The vast majority, 90%, of global private capital investors were asked for fundraising extensions on their general partners' funds in the past year, according to the results of secondary market manager Coller Capital’s latest survey of limited partners.
What's more, 61% of survey respondents indicated that "to a greater extent" funds they were committed to closed below their fundraising targets.
Coller's survey was taken between Sept. 12 and Oct. 30 by Arbor Square Associates. There were 110 survey respondents.
The survey also found that over the next 12 months, 64% expect to refuse to re-invest with a small number of managers they currently invest with, 19% expect to decline to re-commit with a reasonable number of existing managers and 12% do not expect to decline re-investment.
In the last 12 months, 79% of investors declined to make a commitment to an existing manager’s latest fund. Of those LPs, 42% indicated they declined to re-invest for performance reasons, 29% was due to lack of capital availability, 16% was due to a change in the LP’s strategy, 8% for GP team-related reasons such as team turnover or succession issues and 5% for change in GP strategy.
Most investors expect to earn annual net returns of 11% to 15% across their entire private equity portfolios in the next three to five years. Twenty-six percent expect to earn 16% to 20%, 10% expect 5% to 10% and 3% expect 21% to 25%. None of the survey respondents expect to earn more than 25% annual net returns across their private equity portfolios in the next three to five years.
The majority, 64%, of investors surveyed would like greater transparency on future call and distribution activities, 62% want greater transparency on strategic developments at the firm and 51% would like more details of key transactions.
Meanwhile, 63% of investors said that their GPs’ stated exit timelines are optimistic, with 32% of LPs stating they are realistic and 5%, conservative.
