Majority of LPs happy to commit without in-person meeting – survey

Greg Gille
08 March 2021

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A majority of global LPs surveyed by placement agent Cebile Capital are looking positively at 2021 prospects and eager to double down on private equity.

The placement agent surveyed more than 100 LPs globally in Q1 2021 and found that 51% of respondents expect to increase PE commitments in 2021. This comes on the back of better-than-expected performance amid the turmoil of 2020, with 61% of those surveyed reporting a positive or neutral performance for their PE portfolio last year.

In order to meet these allocation targets, virtual meetings are increasingly acceptable, with 50% of LPs surveyed by Cebile willing to make commitments based on virtual interactions alone (although they noted it requires more effort to develop relationships). Three quarters of respondents have indicated they need at least three months to develop new GP relationships, while 50% prefer to spend six months on these.

Despite the impact of the coronavirus outbreak, which was particularly marked in Q2 last year, 2020 turned out to be a decent year of fundraising by historical standards, Unquote data shows. European managers held 160 final closes for total commitments of around €135bn, with the volume total being down on previous years but aggregate commitments reaching new heights thanks to a number of mega-fund closes. The market was indeed heavily bifurcated, with 60% of the value total raised by just 10 managers.

On the other hand, the difficult conditions did appear to discourage a number of GPs from hitting the road at the worst of the pandemic, with the number of fund launches recorded by Unquote (120) at its lowest in more than five years.

Other findings from the Cebile survey include the continued popularity of co-investments, with 60% of LPs surveyed saying they would consider a co-investment but expect alignment of interest and reduced economics.