Are Investors Becoming More Proactive in Sourcing New Private Equity Opportunities? - October 2013

by Joanna Hammond

  • 07 Oct 2013
  • PE
  • RE
  • INF

Preqin Investor Network now has more than 5,000 subscribers across over 3,000 accredited investing institutions, and investors are increasingly well-informed and hungry for knowledge of the alternative assets industry. In August 2013, Preqin surveyed over 100 institutional investors to establish whether investors have also become more proactive in the way they source new opportunities in private equity, real estate and infrastructure funds.

The most common way that investors find new investment opportunities is by a direct approach from a fundraising manager, with 61% of investors sourcing new funds in this way. In 2012, 72% of investors typically found new funds as a result of an approach from a fund manager, which suggests that institutional investors are becoming more proactive when it comes to fund selection, and not simply waiting for opportunities to come to them. Furthermore, fewer investors see an approach from a placement agent as a key source of new opportunities than in 2012. Thirty-seven per cent of investors considered an approach from a fund manager as a main method to source new funds in 2013, down from 55% in 2012.

Earlier this year, Preqin asked investors if they had a proactive or passive approach to seeking new fund opportunities. Half of investors described themselves as proactive, and are responsible for finding the majority of new opportunities. Nineteen per cent of investors used a mix of both proactive and passive methods, and less than one third (31%) relied on solicitations from fundraising managers or third parties such as consultants for fund recommendations. Over half (51%) of the institutions surveyed have an internal investment team to search for new opportunities, and half of investors surveyed used networking and their existing industry contacts to discover new investment opportunities. This shows that investors are increasingly willing to devote time and resources to finding the best opportunities in the private equity, real estate and infrastructure space.

To find out more about how the investor landscape is changing and the new tools Preqin is offering in this space, please click here to view the full report.

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