Hamilton Lane, the fund advisory, says in a recent research note that while the outlook is positive for exits, investment activity is not generating as much optimism. Only 10% of PE’s top tier investors believe deals undertaken in the next year will generate above average returns, and 43% actually believe they will be below average. More than half of the GPs surveyed said North America is the market with the most improved risk/reward trade off over the next 12 months.
Europe was the next most-cited region, followed at a great distance by Asia and Africa. A slight majority (51%) said they were making fewer investments these days than 3 years ago. Despite the current environment, Hamilton Lane does not recommend to LPs that they jump in and out of the private equity market. It is a tactic that rarely works, it said, better to make strategic allocation bets with top performers.