Survey Shows 81% of Institutional Investors Are Looking for New PE Managers

(January 19, 2011) — More than 80% of global institutional investors plan to seek new private equity managers within the next three years, according to recent research.

The findings come as institutional investors have reported an increased interest in pursuing private equity teams. Following the lead of other large institutional investors in Europe and Canada, South Korea’s National Pension Service (NPS) revealed plans to establish multiple private equity funds, signaling a further evolution of this large institutional player.

The Coller Capital’s Global Private Equity Barometer also showed that just over 40% of limited partners in Europe and Asia are still growing their private equity investments, compared to only 10% of North American investors. All regions, however, shared an effort among investors to find new relationships.

According to the findings, 34% of investors are seeking to up their target allocation to private equity in 2011. “Post-crisis, people are looking to get more invested in the asset class,” Michael Schad, investment principal at Coller, told Global Pensions. Coller Capital partner Stephen Ziff added: “A strong theme that comes through in the survey is that LPs are becoming more and more confident in private equity as an asset class, but they are also becoming more discerning.”

Yet, pensions have expressed that limited resources could prevent them from fully taking advantage of the asset class. The study found that half of the corporate and public pension funds said they could improve their returns if they had more investment staff. “Pension funds are longstanding investors in the asset class…Many have had some sort of expenses cap that has prevented them from having more staff. They don’t feel they have the time to look at each individual relationship,” said Schad.