Institutional Private Equity Investors in the Information Technology Sector: An Overview

by Olivia Perry

  • 02 Nov 2015
  • PE

The global information technology (IT) sector, an aggregation of industries ranging from gaming and hardware to nanotechnology and IT security, continues to be an attractive sector for private equity investment – one with potential for growth and innovative new opportunities.

According to Preqin’s Investor Intelligence database, there are currently 2,702 global investors that have invested in or will consider targeting the IT sector, with aggregate assets under management (AUM) of approximately $77tn. The majority of these LPs are based in North America and Europe. North America-based investors account for 51% of IT investors, whereas Europe-based LPs make up a further 27%. The Asia-Pacific region represents a significant 17% of LPs investing within the sector, with Japan and Greater China accounting for over 50% of these Asia-Pacific-based investors.

Private sector pension funds, foundations and public pension funds constitute the largest groups of global institutional investors that have previously invested in, or currently show an interest in, the IT sector as shown in the above chart. Fund of funds managers follow closely, accounting for 9% of these LPs.

Preqin data illustrates that the majority of these investors seek investment opportunities in North America (69%) and Europe (64%); this is unsurprising given that the majority of IT investors are North America- and Europe-based LPs. However, a large percentage of investors (56%) also seek exposure to Asia. This is potentially a reflection of the budding technology industry in Asia, which is looking to take advantage of a growing and wealthy middle class.

The global IT sector will continue to be an attractive industry for investment opportunities as it is a mainstay of advancement and development that affects many aspects of our lives. According to Preqin’s Funds in Market online service, LPs currently have the opportunity to commit to 714 raising vehicles with at least a partial focus on the IT sector, targeting $192bn.

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