London \u2014 The majo\u00adrity of insti\u00adtu\u00adtio\u00adnal inves\u00adtors (limi\u00adted part\u00adners, LPs) are posi\u00adtive about the pros\u00adpects for private equity in North America and Europe in 2023 and 2024 and expect them to be strong vinta\u00adges, accor\u00adding to Coller Capi\u00adtal\u2019s latest Global Private Equity Baro\u00adme\u00adter. When it comes to the outlook for private equity in the Asia-Paci\u00adfic region, inves\u00adtors\u2019 opini\u00adons tend to be balanced.<\/p>\n
For private equity, most inves\u00adtors believe that the health\u00adcare and phar\u00admaceu\u00adti\u00adcal sectors<\/strong> will offer attrac\u00adtive invest\u00adment oppor\u00adtu\u00adni\u00adties over the next two years. Three-quar\u00adters say the same about IT and busi\u00adness services<\/strong>. There are clear diffe\u00adren\u00adces on energy<\/strong>, where more LPs favor rene\u00adwa\u00adble energy than fossil hydrocarbons.<\/p>\n In terms of invest\u00adment stra\u00adte\u00adgies, the majo\u00adrity of inves\u00adtors see good oppor\u00adtu\u00adni\u00adties in the next two years for mid-market and special situa\u00adtions funds. Three-quar\u00adters of LPs also expect good oppor\u00adtu\u00adni\u00adties in secon\u00addary market invest\u00adments, seeing an incre\u00adasing number of insti\u00adtu\u00adtio\u00adnal inves\u00adtors using this market to reba\u00adlance their port\u00adfo\u00adlios. Fewer LPs see oppor\u00adtu\u00adni\u00adties with fund mana\u00adgers (gene\u00adral part\u00adners, GPs) for large and mega buyouts \u2014 a signi\u00adfi\u00adcant change from their opinion five years ago. Inves\u00adtors are also concer\u00adned about the amount of debt invol\u00adved in buyout deals. Half think the current percen\u00adtage is too high.<\/p>\n \u201cInves\u00adtor appe\u00adtite for private credit funds shows no signs of abating,\u201d said Michael Schad, part\u00adner and head of Coller Credit Secon\u00adda\u00adries. \u201cIn that regard, it\u2019s inte\u00adres\u00adt\u00ading to see that they expect to see a grea\u00adter concen\u00adtra\u00adtion of capi\u00adtal on larger fund mana\u00adgers in private debt over the next few years.\u201d<\/p>\n Inves\u00adtor beha\u00advior during due dili\u00adgence and travel<\/strong><\/p>\n Over the past two years, inves\u00adtors have increased their audit effort, with this apply\u00ading to a higher propor\u00adtion among Euro\u00adpean LPs than among those from North America and Asia Paci\u00adfic. Due dili\u00adgence for fund expo\u00adsures is a major reason why LP travel has retur\u00adned to levels not seen since the begin\u00adning of the pande\u00admic. Inves\u00adtors are also likely to return to trave\u00adling to confe\u00adren\u00adces and annual gene\u00adral meetings, although a rather small number of them plan to return to their previous busi\u00adness travel patterns. In the invest\u00adment process itself, three-fifths of inves\u00adtors see nego\u00adtia\u00adting terms as a chall\u00adenge, but fewer see evalua\u00adting mana\u00adgers or acces\u00adsing funds as a chall\u00adenge. They differ in their assess\u00adment of the importance of incen\u00adti\u00adves for a first degree.<\/p>\n Importance of Arti\u00adfi\u00adcial Intel\u00adli\u00adgence for Private Equity<\/strong><\/p>\n Inves\u00adtors are open to the bene\u00adfits of arti\u00adfi\u00adcial intel\u00adli\u00adgence (AI) for the private equity tran\u00adsac\u00adtion process. Three-quar\u00adters of LPs believe it could be a useful tool for initia\u00adting tran\u00adsac\u00adtions. Three-fifths of LPs believe it could be useful for deal evalua\u00adtion or post-tran\u00adsac\u00adtion enga\u00adge\u00adment with port\u00adfo\u00adlio companies.<\/p>\n Anti-ESG move\u00adment in the USA<\/strong><\/p>\n The importance of envi\u00adron\u00admen\u00adtal, social and gover\u00adnance (ESG) stan\u00addards in private equity conti\u00adnues to be taken seriously by insti\u00adtu\u00adtio\u00adnal inves\u00adtors, despite the \u201canti-ESG move\u00adment\u201d emana\u00adting from Repu\u00adbli\u00adcan gover\u00adnors in the US. Three-quar\u00adters of LPs do not expect this to impact the importance that fund mana\u00adgers place on ESG. Euro\u00adpean LPs are ahead of their global peers when it comes to estab\u00adli\u00adshing ESG teams in their compa\u00adnies: three-quar\u00adters of Euro\u00adpean LPs have alre\u00adady hired their own ESG staff. The reverse is true for North Ameri\u00adcan LPs, with the same percen\u00adtage indi\u00adca\u00adting they have no plans to hire specia\u00adli\u00adzed ESG staff.<\/p>\n Perfor\u00admance of buy-and-build portfolios<\/strong><\/p>\n Across all private equity port\u00adfo\u00adlios, LPs are posting record returns, with two-fifths gene\u00adra\u00adting annual net returns of 16 percent or more over the life of the port\u00adfo\u00adlios. Perfor\u00admance differs by stra\u00adtegy, parti\u00adcu\u00adlarly between buy-and-build invest\u00adments and those more focu\u00adsed on orga\u00adnic growth. Two-thirds of LPs repor\u00adted that their buy-and-build port\u00adfo\u00adlios outper\u00adfor\u00admed. Inves\u00adtors also provi\u00added infor\u00adma\u00adtion on where they think the best invest\u00adment oppor\u00adtu\u00adni\u00adties for private equity will come from: About three-fifths of LPs said that invest\u00adments in family and start-up busi\u00adnesses, as well as company sales and spin-offs, will provide the best oppor\u00adtu\u00adni\u00adties over the next two years.