Industry must adapt, Investec study finds

GPs must differentiate their investment strategy in order to attract LPs, Investec Private Equity Insights 2013 says, as investors seek value creation in difficult market conditions.

Figures including Investindustrial's Andrea Bonomi, Mark Redman of Omers Private Equity and Mark Nicholson of SL Capital Partners, also suggest that new fund structures must be developed to provide LPs with much needed flexibility. Failure to evolve as the industry changes will result in certain fund managers being left behind, they said.

In a similar vein, representatives of Syntrus Achmea, Duke Street and Campbell Lutyens called for more innovation in the industry, describing the current pace of change as "glacial", with particular focus on the need for improved liquidity in order to lure non-traditional private equity investors into the asset class. New models and strategies must be devised to meet the changing needs of investors, which will demarcate those private equity firms that will lead the industry into its next phase of growth.

The study also suggested that public misunderstanding of private equity continues to plague the asset class, which could result in even tighter regulatory constraints and a tougher fundraising environment.

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