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Private equity – A competitive and sophisticated market

Preqin has launched its 2015 Preqin Global Alternatives Reports, revealing significant growth in assets held by private equity, hedge fund, private debt, real estate and infrastructure fund managers. Total industry assets now stand at USD6.91tn*, up from USD6.22tn as of this point last year.

From their conversations with investors, Preqin believes the majority remain confident in the ability of alternative assets to help achieve portfolio objectives. Indeed, across all asset classes a much larger proportion of investors plan to increase their exposure rather than cut back their allocations to alternatives.

The 2015 Preqin Private Equity & Venture Capital Report provides a comprehensive review of the industry along with contributions from respected industry figures and the outlook for the coming year. Some of the key findings in the report are as follows:

• Total private equity assets under management stand at USD3.8tn as of June 2014 (including private real estate and infrastructure funds), up from USD3.5tn as of June 2013.

• In H1 2014 (the latest data available), a total of USD444bn was distributed to investors, indicating 2014 is likely to surpass the USD561bn of capital returned to investors throughout the whole of 2013.

• Fifty-four percent of private equity fund managers feel there has been an increase in competition for deals compared to a year ago.

• As investor appetite for private equity reaches new highs, so does their interest in alternative routes into the asset class: co-investments, directs and separate accounts are all seeing greater interest and activity from LPs. This is creating new opportunities for experienced and sophisticated LPs, and putting increased pressure on GPs to demonstrate value to their investor base. The bottom line is a growing and increasingly sophisticated private equity and venture capital industry, with huge opportunities and challenges for LPs and GPs alike.

To find out more about the 2015 Preqin Global Alternatives Reports, including full contents and sample pages, visit our website.

*The USD6.91tn of industry assets is made up of USD3.02tn in hedge fund assets, USD3.79tn in private equity assets (which includes USD742bn in real estate assets, USD296bn in infrastructure assets and USD387bn in non-direct lending private debt assets), and USD97bn in direct lending assets.

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