INSTITUTIONAL INVESTOR SENTIMENT SURVEy - PEI Media

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foreword Understanding how institutional investors operate and think is crucial for fund managers to thrive in this harsh fundraising environment. GPs must realise that their relationships with LPs should go far beyond just a traditional alignment of interests. Today’s LP-GP relationship has become a more equitable partnership where GPs increasingly accommodate LPs’ concerns and demands in their fund structures. It is no longer enough for a GP to promise high returns to investors. Issues such as management fees, carried interest, “zombie funds” and communication are now standard talking points for LPs during the negotiation process. While some strides to clarify LP terms have been made by organisations such as the Institutional Limited Partners Association, many GPs continue to mistake the needs of LPs as one-off requests rather than a fundamental shift in the LP-GP relationship. The need to understand LPs and react to their requirements has never been more important. Therefore, the Research Unit at Private Equity International has undertaken an Institutional Investor Sentiment Survey in order to gauge the opinions of prominent players in private equity markets. With topics ranging from fees to the LP-GP relationship, current allocations to future appetite, the survey aims to present a concise and detailed analysis of today’s global LP. This report is an essential reading for fund managers – whether they are launching their first fund or are seasoned professionals – advisory firms and the institutional investors themselves. Our extensive survey not only sheds light on how LPs believe the alternative asset class is evolving but also places the findings in the context of today’s private equity markets. I hope you find our Institutional Investor Sentiment Survey both an informative and interesting read. Larry Oberfeld Senior Analyst Private Equity International institutional investor sentiment survey • foreword executive summary allocation fees lp – gp relationship future investments and concerns appendix: global fundraising Institutional Investor Sentiment Survey Director of Data Products Dan Gunner Tel: +44 20 7566 5423 dan.g@peimedia.com contents 01 Foreword 03 Executive Summary 06 Allocation 11 Fees 21 LP-GP relationship 29 Future Investments and Concerns 37 Appendix: Global Fundraising Contributors Thelma Azolukwam Sacha Batica Madeeha Chaudhry Vincent Law Sales Joss Onion Tel: +44 20 7566 4283 joss.o@peimedia.com Sean Bookstaver Tel: +1 212 633 1075 sean.b@peimedia.com Senior Analyst Larry Oberfeld Tel: +44 20 7566 5467 larry.o@peimedia.com Head of Production Tian Mullarkey Tel: +44 20 7566 5436 tian.m@peimedia.com Production and Design Manager Miriam Vysna Tel: +44 20 7566 5433 miriam.v@peimedia.com page 1 www.privateequityconnect.com
institutional investor sentiment survey foreword • executive summary allocation fees lp – gp relationship future investments and concerns appendix: global fundraising page 2 About <strong>PEI</strong> <strong>PEI</strong> is the leading financial information group dedicated to the alternative asset classes of private equity, real estate and infrastructure globally. It is an independent company with over 110 staff based in three regional offices – London, New York, and Hong Kong – and is wholly owned by its management and employees. We publish five globally-recognised magazines alongside five news websites, manage an extensive set of databases dedicated to alternative assets, run 24 market-leading conferences globally, publish a library of over 25 specialist books and directories and have a significant training business. We have grown into a widely-known and highly-regarded media business that delivers detailed coverage of the key alternative asset classes of private equity, real estate and infrastructure. We have worked hard to build a reputation for top quality journalism that is written by our own staff and is delivered via accomplished print and digital channels. The same principles of accuracy, genuine market knowledge and excellence of delivery inform our data, events and specialist publication activities also. We have members of our award-winning editorial team sat in all three of our offices and likewise our conference business runs events based from each of our locations. Our multilingual data teams in each office are continually feeding and updating our online databases under the supervision of seasoned analysts. We feel strongly that the industries we cover are at once global and local – so to cover them effectively we must be able to connect with them in every market and in any time zone. We also expect to provide the most relevant information via a variety of channels, ensuring always that our clients value the insight and knowledge we provide them. www.privateequityconnect.com
Page 1: 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 23 and 24: institutional investor sentiment su
Page 25 and 26: A vast majority of LPs conduct due
Page 27 and 28: There is room for improvement with
Page 29 and 30: Focus on… Endowments Distribution
Page 31 and 32: Strategy Appetite institutional inv
Page 33 and 34: institutional investor sentiment su
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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