Hint: it’s not Family Offices. Preqin’s latest research reveals that government agencies are seeking to allocate some 45.6% of longer term capital to the private equity asset class. Second in the ranking are investment companies (30.7%) and third is family offices (27.2%).
Despite their relatively high target for the year, government agencies actually reduced target allocations to PE from 53.7% at the end of 2013. Wealth managers also decreased their target from 27.5% in 2013 to 21.4% in 2014. It appears that LPs are careful about investing as the number of investors that are “currently operating below” their target allocation appears to be increasing, according to Preqin.
Analysts did not predict whether or not LPs would be likely to close the gap between their current and target allocations in 2015.