Dry powder is what investors have promised a fund but the manager hasn't called yet. Promise $1B, call $400M, and the other $600M is dry powder. It's a promise, not cash.
What the film says
In private equity, dry powder is the money funds haven’t spent yet. But it isn’t sitting in a bank. The money is still with the investors. They promise a fund $1B. The manager calls $400M for deals and fees. The other $600M is dry powder. It’s a promise, not cash. When the investment period ends, most of what’s left never gets called. That’s dry powder.
In the glossary: Dry powder
A simple example with round numbers, not advice. Terms vary by fund.
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