Private equity dry powder meets a rate path that no longer does the model a favor

NEW YORK — Private equity does not lack money. It lacks a clearing price. Limited partners want deployments. Sellers want last-cycle marks. Lenders want covenants that would have been laughed out of a 2021 credit committee.

The result is a lot of continuation vehicles, dividend recaps of the companies that can bear them, and a smaller number of true new-platform deals. Dry powder is not the same thing as dry conviction.

Firms that underwrite operations rather than multiple expansion will still close. Firms that underwrite the Fed will wait longer than their fundraising pitch implied.