Many limited partners in private equity are grappling with internal resource constraints, particularly around recruiting high-quality talent, at the very time that competition is heating up for access to popular funds.
- That's a major finding of Coller Capital's latest Private Equity Barometer, a bi-annual survey of over 100 global LPs.
Why it matters: This is a recipe for under-performing investments.
63% of respondents said the "scale of our resources" is a significant constraint on improving returns, with 58% specifically citing hiring difficulties.
Over half of respondents (55%) say there is more pressure today to commit to a first close than there was just a few years back, with 61% saying they committed to a first close because of increased LP competition.
More survey results:
- 62% believe too much money is chasing too few deals in North American buyouts. That figure dips to 50% for Europe and just 26% for Asia-Pacific. For venture capital, those numbers go 54%, 23% and 26%.
- 39% of respondents plan to increase overall allocations to alt assets over the next 12 months. 51% plan to increase allocations to infrastructure and 40% to private credit, while 16% plan to decrease allocations to hedge funds.
- 39% of European LPs say ESG is an essential component of investment decisions, whereas only 9% of North American LPs say the same.
- One-third of respondents either have invested in a GP management company, or would consider doing so.