Our third annual IPEM Allocation and Fundraising Trend Report analyses the investment strategies, trending sectors, and key strengths desired – and offered – by investors and funds for the year ahead.
Based on data from over 2,500 LPs and GPs, the findings explore how LPs are appraising their investment options and offer a roadmap for GPs to refine their strategies and connect with the right investment partners in today's competitive market.
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LP allocation trends:
- Allocation intentions of the LPs in attendance total €100bn, and LPs are set to make fewer large allocations as IPEM Paris attracts more investors with less than €500m AUM
- LPs are becoming more targeted and sophisticated in their approach, and GPs are reacting by offering more co-investment and secondaries opportunities in private equity, and more returns-driven strategies such as asset-backed lending in private debt
- LP appetite continues to be strongest for private equity and private debt, and real assets is now more sought-after than venture capital
- LPs strongly indicate a desire to back new GP relationships over re-ups, and investors at the event hope to make more than 3,300 commitments to new GP relationships over the next 12 months
- Sentiment among LPs on the US cools significantly on last year, with just 67% looking to make commitments there in the next 12 months, down from 76% last year
- Mid-market funds are highly sought-after as LPs focus on finding the highest-quality, best-performing managers
- LPs are leveraging the secondaries market to finetune portfolios, with 50% of those in attendance looking at private equity secondaries funds in the coming 12 months
"LPs are moving strongly towards quality and performance, reevaluating how they look at what were once core private markets strategies. Large- and mega-cap funds increasingly target retail investors, which some institutional investors see as reducing returns expectations for these funds." Antoine Colson, CEO & Managing Partner, IPEM
Fundraising trends:
- GPs at this year's event are less likely to be fundraising than last year, and funds currently in the market are expecting to take longer to close
- There is also robust LP interest in emerging managers, especially spin-out teams, and more than 175 emerging managers will be present at the event
- GPs are meeting LP demand for mid-market offerings, and the majority of funds in the space are focused on just three or fewer sectors to differentiate from peers
- There is a significant increase in the number of GPs operating secondaries strategies across all asset classes at this year's event
"We've seen large numbers of spin-out managers launching in the past couple of years. More senior investors than ever are leaving their employers to launch their own firm, in fact the most in the history of private equity." Nicolas Beaugrand, France PE and ESG Lead – Partner and Managing Director, AlixPartners
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