<\/p>\n Chan\u00adges in the private markets<\/strong><\/p>\n Two-fifths of inves\u00adtors plan to increase their target allo\u00adca\u00adtion to private credit and infra\u00adstruc\u00adture in the next year. In the private debt markets, two-thirds of LPs expect grea\u00adter concen\u00adtra\u00adtion of capi\u00adtal among larger GPs over the next three to five years. For private equity, fewer LPs expect to increase their average expo\u00adsure to indi\u00advi\u00addual GPs than when we surveyed them five years ago. Howe\u00adver, LPs are making room for new mana\u00adgers in their port\u00adfo\u00adlios, with the majo\u00adrity making a commit\u00adment to a new private equity mana\u00adger and more than half adding new private credit and venture capi\u00adtal managers.<\/p>\n Capi\u00adtal calls and venture capi\u00adtal down rounds<\/strong><\/p>\n Some LPs are cautious about the expec\u00adted level of funds drawn down by their GPs over the next two years compared to the last two years, with two-fifths of them expec\u00adting less capi\u00adtal to be drawn down. Caution also prevails with regard to their venture capi\u00adtal port\u00adfo\u00adlios: Three quar\u00adters expect more down rounds in their port\u00adfo\u00adlios here due to falling valuations.<\/p>\n <\/p>\n Coller Capi\u00adtal\u2019s Global Private Equity Baro\u00adme\u00adter is a unique snapshot of global private equity trends. Twice a year, it provi\u00addes an over\u00adview of the plans and opini\u00adons of insti\u00adtu\u00adtio\u00adnal inves\u00adtors in this asset class in North America, Europe and the Asia-Paci\u00adfic region (inclu\u00adding the Middle East). It has been published semi-annu\u00adally in summer and winter since 2004.<\/p>\n The latest baro\u00adme\u00adter reflects the views of 110 insti\u00adtu\u00adtio\u00adnal private equity inves\u00adtors world\u00adwide, surveyed from Febru\u00adary 13 to March 31, 2023. The results are globally repre\u00adsen\u00adta\u00adtive of all LPs in terms of inves\u00adtor loca\u00adtion, type of inves\u00adt\u00ading orga\u00adniza\u00adtion, total assets under manage\u00adment and length of expe\u00adri\u00adence with private equity investments.<\/p>\n About Coller Capital<\/strong><\/p>\n Coller Capi\u00adtal, foun\u00added in 1990, is one of the worl\u00add\u2019s leading inves\u00adtors in the secon\u00addary market for private asset clas\u00adses and is conside\u00adred an inno\u00adva\u00adtor in complex secon\u00addary market transactions.<\/p>\n The company provi\u00addes liqui\u00addity solu\u00adti\u00adons to private market inves\u00adtors world\u00adwide, acqui\u00adring invest\u00adments in private equity, private credit and other private market assets. Head\u00adquar\u00adte\u00adred in London with offices in New York, Hong Kong, Beijing and Seoul, Coller\u2019s multi\u00adna\u00adtio\u00adnal invest\u00adment team has a global reach.<\/p>\n In Janu\u00adary 2021, the company placed the \u201cColler Inter\u00adna\u00adtio\u00adnal Part\u00adners VIII\u201d fund with capi\u00adtal commit\u00adments (inclu\u00adding co-invest\u00adments) of just over $9 billion from more than 200 of the worl\u00add\u2019s leading insti\u00adtu\u00adtio\u00adnal inves\u00adtors. \u2014 In Febru\u00adary 2022, the firm placed the Coller Credit Oppor\u00adtu\u00adni\u00adties I fund with $1.45 billion in capi\u00adtal commit\u00adments (inclu\u00adding co-invest\u00adments) from more than 40 insti\u00adtu\u00adtio\u00adnal investors.<\/p>\n In March 2023, Coller Capi\u00adtal announ\u00adced the crea\u00adtion of a global Private Wealth Secon\u00adda\u00adries Solu\u00adti\u00adons (PWSS) busi\u00adness to provide high net worth indi\u00advi\u00addu\u00adals with expan\u00added access to private capi\u00adtal markets.<\/p>\n","protected":false},"excerpt":{"rendered":" London \u2014 The majo\u00adrity of insti\u00adtu\u00adtio\u00adnal inves\u00adtors (limi\u00adted part\u00adners, LPs) are posi\u00adtive about the pros\u00adpects for private equity in North America and Europe in 2023 and 2024 and expect them to be strong vinta\u00adges, accor\u00adding to Coller Capi\u00adtal\u2019s latest Global Private Equity Baro\u00adme\u00adter. When it comes to the outlook for private equity in the Asia-Pacific [\u2026]<\/p>\n","protected":false},"author":2,"featured_media":49052,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"wp_typography_post_enhancements_disabled":false,"footnotes":""},"categories":[886,1364,1366,1369],"tags":[],"class_list":["post-49054","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-en","category-featured-en","category-news-en","category-investors"],"yoast_head":"\n