Preqin survey of private equity investors

The tide may be turning for private equity investments, with 73 per cent of investors planning to make new private equity commitments in 2012, according to a global survey of 100 institutional investors by Preqin.

The survey found that the global financial crisis has not deterred institutional investors from private equity, with more than 80 per cent of institutional investors “feeling either more positive, or not changing their opinion, about private equity”.

Asia and emerging markets remain attractive geographical regions for the investors surveyed and small to mid-market buyout funds remain the most attractive to investors, as do distressed private equity and secondaries funds.

Almost three quarters of investors interested in the secondaries market expect to increase their level of secondary market activity in 2012, the survey found.

The Preqin survey showed that 35 per cent of investors are below their target exposure and are likely to make new commitments in 2012. Activity is most likely to come from European investors, with 42 per cent of investors in that region below their target allocation.

Almost a third of investors in the US are above their target allocations.

Sponsored Content

Investors, generally, were happy with the performance of their private equity investments, with 81 per cent of investors reporting their private equity investments had met performance expectations.

Almost two thirds of investors expect their private equity investments to achieve in excess of returns of 400 basis points over public markets, while 95 per cent of investors expect their private equity investments to garner returns of at least 200 basis points more than their public market benchmark.

According to Preqin, fundraising will remain a challenge in 2012, with more than 1,800 funds “currently on the road” seeking aggregate commitments of over $700 billion.

Manager selection, and choosing the right partner, is one of the key challenges for investors, the responses showed, but investors also plan to diversify their managers, with 38 per cent of investors planning to increase the number of GPs they invest with over the longer term. About 84 per cent of respondents said they would consider forming some new GP relationships over the next 12 months.

The structure of investing is also changing, with 40 per cent of investors looking to invest directly in private companies, 33 per cent seeking exposures through co-investments alongside the GP and 22 per cent looking to make direct investments on a proprietary basis.

Leave a Comment

Sort content by

Quality factor explained by profitability: Robert Novy-Marx

Among academic classifications, and the subsequent implementation of factor investing, “quality” is one of the newer areas of investigation. Robert Novy-Marx, the Lori and Alan S. Zekelman Professor of Finance at the University of Rochester, is leading the charge on the academic justification of quality as a factor, although he has a “jaded scepticism” about

How to allocate assets to combat climate risk

  Mercer’s extensive climate change report, launched today, gives investors a practical framework for monitoring and managing climate risk, shifting the discussion from philosophical agreement to practical investment implementation.   In Investing in a time of climate change Mercer outlines extensive dynamic investment modelling that analyses changes in the return expectations of assets between 2015

Behind Norway’s coal divestment

The Norwegian Parliament’s finance committee recommendations to direct the Government Pension Fund Global to divest from companies that generate more than 30 per cent of their output or revenue from coal-related activities, is the evolution of a climate-related investment strategy that dates back to 2010. Amanda White explores the raft of tools the fund uses

CalPERS gives its managers ESG ultimatum

In what promises to be a transformational moment for ESG integration and investment manager accountability, CalPERS will require all of its managers to identify and articulate ESG in their investment processes. CalPERS staff led by Anne Simpson, senior portfolio manager and director of global governance, presented the ESG manager expectations, and draft sustainable investment guidelines,

Sourcing liquidity in fragmented markets

As equity trading becomes more fragmented, and more trading is done outside exchanges, it is prudent to assess whether alternative liquidity pools contribute to well-functioning markets. Norges Bank Investment Management has done the work for you, analysing the contributions, structures and functions of trading venues with limited pre-trade transparency. One of the benefits of liquidity

Factors the same in credit and equities

Robeco will launch the world’s first multi-factor credit fund, after academic research by its quantitative research team reveals that size, low-risk, value and momentum factors have economically meaningful and statistically significant risk-adjusted returns in the corporate bond market. David Blitz, co-head of quantitative strategies at Robeco in Rotterdam, tells Amanda White why an active approach makes

Previous