INSTITUTIONAL INVESTOR SENTIMENT SURVEy - PEI Media

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If you have worked with a placement agent in any of the private equity funds in which you have invested over the last two years, how would you rate the experience in terms of service quality and the agent’s ability to aid the fundraising process to completion? % 80 70 60 50 40 30 20 10 institutional investor sentiment survey foreword executive summary allocation fees • lp – gp relationship future investments and concerns 0 Very satisfied Generally satisfied Sometimes unsatisfied Generally unsatisfied appendix: global fundraising Source: Private Equity International When asked about their experience with placement agents over the last two years, the majority of investors were somewhat satisfied with the quality of service they provided in helping the fundraising process. 61 percent of investors were generally satisfied, whilst a meagre four percent were very satisfied. 22 percent of investors were sometimes unsatisfied with the service of placement agents and 13 percent were generally unsatisfied. Although the majority of investors were positive on the quality of their placement agents, there is still a significant amount that is not satisfied with the service provided. Recently, the integrity of placement agents has been called into question. In April 2012, a former board member of the CalPERS pension fund that later went on to become a placement agent, coerced Apollo Global Management into paying him fees for fundraising work he claimed had been approved by CalPERS. Apollo requires this approval by rule and CalPERS did not approve the fundraising. Perhaps more severe, one Asian fund manager referred to placement agents as ‘leeches’ and that LPs generally would rather deal with GPs directly. page 27 www.privateequityconnect.com
Focus on… Endowments Distribution of Endowments by Region 600 500 institutional investor sentiment survey No. per region 400 300 200 100 0 Asia- Pacific CEE Latin America MEA North America Western Europe Source: Private Equity International foreword executive summary allocation fees lp – gp relationship future investments and concerns appendix: global fundraising page 28 Endowments can be non-profit organisations or institutions such as universities. Larger university endowments in the US invest a greater proportion of their portfolio into alternative assets including private equity. Within the past two decades, Harvard and Yale University has been leaders in multi-asset class diversified investing. However they both witnessed a decline in their assets since the financial crisis of 2008 As of February 2012, the fastest growing US university endowment was the University of Virginia with a 28 percent increase in its endowment over the past fiscal year. University of Pittsburgh ranks second at 24 percent, followed by Purdue University. Both the University of Virginia and University of Pittsburgh invest a fifth of their portfolio into private equity globally and across diversified fund types. The Purdue University endowment is a similar size to the University of Pittsburgh however it allocates only 10 percent of its assets in private equity. Investments are focused on buyout and venture capital funds in the United States, not made regularly and are targeted with fund managers with a proven track record. University endowments in Canada invest between five and 13 percent of their assets in private equity. The University of British Columbia Endowment allocates the most money in the asset class at CAD120.45 million (13 percent of total assets), however, the endowment reduces risk by not fully investing in emerging markets, choosing to focus on North America, Europe and Asia instead. UK university endowments invest a distribution of between three and eight percent into private equity. The Oxford University Endowment Management invests eight percent into the asset class with a value of over £66 million. Although the Oxford University endowment invests globally, university endowments in the UK are more likely to invest in specific funds within the regions of North America, Europe and Asia. It is clear that the United States is leading the way with multi-asset class investing in their university endowments. Canadian universities endowments are accelerating the amount but not frequency of their private equity; however, UK university endowments remain cautious of their levels of private equity investment. www.privateequityconnect.com
Page 1 and 2: Institutional Investor Sentiment Su
Page 3 and 4: institutional investor sentiment su
Page 5 and 6: LP Respondents Breakdown Where is y
Page 7 and 8: Allocation institutional investor s
Page 9 and 10: Over the long-term, private equity
Page 11 and 12: Co-investments provide LPs with gre
Page 13 and 14: Fee breaks should be negotiated dep
Page 15 and 16: Fees should be calculated in connec
Page 17 and 18: LPs are requesting a “Europeansty
Page 19 and 20: GP fund commitments should be a mea
Page 21 and 22: SWFs prefer to target sectors which
Page 25 and 26: A vast majority of LPs conduct due
Page 27: There is room for improvement with
Page 31 and 32: Strategy Appetite institutional inv
Page 35 and 36: The prevalence of zombie funds has
Page 37 and 38: Private equity is coming under incr
Page 39 and 40: Fundraising by Strategy 150 institu
Page 41: Published in July 2012 by PEI Secon

INSTITUTIONAL INVESTOR SENTIMENT SURVEy - PEI Media

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