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

Innovation to align investors with the social good

The CFA Institute’s president John Rogers, believes there is evidence of innovation in investment products that meet the needs of asset owners in a more sustainable, longer-term way, and points to the work of professors and advisors to the CFA , Andrew Lo of MIT and Robert Shiller of Yale.   One of the main

Adding value through risk allocations

2013 was a great year to add value by using risk to assign asset allocation, according to chief investment officer of Windham Capital, Lucas Turton, whose fund added 300 basis points above benchmark last year by dynamically allocating according to risk.   Windham Capital Management’s style is to focus on measuring and understanding risk to

Alternatives increase as investors manage to outcomes

Investor allocations to alternatives will increase over the next three years as the focus on outcome-oriented investments heightens, according to respondents in the annual conexust1f.flywheelstaging.com /Casey Quirk Global Fiduciary CIO sentiment survey. The second annual survey, which included respondents from 56 asset owners with combined assets of $3 trillion, showed an accelerating trend to moving

Organisational change: asset owners 2.0

A key ingredient for success in any organisation is strong leadership. It is common in the corporate world for the chief executive to change every five to 10 years as the organisation evolves. Are the same principles true for large institutional investors?     Roger Urwin, global head of investment content at Towers Watson, who

The rise of the foreign trustee

Which developed world pension fund will become the first to have a Chinese national sit on its board? The debate on board diversity has focused on gender, race and age, but in future it could extend to having representatives of the countries your fund would most like to invest in. As funds travel along the

Economic growth outlook positive but integrity needs work

The outlook for economic growth this year is markedly positive, compared to last year, but capital market integrity is not improving, according to the opinions of more than 6,000 CFA Institute members. The CFA Institute global markets sentiment survey, measures the views of its members on market integrity and economic issues. This year’s survey, which

Previous