Two-thirds (66%) of global institutional investors make direct private equity investments in companies, up from 35% six years earlier, the first time the question was asked, according to Coller Capital's just released Summer 2012 Global Private Equity Barometer.
This is also an increase from the Summer 2010 Barometer when close to 50% of respondents made direct private equity investments.
Some 42% of survey limited partner respondents plan to increase their level of direct investment over the next three years, while 52% plan to keep the level of direct investments the same. Six percent of limited partners plan to decrease their direct investments.
Forty-two percent of investors expect private equity's share of a balanced portfolio to increase over the next three to five years and 19% expect private equity to decrease during the same time period.
Sixty-two percent of respondents co-invest alongside private equity managers. Of those investors that co-invest, 30% actively seek co-investments and 18% co-invest on an opportunistic basis.
Slightly more than 60% of investors plan to access the private equity secondary market as either buyers or sellers in the next two to three years. By comparison, 60% indicated that they have ever either bought or sold assets on the private equity secondary market.
Use of the private equities secondary market is gaining momentum, said Mike Alfano, principal, in Coller Capital's New York office.
“Investors are using the secondary market as a tool to rebalance portfolios,” Mr. Alfano said.
He attributed the trend to increased awareness. “I think it's something more and more investors realize is a tool available to them,” he said.
Some 101 private equity investors responded to the survey, which was conducted in March and April by IE Consulting, a division of Initiative Europe.
Coller Capital is a London-based private equity firm that invests on the secondary market.