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Public pension private equity commitments more than triple in June compared to May

Thursday, August 06, 2020
Opalesque Industry Update - Private Equity investment commitments from public pensions tracked by eVestment more than tripled from May to June this year, ending a three-month drop off in commitments that began in March as the worldwide impact of the COVID-19 pandemic intensified. According to the just-released eVestment Private Markets Monitor, public pension plans tracked by eVestment reported commitments to private equity funds in June 2020 totaling $11.7 billion, compared to $3.4 billion in commitments announced in May. The amount even beats the previous 12-month high of $11.16 billion announced commitments reported in September 2019.

June also saw public plan commitment announcements compared to May increase to Private Debt, Real Estate and Real Assets investments, according to the new data.

The spike in Private Debt was also pronounced, with public pension plans reporting commitments to Private Debt funds in June 2020 of $3.6 billion, compared to announced commitments totaling $1.44 billion in May. The spike appears to validate anecdotal evidence of increased investor interest in Private Debt that has percolated through the industry for the past several months and, as with Private Equity, marks a level of interest not seen since September 2019.

"With the pandemic's impact on the global economy in the spring, and wide disruption of normal business processes, many in the industry were expecting a protracted slowdown in commitments from LPs, something we did see from March to May," said Katey Bogue, Head of Private Markets at eVestment. "But as more time has passed, investors and their consultants have had a chance to adapt processes and analyze the long-term economic implications and restart activity. Many LPs pulled back on commitments during the 2008 crisis, when actually they could have benefited from staying steady: private funds are well positioned to capitalize on underpriced assets during a crisis and generate value, so it is encouraging to see investors stick to commitment plans this time around."

New commitments to Real Estate and Real Asset private markets investments, while on the upswing in June compared to May, were more muted and did not reach their September 2019 highs. In June, public pensions tracked by eVestment announced commitments to Real Estate representing $3.25 billion, compared to announced commitments totaling $1.2 billion in May. In June, public pensions announced commitments to Real Assets investments representing $2.13 billion compared to commitments totaling $520 million in May.

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