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Survey: Wary investors retreat from private equity

A recent poll of institutional and private investors has revealed that a number of participants are scaling back their private equity commitments and planning to stay out of the market for the near term.

A recent survey of nearly 90 private and institutional investors shows that more than a third of participants have lowered their allocations to alternative investments, while a majority are expecting to wait for some time before making fresh commitments.

The survey also showed that 54 percent of investors plan to keep their asset allocations constant, while close to 50 percent believe asset prices will need to stabilise for a period of six months to a year before investors return to the market. Thirty percent of managers also felt it will take a year or longer for market conditions to improve.

We have never seen so many rational, cool-headed limited partners refrain from making future commitments.

Steve McMenamin

“Leverage, liquidity and lack of confidence are still keeping the sophisticated investor on the sidelines,” said Steve McMenamin, executive director of the Greenwich Roundatble, which conducted the survey along with Quinnipiac University. “We have never seen so many rational, cool-headed limited partners refrain from making future commitments to alternatives.”

The Greenwich Roundtable is a research and educational organisation that represents investors who allocate capital to alternative investments. Its  members together represent more than $6.4 trillion in assets under management.