2017 Global Limited Partners Survey
The 13th annual edition of EMPEA’s Global Limited Partners Survey features the views of 127
representatives from 106 limited partners (LPs) on the emerging markets private equity (EM PE)
asset class. This study aims to provide the industry with a better understanding of how LPs’ plans
and strategies for investing are evolving, how they are accessing the asset class, what challenges
they face in managing their portfolios, what their return expectations are and which geographies
and sectors they view as attractive.
Key findings from the 2017 Global Limited Partners Survey include:
- Despite year-on-year declines in EM PE fundraising and investment activity in 2016, the majority of LP respondents* do not anticipate a drop in the dollar level of their new commitments to EM PE over the next two years. However, 25% of respondents* plan to decrease the proportion of their total PE allocation targeting emerging markets—up from 13% of LPs in the 2016 survey—suggesting that for some institutions, EM PE allocations may not be keeping pace with rising allocations to PE globally.
- More than half of LP respondents expect to form fewer than five new EM PE fund manager relationships in the next three years—in line with a global trend toward capital concentration and relationship consolidation. DFIs expect to form the most relationships, with 84% of respondents expecting to form five or more new relationships and 26% expecting 11 or more. Operational expertise in target sectors is the most important factor for LPs when evaluating new EM PE fund managers, with 61% of survey respondents considering operational expertise as very important.
- Two-thirds of LPs currently seek co-investment opportunities with EM PE funds, and over half expect to increase co-investment activities with EM PE funds over the next two years. While fewer LPs (43%) currently seek direct investment opportunities in EM-based companies, 35% plan to increase their direct, non-intermediated exposure over the next two years.