Data & Intelligence
2016 Global Limited Partners Survey
Posted On: 25 Apr 2016
The 12th annual edition of EMPEA’s Global Limited Partners Survey features the views of 107 limited partners (LPs) on the emerging markets private equity (EM PE) asset class. This study aims to provide the industry with a better understanding of how LPs’ strategies for investing are evolving; what challenges they face in managing their portfolios; what their return expectations are; and which geographies, sectors and fund strategies they view as attractive.
Key findings include:
Over the next two years 40% of LPs anticipate increasing the dollar value of new commitments to EM PE funds (versus 46% in the 2015 survey), while 38% plan to maintain their current pace of new commitments. In contrast, 22% plan to decrease their commitments (versus 16% in the 2015 survey).
Southeast Asia ranks as the most attractive emerging market for GP investment over the next 12 months, followed by India and Sub-Saharan Africa, respectively.
Slowing or negative GDP growth in emerging markets and currency volatility top the list of LPs’ portfolio concerns followed by past fund performance.
Performance of EM PE portfolios has met or exceeded expectations for 70% of LPs, down from 75% and 78% in the 2015 and 2014 surveys, respectively. Nonetheless, LPs still expect 2015-vintage EM funds to outperform their developed markets counterparts.
Health care and consumer goods and services are viewed by LPs as the most attractive sectors in which to build exposure via EM PE, matching their ranking among all sectors in the 2015 survey.
Operational improvement and multiple expansion are more important in driving returns for EM PE funds than for developed markets funds, according to survey respondents.
Team experience is the most important factor for LPs when selecting an EM PE fund manager, followed by operational expertise in target sectors and strength of past fund performance.
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Rashad Kaldany | Executive Vice-President and Growth Markets, CDPQ
David Rubenstein | Co-Founder and Managing Director, The Carlyle Group