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Private Wealth Firms’ Appetite for Private Equity Investment in the Coming Year

by Matthew Rautionmaa

  • 03 Nov 2015
  • PE

Wealth managers and family offices continue to rank among the highest allocators to the private equity asset class. Preqin’s Investor Intelligence online service currently tracks 50 private wealth firms that plan to invest in private equity over the next 12 months. Just over a third (36%) of these are wealth managers and almost two-thirds (64%) are family offices, comprising 18 single- and 14 multi-family offices. Over half of these private wealth firms (58%) are located in North America, while almost a quarter are Europe-based, 6% are China-based and the remaining 12% are located throughout Asia and Central America. This blog will further analyze the breakdown of these private wealth firms through their appetite for private equity funds.

The chart above shows that buyout is the most sought-after private equity strategy for investment within the next 12 months, with 42% of private wealth firms looking to increase their portfolio exposure in this space. Venture capital funds are the second most targeted private equity strategy; almost a quarter (24%) of wealth managers and family offices plan to commit capital to venture capital funds in the coming year. Eighteen percent of private wealth firms are looking to invest in both distressed private equity and growth funds over the next 12 months.

A third of private wealth firms are targeting North America-based investments, making it the most attractive destination for upcoming private equity investments. This is unsurprising, as the majority of these firms are based in North America, with domestic investments presenting fewer hurdles than those abroad. Europe is the second most sought-after region for private equity investments, with one-fifth of firms looking to allocate funds to the continent. Eighteen percent of private wealth firms will target funds across the globe, while 15% will specifically target Asia-Pacific investments.

Shanghai-based wealth manager Noah Wealth Management recently informed Preqin that it intends to make new commitments to private equity funds over the next 12 months. The wealth manager will target small to mid cap buyout, growth, venture capital and distressed debt vehicles. The firm will target North America and Asia-Pacific-based funds and seeks exposure to the cleantech and healthcare industries.

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