LPs lower expectations for PE, fret about deal flow

A majority of PE investors expect returns in the asset class to decline in coming years, and a growing percentage are beginning to vet potential partners on their ability to drum up deals.

GPs and LPs expect returns to decline, and both are concerned about competition for deals and high purchase prices for companies, an eVestment survey shows. But LPs are more pessimistic: 41 percent of investors said they were very or extremely concerned with competition for deals, compared with 25 percent of fund managers.

“Competition for deals was the number one concern for both fund managers and investors,” said Graeme Faulds, director of product for private markets at eVestment. “From the investors’ perspective, there is concern about the amount of dry powder in the market, and that is probably what’s driving this concern regarding the competition for deals.”

Competition took a much more prominent place among industry concerns compared with 2018, when survey respondents ranked it as the fourth-highest concern.

Check out the full story, published by Buyouts: https://bit.ly/2RibZcD

 

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