Blog

Fund of funds managers are looking to small and mid-market opportunities

by Joe Childs

  • 06 Jan 2011
  • PE

A recent survey shows that private equity fund of funds managers overwhelmingly believe that small to mid-market buyout funds are presenting the most attractive opportunities at present. The results of the poll of 76 fund of funds managers appear in the 2011 Preqin Private Equity Fund of Funds Review and indicate that 86% of respondents find the small and mid-market space appealing in the current market. 56% of survey participants named distressed private equity (including special situations, distressed debt and turnaround strategies) as an area of interest at present.

Launched last month, the 2010 Preqin Private Equity Fund of Funds Review presents evidence that the overall focus on buyout and venture capital funds has decreased over the past couple of years, with other private equity strategies attracting greater interest than in the past. The proportion of capital allocated to other fund types, including distressed private equity, natural resources and mezzanine funds, rose from 16% of aggregate capital raised by funds of funds closed in 2007-8 to 25% of capital raised by funds of funds closed in 2009-10. Changes in the market following the financial crisis have also seen private equity fund of funds managers increase the proportion of capital allocated to secondary opportunities and direct co-investments.

Further analysis of the private equity fund of funds market and in-depth profiles of private equity fund of funds managers and institutional investors are available in the 2011 Preqin Private Equity Fund of Funds Review.

Continue browsing industry reports, publications, conferences, blogs and more on Preqin Insights