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Private Equity Institutional Investor Trends for 2014 Survey

Author: Probitas Partners
Date: March 2014

Overview of Survey Findings
The following summarizes the top-line findings from the survey:

  • Steady interest in private equity. The rebound from the Financial Crisis
    continues, and investors are likely to commit slightly more to private equity in 2014 than 2013. Though the appetite for new managers is increasing, a number of investors remain focused on triaging current fund manager relationships as the last group of managers yet to raise since the beginning of the Financial Crisis comes back to market.
  • Continued focus on smaller buyout and growth capital funds. Investors remain focused on smaller- and middle-market buyout and growth capital funds in the United States and Europe to diversify portfolios and commit capital to strategies where managers can prove recurring added value.
  • Many investors have already established core relationships in these sectors,
    so are not looking to add many new ones. Interest in emerging markets is declining. Investors are increasingly concerned with political risk in the emerging markets and are less convinced that the inherent high growth story necessarily leads to strong private equity gains.
  • Credit Vehicles (distinct from mezzanine funds) are rising in interest. Credit-oriented strategies and vehicles have come into fashion, especially senior debt and opportunistic credit strategies in Europe and North America, as difficulties in the debt markets have continued to create opportunities. Energy focused funds remain a significant focus for investors, especially in North America. This is true in no small part due to outperformance the sector has delivered over the past couple of years compared with the broader private equity markets.
  • Large investors increasingly focused on co-investments. Large investors with the team and capital resources necessary to develop co-investment programs are increasingly targeting co-investments in an effort to enhance overall and net returns; the largest investors are pursuing direct investments as well.

Geography: Global

Type of study: Consulting research

Relevant for: LP, GP All, Fund of funds, Associate

Source: Probitas Partners