While the majority of investors do not have plans to change their alternative investment allocations over the next 12 months, 31% indicated they intend to increase their allocations and 9% expect to cut their allocations, according to Coller Capital's latest global private equity twice-yearly investor survey released Monday.
Among the various alternative investment asset classes, 44% of investors plan to increase their allocations to private debt/private credit over the next 12 months, the most of any sector. This is up from 37% in the prior survey.
Eleven percent of investors plan to decrease their private debt/credit allocations with the remainder sticking to their current allocations over the next 12 months. Forty-two percent of investors plan to increase their infrastructure allocations, up from 33% in the prior survey, with 5% expecting to cut their allocations and the remainder staying pat over the next 12 months. Twenty-seven percent of private equity investors plan to increase their allocations, the same percentage as the prior survey, with 13% expected to decrease their allocations, down 1 percentage point from the previous survey results.
The majority of investors stated that the level of debt in buyout deals is too high, with 4% stating that the level is debt is too low.
Indeed, 26% of private equity investors expect to increase their average commitment size to individual private equity managers in the next three years, falling from 50% of investors that planned to do so when asked the same question five years ago. At the same time, 25% plan to decrease their average private equity commitment size over the next three years, an increase from 9% that expected to do so in the survey five years ago.
Sixty-two percent indicated that negotiating terms when investing in a fund is challenging. Only 19% stated that fund access is a challenge.
There were 110 respondents to the survey that was conducted for secondary market private markets manager Coller Capital by Arbor Square Associates from Feb. 13 to March 31.