LPs see no let-up in pace of new commitments - survey

A clear majority of respondents believe now is a good time to make commitments to the asset class despite travel restrictions and general economic uncertainty tied to COVID-19, with Asia-based investors appearing less bullish than their peers in North America and Europe.

Moreover, 58% have seen no let-up in the pace at which they add managers to the portfolio and 45% expect to accelerate these new commitments over the next 18 months despite 57% expecting a correction in the technology market during this period. Two in five – rising to five in 10 in North America – say they are more likely to refuse re-ups than in recent years, with poor performance by some distance the most common reason for ending active relationships.

An inability to meet managers face-to-face hasn’t necessarily impaired job performance, with nearly half saying their personal productivity has improved since the onset of the pandemic. In addition, two-thirds said they are now happier with their work-life balance, with the challenges of working from home more than offset by the advantages of less frequent travel.

Another key finding in terms of job performance was that half of LPs believe a robust environment, social and governance (ESG) policy will lead to improved long-term returns for their programs, yet North American investors are reluctant to have remuneration tied to the achievement of ESG goals. Fewer than one-third support this move, compared to more than half in Europe and Asia.

At the same time, climate change and sustainability issues were identified as the single largest influencing factor on investment decisions over the next five years. Healthcare and biotech came a close second, followed by demographics and artificial intelligence in third and fourth places.

The Coller barometer surveyed 111 investors in private equity funds globally, of which 21% are based in Asia Pacific.

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• Topics
• LPs
• Fundraising
• GPs
• Asia
• ESG
• Coller Capital