Illustration: Rebecca Zisser/Axios

Three-quarters of limited partners in private equity funds say they want more opportunities to interact directly with one another, according to a Coller Capital survey released Monday.

Why it matters: LPs have historically been siloed, thus giving them less leverage and visibility when negotiating terms with general partners.

Flashback: In 2009 I organized something called the LP Congress, a one-day series of working groups in NYC for pension, endowment, family office, and fund-of-funds managers.

  • The most notable takeaway was how few of the hundred or so attendees had ever met each other before.

Today: Things don't appear to have changed too much, despite a decade in which LP complaints about fund fees have been bolstered by a cavalcade of regulatory fines.

  • Coller Capital, which surveyed 107 global LPs between February and March, discovered that 61% of European respondents and 50% of North American respondents want more opportunities to interact with other LPs invested in the same funds as they are.
  • A whopping 80% of North American LPs want more chances to interact with LPs outside of their region, while 47% want more chances to interact with LPs inside of their region.

What's the problem? General partners, particularly in how they rarely provide LPs with lists of what other institutions are invested in their funds.

  • Such information can eventually be gleaned via attendance at annual LP meetings, but GPs are known to position their own staffers so as to be in the middle of even informal LP conversations during coffee breaks.
  • Certain LPs are effectively prevented from even attending such meetings, due to either budgetary concerns or, in the case of public fund managers, regulations against accepting such "gifts" as a high-priced meal.
  • And then there's the pandemic, which makes any sort of physical meetings more difficult and international meetings nearly impossible.

Caveat: Coller did find that 82% of LPs are now satisfied by the level of transparency provided to them by GPs, up from a pitiful 40% back in the summer of 2009.

  • Plus, LPs today have a whole host of video, networking and encrypted chat options that didn't exist 11 years ago.

The bottom line: General partners may be barriers to LP interaction, but LPs must do a better job at hurdling them.

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