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One-third of GPs expect LP defaults

A survey conducted at PEI Media’s annual CFO and COO Forum in New York also revealed that one in 10 firms have recently experienced a defaulting limited partner.

A third of the roughly 200 private equity chief financial officers and chief operation officers attending the PEI Media CFO and COO Forum in New York expect to see limited partner defaults in the future, while 9 percent have recently experienced defaults by their LPs.

The survey was conducted via an electronic, anonymous audience poll. According to the survey, 33 percent of the respondents expect more LP defaults in the future; 38 percent do not expect to see LP defaults and 29 percent of respondents are not sure if they will or not. The survey found 9 percent of respondents have recently experienced LP defaults.

The survey also found that 25 percent of respondents have received inquiries from LPs about reducing their commitments.

The survey was conducted during a panel about the impact of the global liquidity crisis on private equity fund operations.

The panel consisted of Matthew Janchar, director of capital markets at Berkshire Partners; Andrew Maloney, senior vice president of RBS Citizens; Stephen Ramsthaler, managing director of Credit Suisse, alternative investments; and Marc Unger, COO and CFO at CCMP Capital Advisors.