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North America-Based Private Equity Fund of Funds Managers Making New Investments - November 2012

by Francesca Braganza

  • 29 Nov 2013
  • PE

Preqin’s Investor Intelligence online service currently tracks 85 private equity fund of funds managers headquartered in North America that are planning to make new investments over the coming 12 months. These investors have an aggregate $413bn in private equity assets under management, with $377bn currently invested in the asset class. Over the next 12 months, they expect to invest an aggregate $6bn in private equity opportunities on a global scale and across a range of fund types.

Geographically, 81% of these private equity fund of funds managers plan to target opportunities within North America over the course of the coming year. Forty-five percent include European opportunities in their geographic focus, and almost two-fifths (39%) seek exposure to Asia through their private equity investments. Emerging markets (29%) and rest of world regions (22%) are also geographies these firms look to invest in, and 20% are currently considering global opportunities.

With regard to fund types, the majority of North America-based private equity fund of funds managers planning new commitments over the coming 12 months expect to target venture capital (73%) and buyout vehicles (71%). Growth funds are also a common choice for these investors, with 58% planning to invest in this fund type in the coming year. Data for other underlying fund types these LPs are hoping to invest in indicate a favouring of strategies linked to distressed private equity, with 34% expressing a preference for distressed debt, 20% for special situation and 15% for turnaround vehicles.

Seventy-six percent of these private equity fund of funds managers would consider investing in a first-time fund, with an additional 17% stating that they would do so if the fund was managed by a spin-off team, and an overwhelming majority of 91% would consider investing in a fund before it had held a first interim close.

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