European investors have low interest in secondaries funds

Only 13 percent of investors in Europe said they plan to focus most of their attention on investing in secondaries funds next year, according to a recent survey conducted by placement advisory firm Probitas Partners.

In its Private Equity Institutional Investor Trends for 2016 Survey released on Tuesday, Probitas asked firms which sectors they plan to focus most of their attention on in 2016. It grouped respondents in three categories: Europe; Asia, Australia and Middle East; and US and Canada. Respondents could pick no more than seven of the 26 suggested sectors.

The top pick from all three groups was US mid-market buyouts, but interest in secondaries funds differed depending on the regions.

Surprisingly, investing in secondaries funds ranked low in European investors’ plans, coming in 17th position.

About 23 percent of respondents in Asia, Australia and in the Middle East said they plan to focus their attention on secondaries funds, an interest equal to that in European mid0market buyout funds. Interest from US and Canadian respondents was a little bit lower as 19 percent of them said they would focus their attention on secondaries funds.

Globally, the number of investors who are active in key areas of the secondaries market, whether investing in secondaries funds, buying, or selling on the secondaries market, increased this year, Probitas found.

For example, the number of investors who have sold or are considering selling positions in the secondaries market rose to an all-time high of 40 percent, up from 31 percent in last year’s survey. About half of North American respondents plan to be active in selling funds.

However, investors purchasing direct positions in fund stakes on the secondaries market dropped  from 50 percent last year to 41 percent this year. Additionally, the share of those investing in secondaries funds decreased from 49 percent last year to 40 percent this year.

Source: Probitas Partners’ Private Equity Institutional Investor Trends for 2016.

Source: Probitas Partners’ Private Equity Institutional Investor Trends for 2016.