TrueCar Broke The Ice; LPs Hope for More Direct Equity Investment Opportunities
TrueCar broke the ice. Many LPs hope the hole gets larger.
TrueCar, a startup that lets consumers check the prices of car sales, said Wednesday it raised $200 million in debt and equity financing, with part of its equity investment marketed on the secondary site SharesPost.
SharesPost says it is the first time a company raised such primary capital on an online market place.
If it is up to many limited partners, it won’t be the last. In a Preqin survey released yesterday, many institutional fund investors were found to be eager to make direct investments in private companies to complement their fund portfolios. (See chart below.)
According to the study conducted in June, 54% of more than 100 institutional investors surveyed said they were interested in making direct investments. Most prefer deploying capital alongside fund managers. Of those who already co-invest with GPs, 30% said they hoped to increase their activity this year. Of those who invest independently, 28% expect to dig deeper in their pockets.
Obviously it remains to be seen what August’s financial market volatility will do to the buying intentions. But the survey suggests that LPs would rather see more options than fewer.
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