(May 1, 2013) – Markedly fewer funds-of-funds are among private equity’s 100 largest investors this year compared with 2012, Preqin data has shown.
In March 2012, funds-of-funds made up half of the asset class’ top 100 investors. As of April this year, 43 made the list.
Banks also dropped off: the portion fell by half, from 4% in 2012 to 2% this year.
So who is taking over those spots? Asset owners, largely. Two more public pension funds cracked the top 100, bringing total representatives up to 23. Another corporate fund and sovereign wealth fund also made it this year—each group now accounts for 5% of top investors.
Finally, asset managers took up some of the slack afford by exiting funds-of-funds. Managers now make up 11% of the list, the data report said, up from 9% last year.
Likewise, private equity’s major investors now hail from further afield than in previous years.
Just two investors based outside of North America or Europe were among the top 100 in 2012. Now, the Middle East alone has two representatives. China and the Far East garnered 5%, plus Australasia brought the current total of investors outside of the western world to eight.
North America dominated with 69% of the investors last year; now, it’s down five percentage points to 64%.
“Overall, the change in the composition of the top 100 investors in private equity by capital allocated to the asset class over the last year indicates increasing diversity in both geography and investor type,” Preqin analysts wrote.
“It is likely that, going forward, this diversification will continue, especially as Asia-based and other emerging market-based investors contribute an increasing amount of capital to the asset class. Through the financial crisis, private equity has managed to remain an attractive option for many investors, despite its illiquid nature.”