Slightly more than half of LPs in North America funds feel that their capital is locked into underperforming funds, or Zombie funds, according to the Global Private Equity Barometer, from Coller Capital, as reported by LBOwire.
The survey of 107 global institutional investors revealed that a majority of those surveyed would find “no solution for a majority or even all of the zombie funds”, that is, they won’t be exiting them. The study defines zombie funds as those where GPs have no prospect of carried interest but keep funds going to collect management fees.
Also in the report is the news that fundraising will be challenging for 2012 as 93% of investors polled by Coller Capital expect to reject at least a portion of recommitments during the next 18 months, says LBOWire. Capital lockups might be extended too, as four-fifths of the investors surveyed expected to receive further requests in the next few years to extend the investment periods of private equity funds raised during the boom years of 2005 to 2008.