Which Limited Partners Really Matter in PE?


September 12, 2013

This week Private Equity International launched a new ranking to identify which LPs are the most active backers of PE funds. PEI says its research answers the question, which LPs from the multitudes of institutional investors really matter?


The ranking provides the answer. It is based on the amount of money LPs committed to private equity funds in the year to March. It does not include capital allocated to direct investing, separate accounts, secondaries and co-investments. It is traditional fund investment.


Leading the ranking is Canada Pension Plan Investment Board, which dispels the notion that Canadian pension plans are no longer interested in traditional fund structures, says PEI. CPPIB made number of large commitments to the tune of USD 4 billion – during the 12-month period.


Six US pension plans, including well know LPs, like CalPERS and Washington State, also made the top ten, as did fund of funds manager Hamilton Lane, European group APG and China’s SAFE. In total, the LP50 committed more than USD 75 billion to private equity funds during the period – with the top 10 responsible for about a third of that.


Getting any of these big LPs on board, especially if other investors know they’ve taken a stake means that the fundraising will go rather quickly.


Overall, the research conveys good news for private equity, says PEI, because the research show that capital is out there, in abundance. And it’s still being actively committed to private equity funds. “Despite the heightened LP interest in novel funding structures and direct investing, there are still big institutions out there willing to write sizeable cheques to get into traditional private equity funds.”


However, there is a real division between the funds able to attract the large LPs and funds that do not. Some GPs are hitting their fundraising targets in a matter of weeks while others limp on for months, even years, says PEI.

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