Incentivising a larger proportion of portfolio company employees would lead to higher investment returns, according to almost half of the Limited Partners (LPs) responding to Coller Capital’s latest Global Private Equity Barometer. A mere 6 per cent of investors thought that broadening the incentivisation of portfolio company staff would be detrimental to returns.
The pension funds, insurance companies, and asset managers that make up the bulk of the industry’s backers believe strongly in the private equity model – almost 90 per cent of LPs think that most small and mid-cap public companies would benefit from periods of private equity ownership as they grow. And a large majority of LPs also see private equity sponsorship as a positive indicator in assessing the short-to-medium-term prospects of private companies seeking to IPO.
However, Limited Partners also think the industry needs to evolve. The majority of LPs think that a policy of simply staying within the law is no longer enough and that societal pressure will force the industry to begin self-regulating.