LPs fail to invest

Less than half (41%) of LPs made new commitments to private equity in the first half of 2009, according to the latest survey from Private Equity Intelligence (Preqin).

The survey involved 100 institutional investors from around the world and revealed that two thirds of investors are still either at or exceeding their target level of exposure to private equity.

On a more positive footing, despite the slow pace of commitments made by investors so far in 2009, only 9% of LPs intend to reduce their private equity allocation in the next 12 months. Investors are still showing an appetite for private equity over the long term, with 30% intending to increase their target allocations over the next three to five years.

And while the first half of 2009 showed less than half of LPs had made new commitments, of the investors that were surveyed, 54% said they expected to make new commitments in the second half of 2009. In further good news, a further 25% of LPs will recommence investment in 2010.

Manager of investor data, Helen Kenyon, said: “Our survey has shown that though the pace at which new investments are being made to the asset class is considerably down on previous years, investor appetite for private equity looks set to remain strong over the longer term, and there is little evidence to suggest investors will be reducing their allocations or exiting the asset class.”