More than 100 fund managers, all from the US and predominantly along the Northeast corridor, responded to the survey which measured fund activity, debt availability and portfolio fund performance, among other items.
Forecast for First Half 2011: More Fund Activity and More Debt Financing Available; Limited Partner/General Partner Relationship Under Increased Scrutiny.
The Pulse of Private Equity results show a continuation of trends revealed in the firm’s previous Survey (conducted in mid-2010) including a static level of sales or dispositions, but also some marked changes including a rise in the expectations for the closing of acquisitions, especially over the next quarter.
The concerns that fund executives have with respect to limited partners are significant. They rate their perception of the LP’s interest in due diligence as very high, especially as related to the manager (91 percent) and investments (83 percent).
Peter Cogan, Partner and Co-chair of EisnerAmper’s Financial Services practice, said, “Trends suggest that, as the market accelerates its growth, managers should anticipate increased levels of competition for financing and talent.” Cogan also echoes the Survey’s findings regarding the need for more talent at funds. “There will be no loosening of control by managers over portfolio company operations and the best-run funds will continue to add bench strength in the form of operations personnel.” Developing close LP relationships built on transparency and trust is paramount, too, says Cogan. “Gone are the days of casual investors. Due diligence by the investors will steadily increase the pressure on fund teams to perform.”
Click here to read the report.