10 June 2014 Article Publication
Barometer Coller Research Institute

Coller Capital’s 20th Global Private Equity Barometer, Summer 2014

  • One third of PE investors have increased their target allocation in the last two years
  • LPs are engaging with first-time funds and deal-by-deal investment – while trimming core GPs
  • Half of LPs at US pension plans would prefer to work for a Canadian pension plan
  • Too much debt is damaging North American private equity, LPs say

Family offices and insurance companies have led the way in increasing target allocations to private equity over the last two years, according to Coller Capital’s latest Global Private Equity Barometer – two thirds of family offices and half of insurance companies have done so. As a consequence, over half of insurance companies are below their target allocation to the asset class and need to accelerate their pace of new commitments.

Increasing target allocations reflect private equity’s robust performance in a low-yield world: one quarter of LPs are now reporting net annual returns of at least 16% across the lifetime of their private equity portfolios, and seven out of ten investors have achieved net returns of 11% plus.

Additional Barometer findings

The Summer 2014 edition of the Barometer also charts investors’ views and opinions on:

  • Returns from ‘bubble year’ PE funds
  • The implications of crowd-funding for venture capital
  • LP investment in back-office systems
  • Expected impact of the AIFM Directive
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In a sense, Limited Partners are gamekeepers turned poachers; they know they will need to adopt an ever more proactive approach if private equity is to remain the best-performing part of their investment portfolios. This is reflected not only in their continuous reshaping of their private equity holdings, but in a willingness to explore first-time funds and deal-by-deal commitments – and even to contemplate changes to hurdle rates and fees.”

Jeremy Coller
Chief Investment Officer and Managing Partner
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