much capital chasing too few deals” is a common refrain in the direct lending market. Is it true? It doesn’t appear to be, according to PitchBook’s Annual Global Private Debt Report. Globally, the direct lending market has about 2.5 years of dry powder on hand. According to PitchBook’s calculations, that’s the lowest level since 2014. In 2018, the market had about 3.6 years’ worth of dry powder on hand, and that metric has been on a steady decline over the past four years.