There is definite proof that sustainability-focused funds are outperforming their conventional counterparts. But some experts believe the traditional explanations for this are wrong.
Investor appetite for private equity has been buoyed by the returns yielded by buyout funds - however investors are cognizant that going forward aggressive leverage will reduce returns from buyouts in traditional markets of North America and Europe. Investors expect that Asia-Pacific buyouts will offer the most attractive investment opportunities in the next 12 months. The development marks the first time since the Barometer was launched that European buyouts have not emerged as the most attractive investment opportunity. This also perhaps represents an accurate reflection of how the centre of gravity for the private equity world is moving eastwards. Interestingly, enthusiasm for Asia-Pacific buyouts is shared by investors worldwide with about half the investors surveyed in each region sharing the bullish assessment of Asia-Pacific buyouts.
The other area investors are optimistic on is ôtake privatesö with 75% of investors expecting to witness increased activity. Investors are increasingly willing to invest directly in funds launched by private equity fund managers. A growing category of investors is even willing to directly invest in private companies, either alongside the fund or on their own. Investors plan to sell more assets in the secondary market as part of a more active approach to managing their portfolios. Two thirds expect secondary sales to increase in the next three years.
Amidst all the euphoria is also a word of caution. Investors are becoming more demanding of the funds they invest in and less willing to invest in follow-on funds if they are not satisfied with performance.
Jeremy Coller, chief executive of Coller Capital (which is a leading investor itself in private equity) says: ôWe have only begun to experience the difference private equity will make to the world economy. Through this young asset class, institutional investors are allocating capital to some of our most dynamic companies û and, increasingly, they are doing so independent of their own location and of companiesÆ ownership structures. There will be much more to come û we are still in the opening chapters of the private equity story.ö
The boss of Thailand’s second-largest pension fund hopes proposed changes in the law will help her diversify more into overseas markets and is particularly bullish on China.
Investors can still find spread premiums in niche private debt, with the asset class's prognosis looking strong, said a keynote speaker at AsianInvestor’s latest summit on Wednesday.
AsianInvestor details the second part of our marquee award winners for 2021, which includes the standout ESG adviser and also the asset manager of the year.
AsianInvestor reveals the first half of our marquee winners for this year's Asset Management awards, including best asset service provider and top alternative fund houses.