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

A sustainable financial system on the agenda at Davos

The United Nations Environment Programme’s Inquiry into the Design of a Sustainable Financial System will present its interim report in Davos this week. The report has been initiated to advance policy options to improve the financial system’s effectiveness in mobilising capital towards a green and inclusive economy, and the interim report profiles innovations in five

Do pension funds add value?

Asset owners, on average, add 15 basis points of value above their asset class benchmarks after fees, according to an extensive study by CEM Benchmarking. The survey, which measured 6,666 data points from a global set of defined benefit plans, and some sovereign wealth funds and buffer funds, from 1992-2013. Gross of investment fees, funds

OECD calls for policy solution to long term investing barriers

Governance of institutional investors and the lengthening investment chain causing  bigger distances between assets’ beneficial owners and those involved in executing investment strategies was one of three practical issues raised by the OECD general secretary as a barrier to more investment in long-term investing financing. Speaking at the OECD Project on Institutional Investors and Long-term

2014: the year in words

In 2014 we have delivered to our readers more than 200 in-depth investor profiles, analytical and research-driven stories on the global institutional investment universe.  The most popular investment stories have been about private equity, ESG integration and how to find the ever-elusive alpha. But asset owners have also liked stories on how to improve their

Traditional risk measures flawed

The traditional method of using aggregated monthly data to measure long run risk is flawed and inaccurate, according to important new research by State Street. Co-authors David Turkington, Will Kinlaw and Mark Kritzman have found that there is a huge divergence in risk and return over long periods, which is not visible when using measures

Divestment of fossil fuels inappropriate for Norway’s SWF: expert group

Automatic exclusion of coal or petroleum producers is not an effective way for the Norwegian Sovereign Wealth Fund of addressing climate issues, according the report of the expert group on investments in coal and petroleum to the Norwegian Ministry of Finance. “We believe the use of the Fund as a climate policy instrument beyond what

Previous