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Private Equity

Private equity investors giving more to managers, but concerned over weak players in the market

Forty percent of investors indicated that they plan to increase the number of private equity managers on their rosters, while 21% expect to reduce their number over the next three years, according to Coller Capital's semiannual survey of private equity investors.

Some 50% of investors plan to increase the average size of their private equity commitment to managers, compared to 9% of investors that plan to reduce the size of their commitments over the next three years.

At the same time, 89% of limited partners indicated that the increase in overall investor commitments to private equity is resulting in too many weak general partners receiving commitments. Eleven percent of survey respondents indicated they did not think too many weak managers are being funded.

Survey respondents also said the U.K. is the least attractive buyout market in Europe, with 44% of respondents indicating that it is becoming less attractive, compared to 13% indicating the U.K. is becoming more attractive. The most attractive buyout market in Europe is France, with 43% stating the country is becoming more attractive and 5% indicating that France is becoming less attractive.

Meanwhile, 68% of investors based in the Asia-Pacific region, 60% of European investors and 54% of North American limited partners think Europe will be attractive for venture capital investments over the next five years.

Seventy-two percent of investors expect the proportion of women working at private equity money managers will increase in the next three years, while 55% expect the number of women employed by limited partners will increase in the next three years.

The most popular reason — chosen by 53% of survey respondents — for why there are more women working for investors than general partners is the work-life balance at limited partners. Forty-six percent indicated that the reason for the difference is that general partners and limited partners have different recruitment and promotion practices, while 25% indicated the reason is that there is a generally more aggressive culture at general partners. Twenty-two percent stated that there are too few role models at money managers.

However, an overwhelming majority (73%) of investors favor aspirational targets to boost the number of women on investment committees at private equity managers, compared to 11% that favored mandatory quotas.