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Alternative Market Briefing

Institutional investors and family offices add private equity despite lower distributions

Monday, November 20, 2023

Laxman Pai, Opalesque Asia:

Despite a challenging market environment, the study finds that investors continue to exhibit a growing appetite for private equity, said a study.

84% of family offices and 41% of institutional investors continue to allocate more than 10% of their portfolio to the asset class, compared to 81% and 39% in 2022, respectively, largely driven by continued outperformance relative to other asset classes, according to Montana Capital Partners' 11th Annual Investor Survey.

The survey entitled 'Private Equity in the Spotlight - How Leading Investors Navigate the Slowdown', explores current investment strategies and preferences of global private equity investors across family offices, foundations, and institutional investors.

Meanwhile, distributions in private equity portfolios have visibly slowed down, with two-thirds of respondents having received lower-than-expected distributions in 2023, and a third even indicating that the impact was significant.

This development is expected to continue in 2024 with 44% of respondents anticipating lower distributions than initially modelled. Not surprisingly, the need for liquidity jumped to the top of the list as among the key reasons to consider secondary sales of private equity commitments.

According to the survey, private equity performance has remained broadly resilient with 78% of investors having reported positive or flat performance in 2023 to date, underpinning the attractiven......................

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