Private equity General Partners should be as transparent and communicative as possible on the potential impact of Covid-19 on their portfolios, highlighting their ability to protect capital and add value through sustained economic turmoil, according to a new investor survey by Cebile Capital. The report reveals that delays in fundraising are very common (80 per cent of LPs have experienced them), so GPs need to listen to the needs of their investors and not be afraid to delay raising a new fund.
In addition, deployment pace has slowed, due to a more selective approach to new allocations and increased scrutiny in due diligence.
Although LPs are largely maintaining their previous allocations to fund strategies, sizes, and target geography, there is a surge of interest for Distressed/Special Situation/Turnaround funds. Mid-cap, Sector-focused and Credit funds are also seeing higher interest.
Sunaina Sinha, Managing Partner at Cebile, says: “What’s important to note is that LPs continue to trust in private equity, with 35 per cent of respondents expecting to increase their private equity commitments in 2021. And although they expressed uncertainty over the lifting of lockdown measures, they did not expect this to be an operational issue 12 months from now.”