13/12/2011
By Adam Cadle
One in five investors will reduce their private equity exposure to Europe because of the sovereign debt crisis, Coller Capital’s latest Global Private Equity Barometer has revealed.
In its twice yearly global equity barometer, which researches the plans and opinions of 107 investors in private equity funds in North America, Europe and Asia-Pacific, Coller Capital found that a quarter of investors in private equity funds in Europe plan to reduce their new commitments to large buyouts while a fifth plan to do the same for venture capital.
In addition, just five per cent of Asia-Pacific investors in private equity funds plan greater investment over the next two to three years. Furthermore, the issue of ‘zombie funds’ is also a problem according the report. Figures show that 72 per cent of private equity investors think they will find solutions in very few cases with only 22 per cent stating that this issue is not ‘susceptible of remedy.’
Despite these concerns and investment choices, 68 per cent of North American investors think it will be a good or excellent vintage year for private equity with 93 per cent of private equity investors believing that private equity strengthens the business in which it invests.
Coller Capital CIO Jeremy Coller said: “Some people might be surprised that private equity investors are optimistic about returns when they see so many challenges facing the industry. In investors’ eyes, the industry’s returns are underpinned by its ability to strengthen and add value to the companies in which it invests.”
