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ALTERNATIVES
State Street 2013 Alternative Fund Manager Survey
Executive Summary: Private Equity
September 2013
22
ALTERNATIVES
State Street 2013 Alternative Fund Manager Study
• In July 2013, State Street conducted a survey of 391 le...
33
ALTERNATIVES
Drivers of Change
Private equity managers view investors’ demands for transparency as the top driver of ch...
44
ALTERNATIVES
Transparency in Focus
Private equity managers are taking a range of actions to address the heightened need...
55
ALTERNATIVES
Evolving Strategies Create Competitive Edge
More than one-quarter of private equity managers are preparing...
66
ALTERNATIVES
Operational Excellence With a Spotlight on Risk
Private equity investors are hungry for more information f...
77
ALTERNATIVES
Challenges for the Future
Private equity managers cite fundraising and generating performance as their top...
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The Next Alternative: Private Equity Asset Class Summary

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Transcript of "The Next Alternative: Private Equity Asset Class Summary"

  1. 1. ALTERNATIVES State Street 2013 Alternative Fund Manager Survey Executive Summary: Private Equity September 2013
  2. 2. 22 ALTERNATIVES State Street 2013 Alternative Fund Manager Study • In July 2013, State Street conducted a survey of 391 leading alternative asset managers in collaboration with Preqin, a leading source of data and intelligence for the alternative fund industry. Of these, 100 were from the private equity sector. • Managers provided their insights on current challenges, priorities and opportunities across the industry, as well as their predictions for the future. About the Research 42% 32% 13% 13% Private Equity Respondents by Region North America Europe Asia Pacific Other
  3. 3. 33 ALTERNATIVES Drivers of Change Private equity managers view investors’ demands for transparency as the top driver of change, followed by more intense industry competition. Source: State Street 2013 Alternative Fund Manager Survey 49% 39% 32% 30% 30% 0% 10% 20% 30% 40% 50% 60% Investor demand for greater transparency around risk and performance Increased manager competition for limited pool of assets Increased regulatory scrutiny of alternative funds Investor demand for more favorable fees Investor demand for greater liquidity at fund level Top Five Drivers of Change in the Private Equity Sector Note: Respondents could select up to three answers. Only the top five responses are shown.
  4. 4. 44 ALTERNATIVES Transparency in Focus Private equity managers are taking a range of actions to address the heightened need for transparency. Source: State Street 2013 Alternative Fund Manager Survey 59% 35% 26% 19% 0% 10% 20% 30% 40% 50% 60% 70% Improving alignment with evolving industry standards such as ILPA, BVCA, EVCA Enhancing investor services functions to respond better to investor inquiries Deliver information to investors via internal Enhanced Portal Technology, beyond the normal Investor Statements Implementing a new Private Equity Investor Portal Top Areas of Focus Cited by Private Equity Managers to Address Heightened Transparency Requirements Note: Respondents could select up to three answers. Only the top five responses are shown. *Institutional Limited Partners Association, British Private Equity & Venture Capital Association, European Private Equity & Venture Capital Association
  5. 5. 55 ALTERNATIVES Evolving Strategies Create Competitive Edge More than one-quarter of private equity managers are preparing to expand the range of investment strategies they offer to investors. 15% 13% 12% 8% 8% 17% 16% 26% 16% 9% Change fee structure Expand into new regions Add new investment strategies with in-house resources Enter joint ventures with investors Offer funds with shorter lifespans Product and Investment Changes Made by Private Equity Managers Since 2008 or Planned by 2018 Introduced this change since 2008 Plan to introduce this change over next five years Source: State Street 2013 Alternative Fund Manager Survey
  6. 6. 66 ALTERNATIVES Operational Excellence With a Spotlight on Risk Private equity investors are hungry for more information from their managers, more frequently. 40% 40% 15% 15% 11% 6% 25% 3% 6% 19% Report more frequently to investors on our investment holdings Report more information to investors on holdings, risk and performance Reduce amount of leverage we employ Use an independent administrator Purchase or license software to upgrade investment ops technology Risk and Operational Changes Made by Private Equity Managers Since 2008 or Planned by 2018 Introduced this change since 2008 Plan to introduce this change over next five years Source: State Street 2013 Alternative Fund Manager Survey
  7. 7. 77 ALTERNATIVES Challenges for the Future Private equity managers cite fundraising and generating performance as their top concerns for the future. Source: State Street 2013 Alternative Fund Manager Survey 83% 65% 27% 20% 20% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Fundraising Generating performance Adapting to regulation Fulfilling investor demands Finding skilled staff Top Five Challenges Predicted by Private Equity Managers Over Next Five Years CORP-0853
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