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LP Trends in PE 2012: Global Private Equity Barometer

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July 2, 2012

The latest Coller Capital Global Private Equity Barometer and survey is summarized with the key findings below.

  • Almost half of LPs think private equity is seen by those outside the industry as a ‘bad thing’.
  • About two thirds of investors think the industry’s reputation is worse than it deserves.
  • About 60% of LPs believe that further improvements in terms of transparency and risk management are needed across the industry (though only about 10% of investors think that most GPs are deficient in this area).
  • Three quarters of LPs surveyed opined that venture capital in Europe will not reverse its decline without significant government support and an improved regulatory and tax environment,
  • The Barometer shows that typical investment (median) in European venture funds has made an overall return of  0 to 5% from European VC – over a third of European venture’s LP backers have lost money overall.
  • a majority (59%) of European LPs think more government support would make a crucial difference.
  • Three fifths of investors expect distressed debt to deliver annual net returns of 11 to 15% over the next five years. Almost all LPs (89%) expect returns of greater than 11% from distressed debt.
  • Direct investing and co-investing is increasing. In the Summer 2006 Barometer only about one third of fund investors also invested directly. This proportion has now grown to two thirds. The trend shows no sign of slowing as 42% of LPs say they will increase direct investing over the next three years.
  • A large majority of investors expect economic recovery in North America in the next 12 to 18 months. Only one-quarter of LPs expect the same for Europe.
  • 39% of European and North American LPs expect to have more than a tenth of their private equity commitments focused on the Asia-Pacific region within three years (compared with just 15% and 21% of investors in those two regions today).
  •  In terms of individual countries within the region, Australia is the most attractive destination for buyout investments, while LPs think China, India and Indonesia are currently the hottest markets for venture capital/growth investments. (Image Source: Coller Capital Global Private Equity Barometer Summer 2012)
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