Survey reveals that more than three quarters of investors believe PE will perform well in the next 12 months
Satisfaction in private equity is high among institutional investors with 93% telling a new survey that their allocations to the asset class has performed well in the past year; that’s the highest share for any asset class.
The poll by Preqin shows that 78% of respondents expect performance to be at least as good in the coming 12 months and – despite 4 in 5 expressing concern about valuations – 40% are planning to commit more capital to PE in the coming year.
“Private equity tops the table for investor satisfaction across alternative assets. Investors feel that private equity has performed well, and we can see that from the high distributions of recent years – private equity funds have consistently produced good returns across all timeframes,” said Christopher Beales, Private Equity Analyst. “With fears of a market downturn, investors are planning to commit more capital in the year ahead to help offer good returns in difficult times, so we can expect to see capital keep flowing in over the next year. But with the rise of interest in growth and secondaries funds, that capital may go to a more diverse range of opportunities than ever before.”
Where the investment will go
The largest proportion (68%) of private equity investors will target small to mid-market buyout funds. Growth and secondaries funds are also being targeted by 47% and 34% investors respectively, up from 21% and 14% at the start of H2 2018.
Regionally, the US is being targeted by 88% of investors and China would be the preferred region among emerging markets for 48% of investors.
Thirty-five percent of private equity investors have an ESG program already in place for their investments.
