Report shows that almost 90% of investors intend to at least maintain investment levels in the next 12 months
Global investment in private capital markets is set for continued strength in the next 12 months.
A report from industry analysts Preqin shows that 86% of limited partners (LPs) plan to invest the same or more in the months ahead and 70% said that performance had met or exceeded expectations, compared with 72% of hedge fund investors.
The poll of 350 LPs globally found that 35% plan to invest more in private capital over the next 12 months, with a further 51% expecting to invest the same amount, and just 14% planning to invest less.
This sentiment is driven by concerns including competition for assets, valuations, and rising interest rates.
ESG impact
Thirty percent of Fund managers across all alternative asset classes said they have an active ESG policy.
The share is highest in private equity at 43%, followed by private debt and infrastructure, at 39%. Hedge funds (30%) trail the field for the second successive year.
Nearly three quarters (72%) of investors believe fund managers are adopting ESG policies because of pressure from existing and prospective LPs, in line with previous years.
However, political pressure is also more likely to be considered a factor in the growth of ESG considerations with investors putting this as the third most important factor, up from seventh in the previous poll.
There is a split between those investors who think ESG focus has a positive impact on performance (23%) and those who think it is negative (22%), while 55% say it has no impact.
“Despite the uncertainty around us, investors, managers, and advisors continue to look for opportunities in the rapidly growing and evolving alternative assets industry,” said David Lowery, SVP and head of research insights at Preqin. “The pandemic that defined the past two years has proven a catalyst for taking a closer look at the value of human and natural capital — climate change and broader ESG concerns are no longer a niche but the norm.”
