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
Taking a purely passive investment approach is leaving many investors at risk of heightened valuation risks, Allan Gray and Orbis Investments have cautioned.
Annual trimmed mean inflation saw a slight spike in April, according to data from the ABS.
Active managers say that today’s market volatility and dislocation are creating a fertile ground for selective stock picking, reinforcing their case against so-called “closet indexers”.
Platform leaders admit they’re operating under constant pressure and a persistent “state of paranoia” to keep pace with technology that is reshaping how clients access and interact with their wealth.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
92.15 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
53.24 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
43.15 3 y p.a(%)
4
DomaCom Shoreline North Coogee
36.26 3 y p.a(%)
5
GAM LSA Private Shares AU I
35.87 3 y p.a(%)
