Private credit and secondaries are the top strategies that institutional investors plan to add to their target allocations, while these same investors are less inclined to make new commitments to private equity, real estate and alternative investments overall, according to Coller Capital’s 42nd “Global Private Capital Barometer,” which tracks the sentiment of limited partners toward private assets.
According to Coller Capital’s survey, conducted earlier this year, 45% of LPs plan to increase their target allocations to private credit over the next 12 months, up from 37% in the firm’s survey conducted in fall 2024.
Secondaries ranked second in LP interest: 37% of LPs surveyed said they intend to increase their target allocations to private investments on the secondary market, which may offer more aggressive pricing or shorter holding periods than new primary market deals. That interest is up from 29% in the previous survey. As private equity exits have slowed, LPs have turned to the secondaries market to offload investments in aging private equity vintages, sometimes at a discount.
Interest in infrastructure investments remains unchanged, with 33% of LPs saying they plan to increase their infrastructure allocations, the same as in last fall’s survey. While 32% of LPs reported planning to increase their alternatives target overall over the next 12 months, that figure was down from 34% in the prior survey.
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Private equity and real estate have both seen a decrease in LP target allocations. In the most recent survey, 28% of LPs said they plan to increase their targets for private equity and 18% for real estate, down from 34% and 24%, respectively.
LPs, however, plan to increase significantly their targets to hedge funds, which have been less favored in recent years. Last fall, only 8% of LPs said they planned to increase their target allocation to hedge funds, but by early 2025, the figure rose to 22%.
Coller Capital surveyed 110 institutional investors between February and April. Of those, 44% were located in Europe, 39% in North America, 13% in the Asia Pacific region and 4% in the rest of the world.
Approximately 25% of respondents managed at least $50 billion; 20% managed between $20 and $49.9 billion; 15% managed between $10 billion and $19.9 billion; 7% between $5 billion and $9.9 billion; 23% managed between $1 and $4.9 billion; 3% between $500 million and $999 million; and 7% less than $500 million.
The survey queried these allocators’ allocations and commitments, macroeconomic outlooks, views on secondaries transactions, outlook for private equity and views on the adoption of artificial intelligence.
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Tags: Alternative Investments, Alts, Coller Capital, Private Credit, Private Equity, secondaries
#Interest #Rises #Secondaries #Private #Credit