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Private equity remains popular

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According to research by Preqin, a further 64 per cent of investors have not changed their opinion on private equity as a result of the financial climate, while 14 per cent find it less attractive.

More than three-quarters of a sample of 300 investors plan to make new fund commitments over the next year, while 92 per cent expect to maintain or increase allocations over the longer term. Only eight per cent plan to decrease their exposure to the asset class over the next three to five years.

Private equity is seen by many as more attractive as public markets remain volatile. A number of investors have identified opportunities in times of financial turmoil while others intend to look to emerging markets for new investments.

“The global financial crisis undoubtedly prompted many LPs to re-evaluate their private equity strategies. Many have become more cautious and selective when choosing fund managers to invest with. However, despite recent volatility in the wider financial markets, investors generally remain positive about the private equity asset class, and many believe that there are good investment opportunities ahead,” comments Emma Dineen, manager of private equity investor data at Preqin.

“While investor appetite is there, the crowded fundraising market means that investors are well positioned to be selective about the funds they choose to commit to, so the challenge remains for fund managers to market their funds in the best possible way and to ensure that they target the right investors if they are to enjoy success in this competitive market,” concludes Dineen. 

Read more from our sister title Real Deals.

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