15 December 2014 Barometer
Research & Insights

Coller Capital’s 21st Global Private Equity Barometer, Winter 2014-2015

  • Almost all LPs now expect net annual returns greater than 11% from PE over the next 3-5 years
  • Two fifths of private equity investors will raise their target allocation to the asset class in the next year
  • LPs are continuing to grow their exposure to PE funds focused on ‘real assets’
  • Three in five PE investors believe GPs would benefit from having more gender-diverse teams

Increased investor exposure to alternative assets is being led by private equity, with two in five Limited Partners (LPs) planning an increased target allocation to the asset class in the next twelve months, according to Coller Capital’s latest Global Private Equity Barometer. However, although one third of investors say they will also increase their allocation to real estate, the same proportion will reduce their allocation to hedge funds. (Separately, almost two thirds of LPs say they expect large private equity investors to review their hedge fund exposure in the wake of CalPERS’ decision to stop investing in the asset class.)

Still-strengthening return expectations explain private equity’s popularity with investors. Almost all (93% of) LPs are now forecasting annual net returns greater than 11% from their private equity portfolios over a 3-5 year horizon (up from 81% of LPs two years ago). A quarter of LPs are forecasting net returns of over 16%.

Jeremy Coller
Chief Investment Officer and Managing Partner
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In today’s low-yield world it’s hugely impressive to see such a high proportion of private equity investors expecting annual net returns of more than 11% and Limited Partners are telling us there is more to play for. They believe private equity returns could get even stronger with further enhancements to General Partners’ operational skills and more specialised funds."
Jeremy Coller
Chief Investment Officer and Managing Partner
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