Investor appetite for alternative assets remains strong despite broader macro disruption, according to Coller Capital’s latest semi-annual Global Private Equity Barometer.
The 39th edition of the Barometer captured the views of 110 private equity investors from around the world. In total, the investors surveyed oversee an aggregate minimum of $2.2 tn in assets under management. 90% of these investors plan to maintain or increase their allocation to alternatives, with LPs most likely to increase target allocation to private credit (44% of investors) and expected to reduce allocation to hedge funds and real estate. Yet despite their desire to allocate more to alternatives, almost 90% of investors are not prepared to borrow to finance new fund commitments over the next 12-24 months.
There are causes for investor optimism across asset classes and regions. Current macro-economic conditions have been driving credit’s popularity with almost half of LPs stating that higher interest rates have had a positive impact on the performance of their private credit portfolios, whilst three quarters of LPs think that private credit managers will lend to private equity at a faster rate than banks over the next 1-2 years.
Regionally, investors are also optimistic about a recovery in venture capital activity in the next 1-2 years, particularly in North America. Looking to Asia, India and Southeast Asia are viewed as the most attractive markets for buyout opportunities.
