Survey captures opinions of industry-leading
private markets participants
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Report findings submitted by Hamilton Lane Advisors
The current investment environment appears "bullish," at least that is the general sentiment of respondents of a newly released private markets survey.
Private markets asset management firm Hamilton Lane Advisors’ fourth annual survey offers a telling look into the private markets, capturing the insights and opinions of industry-leading investors and fund managers from around the world. This year's Private Markets Survey included a mix of 66 limited partners and general partners representing more than $2.9 trillion of global assets.
The firm's survey illustrates sector-specific and regional themes:
- Unsurprisingly, private credit was a big theme as the strategy captured the third-highest amount of capital raised during the last three years. Twenty-four percent of general-partner respondents went so far as to say that, if they were investing their own money as a limited partner, they would allocate the most to private credit. Forty-one percent of limited partners have a current allocation to private credit that is at or above 5 percent. Further, 31 percent of limited-partner respondents plan to increase the most allocation to private credit, and not one respondent foresees negative returns for the strategy over the next five years.
- Europe made a comeback this year, garnering a more positive outlook for the first time since the firm's 2013 survey. No respondents plan to decrease allocation to the Eurozone over the next two years. Instead, nearly 8 percent plan to increase allocations the most to this region. European public equity return sentiment also showed a dramatically more positive shift, where expectations in the 10 percent-plus return range almost doubled from 8 percent to nearly 16 percent year-over-year.
- For the last three years, other buyouts – including SMID and buyout strategies other than large buyout – have been in the top slots for where investors plan to increase allocation the most, although the extent of which has been on a slight decline. Despite investors indicating they would allocate more to SMID buyout than large buyout over the past four years, large buyout actually saw the most fundraising - 23 percent for large vs. 16 percent for SMID. In the scenario of general partners investing their own money as a limited partner, large buyout made a comeback this year, whereas SMID buyout saw a pretty dramatic reduction in favor.
- Throughout the private markets asset class, during the last several years there has been a growing emphasis by industry participants on improving operational practices, transparency and efficiency. A full 83 percent of Hamilton Lane's survey participants are reportedly dedicating real time and effort to improving their management and execution within their organization. Also, a full 94 percent expect their team size to grow over the next three years. While nearly 60 percent report relatively modest increases (1-20 percent) in their infrastructure/technology budgets, nearly 40 percent of respondents report that they are making meaningful investments (21 percent or more increases) in these budget areas.
The full survey is available on Hamilton Lane’s website here.
Hamilton Lane gathers and shares intel from many of the premier general partners, as well as some limited partners in the private markets. Included in the survey is a group of 27 leading and global general partners with diversified investment expertise, in areas including buyout, mid-market, credit, growth, natural resources, and venture capital, with an aggregate of more than $1.1 trillion in assets under management. Also included are 39 of the world’s largest limited partners, institutions including public pensions, endowments, family offices, corporate pensions, sovereign wealth funds, Taft-Hartley unions and insurance companies, representing more than $1.8 trillion in assets under management.
Hamilton Lane is an alternative investment management firm providing private markets services to investors around the world.
The information contained in this report is based upon results of the firm's survey of a number of private market participants. The results of the survey may not necessarily represent the opinions of the firm or its employees, officers or directors.