LPs set to decrease private equity allocations

The Coller summer 2009 Barometer produced by IE Consulting has painted a bleak picture of LP expectations. According to the survey, 82% of European LPs have declined to reinvest in their GPs over the last 12 months.

The survey suggests that LPs are being more sceptical about the asset class with a fifth of them expecting to reduce their allocations to private equity.

The major concern lies with GPs who hope to go fundraising in the next few years. Allocations from LPs will become increasingly difficult to obtain and indeed an inability to do this would mean certain GPs would get squeezed out of the market.

The survey supports this with LPs stating that they expect 28% of venture investors to go out of business as well as 23% of buyout houses over the next seven years (see page 15).

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