Limited partners expect to keep up pace of alts investments – Preqin

The vast majority of limited partners plan to invest at least as much into private capital over the next 12 months as they have done in the previous year, according to a new report from Preqin.

Among the 350 limited partners surveyed in November, 51% expect to invest the same amount over the next 12 months, while 35% plan to invest more into private capital, according to Preqin’s Investor Outlook: Alternative Assets, H1 2022.

Only 14% of surveyed limited partners expect to invest less.

Also according to the report, 72% of surveyed investors believe fund managers are adopting environmental, social and governance policies due to pressure from existing and prospective limited partners, which was in line with previous surveys, according to the report. However, the percentage of investors who believe political pressure is a reason for adopting ESG policies has increased to 36% of respondents from 26% of respondents last year.

Despite feeling the pressure to adopt ESG policies, 55% of surveyed investors say an ESG focus has no impact on performance, while 23% says it has a positive impact, and 22% say it has a negative impact.

“Despite the uncertainty around us, investors, managers and advisers continue to look for opportunities in the rapidly growing and evolving alternative assets industry,” said David Lowery, senior vice president and head of research insights at Preqin, in a news release Wednesday announcing the report. “The pandemic that defined the past two years has proven a catalyst for taking a closer look at the value of human and natural capital — climate change and broader ESG concerns are no longer a niche but the norm.”

The report is available to Preqin subscribers on its website.

Leave a Comment