2009 saw the lowest private equity fundraising total since 2004, evidence of the continuing caution displayed by investors when making new private equity investments. In the wake of this, Preqin undertook a survey of over 100 prominent institutional investors from around the world in order to assess their plans for further private equity investments in the year ahead.
Key findings include:
A considerable 40% of investors did not make a commitment to a private equity fund during 2009.
Investors are gradually returning to the private equity market: though 60% of investors polled made commitments last year, 67% are set to make new commitments during 2010, an 11% increase. Many of these investors will do so at a higher rate.
More investors will have capital available for new private equity commitments as the proportion of investors that are overallocated to private equity has dropped from 21% in December 2008 to 13% in December 2009.
The majority, 51%, of investors are set to commit more capital to funds in 2010 than in 2009.
Two-thirds of survey respondents are considering investing in private equity funds targeting emerging markets, with China being seen as an area of interest by half (51%) of these investors.
Distressed private equity and small to mid-market buyout funds continue to attract a significant degree of investor interest, with 35% and 36% of respondents citing these as areas of the market that present the best current opportunities respectively.
In order to see the full report, please visit the following page: www.preqin.com/lpsurvey
D.C.