Investor Appetite for Fund of Funds Vehicles over the Coming Year |
Date: Wednesday, May 29, 2013
Author: Preqin
Investors look to invest in funds of funds for a number of reasons, such as
portfolio diversification and access to top-tier fund managers. Preqin’s
Investor Intelligence currently tracks over 5,000 active investors in private
equity funds, of which over a quarter (26%) have previously invested in a fund
of funds vehicle. Over the coming year, 18% of investors that are planning on
making new private equity fund commitments have stated a preference for fund of
funds vehicles.
Of the LPs seeking to invest in funds of funds over the coming year, the
majority (61%) are based in North America, with an additional 30% located in
Europe and the remaining 9% based in Asia and Rest of World countries,
including Japan, China and Australia.
With regards to investor types, public pension funds represent the largest
proportion (33%) of LPs planning to invest in fund of funds vehicles over the
coming year, with private sector pension funds accounting for an additional 14%.
Foundations represent 18% of LPs looking to commit to funds of funds over the
next 12 months. Other investor types include endowment plans, insurance
companies, asset managers and banks.
As a whole, a variety of investors around the world plan to commit further
capital to fund of funds vehicles over the coming 12 months, demonstrating this
strategy remains attractive to investors.
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