POWERED BY MOMENTUM MEDIA
Private equity LPs confident of securing returns despite skills gap
The majority of limited partners (LPs) claim they can earn net annual returns of more than 11 per cent from their private equity investments, despite having concerns about their skills and experiences.
Data from the Coller Capital Global Private Equity Barometer winter 2015/16 survey, 86 per cent were optimistic they would deliver net annual returns of more than 11 per cent over the medium-term.
Despite the optimism surrounding their forecast returns, the report found just 16 per cent of co-investing LPs believed they had the necessary skills and experience to make successful investments.
When it came to the challenges facing LPs, 71 per cent cited the time constraints as a barrier to successful co-investing, while 55 per cent said, "having a limited understanding of co-investment performance drivers", hindered the success of investments.
Fifty per cent said "the inability to recruit staff with the requisite skills," was preventing them from making successful co-investments.
The survey also found that LPs believed that size matters when it comes to their ability to successfully co-invest, with 71 per cent of reporting that small investors are disadvantaged by the volume of money being committed by larger investors.
Almost three-quarters of Asia-Pacific and North American respondents reported that the degree of freedom an LP has makes a material difference to its private equity returns.
AUTHOR
Nicholas O'Donoghue
Nicholas is a journalist for Money Management and Super Review. Nicholas has several years experience as a journalist, reporting and managing websites for various news publications covering the medical and pharmaceuticals sector.
Recommended for you
In this latest edition, Anna Shelley, CIO at AMP, shares the fund’s approach to current market conditions and where it continues to uncover key opportunities.
The mega fund has announced a $2.2 billion investment in a leading data centre platform, bringing its global real assets portfolio to nearly $60 billion.
In this latest edition, Australian Retirement Trust’s head of global real assets Michael Weaver explains the fund’s approach to finding new opportunities as it surpasses $300 billion in funds under management.
Fund managers remain hopeful for a Chinese revival story despite the “disappointing” stimulus package announced this week.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
32.57 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
32.09 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
27.42 3 y p.a(%)
