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Preferred Private Equity Strategies of US-Based Wealth Managers – December 2014

by Pierre Papet

  • 09 Dec 2014
  • PE

Preqin currently tracks 196 US-based wealth managers with exposure to the private equity asset class. With regards to the breakdown of strategies, venture capital remains the most utilized strategy (76%) by US-based wealth managers. As mentioned in the Preqin Special Report: Venture Capital, the strategy represents a significant proportion of the global private equity universe, both in terms of its longevity and scale. Consequently, US-based wealth managers appear to have a keen interest in the strategy. With the potential to capitalize on the emergence of promising start-up businesses, early stage strategies are utilized by an average of 38% of US-based wealth managers. 

While venture capital returns have surpassed those of all other strategies over a one-year horizon, its performance drops significantly over longer timeframes. Buyout funds are among the top performing private equity strategies and, are currently being utilized by 54% of US-based wealth managers with exposure to private equity.

Although The Q3 2014 Preqin Quarterly Update: Private Equity report shows that over 300 LPs appear to be actively looking to purchase fund interests on the secondary market, US-based wealth managers seem to view the strategy somewhat negatively, with only 9% of US-based firms utilizing secondary funds when investing in private equity.

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