Fundraising prospects bleak over next seven years

The Coller Capital Summer 2009 Global Private Equity Barometer, produced by IE Consulting, offers a dreary picture of LP expectations. The survey reports that 82% of European LPs have refused a re-up request over the last 12 months, while a third of all LPs are planning to reduce the number of GP relationships going forward.

The findings suggest that LPs are now more sceptical about private equity performance, with a resounding three quarters of investors expecting fewer distributions across their portfolio.

LPs' reluctance to invest in private equity is likely to cause concern amongst GPs that need to go on the road in the next couple of years, as a failure to raise would effectively kill an investor group. The survey supports this bleak hypothesis, with surveyed LPs stating that they expect 28% of venture investors and 23% of buyout houses to go out of business over the next seven years.

Moreover, LPs willing to allocate funds will become far more demanding of GPs: 80% of respondents expect an improvement in terms and conditions.

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