| |||||||||||
| |||||||||||
 Over the years, private equity has become one of the main components of the endowment diet, with the average fund allocating almost 11% to the class. However, many of those institutions now seem to have their fill. A Preqin survey of 100 endowments around the world, conducted between August and October, found that 42% of the institutions were overallocated to private equity, largely due to the "denominator effect." In other words, endowments are generally setting aside less to new fund commitments -- even though that might hurt a few years down the road -- and instead are holding off till next year or the following to invest. While the hard data is nice for numbers people, the findings are hardly revelatory. Fundraising for private equity funds has been like pulling teeth. Quarterly stats released in early October by Dow Jones Private Equity Analyst showed that in the third quarter, 72 funds secured $25.2 billion, a 70% drop-off from the year-ago period. Year to date, buyout shops have seen fundraising slide 59%, from $195 billion raised by 315 funds through the third-quarter 2008 to only $79.9 billion thus far in 2009. Meanwhile, in the venture capital arena, the once booming asset class saw the fewest new funds being raised since 1994, while total new capital put under management was the lowest since 2003, according to statistics released in October by Thomson Reuters and the National Venture Capital Association. The good news is that 32% of endowments expect to increase their exposure to private equity over time, according to the Preqin study. It's just going to take awhile. Other findings from the Preqin study include:
CategoriesPrivate capital video
Categories
Blog roll
Archives
| |||||||||||
|
|
|
|
|
©Copyright 2009, The Deal, LLC. All rights reserved. Please send all technical questions, comments or concerns to the Webmaster.
