Jun 4, 2018

Private equity fund investors have hiring troubles

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.

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.

Go deeper

Coronavirus spreads to more countries, and South Korea ups its case count

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens.

The novel coronavirus continues to spread to more nations, and the U.S. reports a doubling of its confirmed cases to 34 — while noting those are mostly due to repatriated citizens, emphasizing there's no "community spread" yet in the U.S. South Korea's confirmed cases jumped from 204 on Friday to 433 on Saturday.

The big picture: COVID-19 has now killed at least 2,362 people and infected more than 77,000 others, mostly in mainland China. New countries to announce infections recently include Israel, Lebanon and Iran.

Go deeperArrowUpdated 49 mins ago - Health

Centrist Democrats beseech 2020 candidates: "Stand up to Bernie" or Trump wins

Bernie Sanders rallies in Las Vegas, Nevada on Feb. 21. Photo: Mario Tama/Getty Images

Center-left think tank Third Way urgently called on the Democratic front-runners of the 2020 presidential election to challenge Sen. Bernie Sanders on the South Carolina debate stage on Feb. 25, in a memo provided to Axios' Mike Allen on Saturday.

What they're saying: "At the Las Vegas debate ... you declined to really challenge Senator Sanders. If you repeat this strategy at the South Carolina debate this week, you could hand the nomination to Sanders, likely dooming the Democratic Party — and the nation — to Trump and sweeping down-ballot Republican victories in November."

Situational awareness

Warren Buffett. Photo: Daniel Zuchnik/WireImage

Catch up on today's biggest news:

  1. Warren Buffett releases annual letter, reassures investors about future of Berkshire Hathaway
  2. Centrist Democrats beseech 2020 candidates: "Stand up to Bernie" or Trump wins
  3. Reports: Facebook offers up to $5 for voice recordings
  4. America's future looks a lot like Nevada
  5. Greyhound bars immigration sweeps