Here’s the Latest on What LP’s think of GP’s

February 13, 2013

Duff & Phelps, in collaboration with Mergermarket, has published a new report titled “Alternative Investments Outlook 2013”. This report is based on interviews with 100 limited partner investors operating across North America and Western Europe.

Here are the report’s top six findings. At the end of this article is a link to download a free copy of the report.

Nearly half of respondents say that their private equity investments have surpassed their expectations and, of those who plan to adjust their allocation to private equity within the next year, the overwhelming majority (95%) expect to increase the amount apportioned to the asset class.

Limited partners are increasingly looking to side-step general partners to provide direct lending to companies. This is attributed partly to the opportunity afforded by the lack of bank lending and, among those who foresee more direct lending, 73% see this as a new and growing area for limited partners.

A key trend to emerge from the survey is an increased interest in the market for secondary private equity commitments. Nearly three-quarters of respondents expect limited partner investors to acquire more secondary commitments.

Three in four respondents stated that they have asked general partners for greater transparency in the last 24 months. When choosing a fund manager, 70% of those surveyed indicated that transparency was the most important factor, ahead of even the fund manager’s strategy and track record of performance.

There is also increased demand for timely valuation information, with 63% of respondents citing the timeliness of reporting as the most common problem with valuation information.

Many limited partners respondents are optimistic about the climate in Europe. Although Northern Europe is most frequently mentioned by respondents as fitting with their investment strategies, over half of interviewees see Southern Europe, including Portugal, Spain and Italy, as offering up attractive opportunities.

For a free copy of Duff & Phelps’ Alternative Investments Outlook 2013 click HERE.