LP concern over GP strategy shift

According to a global barometer by Coller Capital, global LPs are worried about recent GP strategy shifts as the credit crisis continues to bite.

Increasingly buyout firms have started to invest in emerging markets, PIPEs or debt due to the limited financing that is available for large buyouts. This has raised concerns among the LP community that GPs are moving into areas and geographies that they don't know well enough, which could ultimately impact LP returns.

Despite these concerns, however, over a third of the LPs in the survey expect that they will increase their allocations to the asset class. The European buyout market was recognised to have the greatest potential, especially the small (less than $200m) and mid-market ($200m-1bn) segments in low cyclical sectors such as healthcare and technology.

New types of funds like debt vehicles, mezzanine and secondaries were also highlighted to become more favoured in the next 12 months.

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