Vast majority of LPs satisfied with GP transparency – survey

The survey respondents comprise 107 LPs based in Europe, North America and the Asia-Pacific region, including the Middle East. The research was conducted from 10 February to 27 March 2020.

Most LPs expect the bifurcation of the fundraising market to continue, with three quarters of LPs (73%) saying they expect the largest GPs will raise an increasing proportion of total PE commitments in the next five years.

However, 67% of LPs reported that they were "very concerned" that the use of forward-looking EBITDA add-backs "is materially inflating the risk of PE investments".

In addition, 48% of LPs require or are likely to require their GPs to obtain independent portfolio valuations via a third party, although 52% admitted that they are currently unlikely to do so.

Of the LPs, 67% agreed that buy-and-build expertise is now possessed by many GPs, as opposed to being a strategy confined to specialised GPs.

The barometer also asked LPs for their views on ESG and climate change. Of the European LPs, 83% said they have a broad internal consensus on ESG within their organisations; this number fell to 64% for Asia-Pacific LPs and 59% for those based in North America.

Meanwhile, 77% of Asia-Pacific LPs feel that GPs are not taking climate change seriously enough, compared with 65% of European LPs and 47% of North American investors surveyed.

LPs were split on whether they expect geopolitical situations to affect their investment strategies, with 51% of LPs saying they do expect an impact. Russia is the area where most LPs (68%) see political risk in investing, while 34% saw a risk in investing in CEE.

Three quarters of LPs also said they would benefit from more opportunities to interact with each other within the market.

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• Topics
• LPs
• UK / Ireland
• Benelux
• France
• DACH
• CEE
• Southern Europe
• United Kingdom
• Coller Capital