The large majority (70-80%) of North American and Asia-Pacific LPs believe their private equity portfolios need modifying to prepare them for the next economic downturn, according to Coller Capital’s Global Private Equity Barometer. European investors are more sanguine, with only 45% believing their portfolios need modification.
- LPs portfolios are not ready for economic downturn
- Investors expect a significant divergence of returns between GPs in the next downturn
- PE/VC associations “should be doing more” to explain and defend private equity
- LPs are planning to replace oil & gas exposure with green energy and technologies
- Private equity investing is not suited to retail investors, Limited Partners say
Despite this difference, nine out of ten LPs acknowledge the significant risks to their medium-term PE returns posed by today’s macro environment and high asset prices. When the cycle does turn, almost all LPs expect to see a significant divergence in performance between GPs and between funds.