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Private Equity Investor Fund Searches & Mandates – January 2016

by Sam Kivell

  • 01 Feb 2016
  • PE
  • VC

With 94 out of 100 institutional investors interviewed in Preqin’s most recent private equity survey stating that their portfolios had met or exceeded expectations, it is clear that investor appetite remains strong for the asset class. Preqin’s Fund Searches and Mandates module on Investor Intelligence reveals that at the start of 2016, 38% of private equity investors that plan to be active in the next 12 months are looking to add three to five funds to their portfolios, while 29% intend to add six to 10 funds and 8% of active investors are seeking more than 10 funds.

The majority of investors that are looking to invest in private equity funds in 2016 are targeting the established markets of North America (56%) and Europe (54%).  Despite recent economic troubles in China, Asia-Pacific-focused private equity funds are also sought by investors, with nearly a third of active investors looking to invest in funds focused on the region. Thirteen percent of investors are seeking funds that invest in regions outside North America, Europe and Asia-Pacific.

Buyout funds are the most favoured fund type among investors, with 69% of fund searches targeting these vehicles. Forty-five percent of active investors will target venture capital funds, with improved returns for these funds likely driving investor appetite. Growth and distressed private equity funds are also targeted by relatively high proportions of investors, included in 37% and 26% of fund searches respectively.

With distributions flowing back to LPs quicker than capital is being called by GPs, it is unsurprising that LPs are encouraged by the performance of the asset class and continue to seek additional opportunities in the year ahead.

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