Back to School: Augentius: 61 pct of American GPs think 2017 will better than last year

  • Augentius questioned 200 GPs and LPs globally in December
  • Only 14 pct of American GPs think 2017 will be worse than last year
  • 43 pct of LPs think 2017 will be worse than 2016

More than half of GPs in the Americas don’t think political issues will much affect their investment strategies or opportunities. In fact, most say 2017 will be better than last year, a survey from Augentius shows.

The private equity fund administrator asked GPs and LPs whether the election of Donald Trump, Brexit or the forthcoming European elections would affect their strategies or opportunities. Some 61 percent of American PE executives shrugged off these concerns and are more positive about 2017 than 2016, Augentius said. One in seven, 14 percent, of these GPs say this year will be worse than last year.

More than one-third, or 34 percent, of EMEA managers say 2017 will be better than 2016 while 22 percent said it would be worse. Asian managers were the gloomiest of the bunch. Only 30 percent said 2017 would be better while 40 percent said this year will be worse.

“There is a view that the election of Donald Trump may reduce the level of regulation and create new investment opportunities for investment — both in smaller companies and infrastructure,” Augentius said.

LPs held different views than GPs. Forty-three percent of investors said they thought 2017 would be worse than last year. More than one-third, or 36 percent, were positive, saying 2017 would be better than 2016.

Augentius conducted the 2017 survey during the last two weeks of December. The fund administrator questioned 200 GPs and LPs globally to produce “Through Our Industry Eyes.” Augentius asked executives to reflect on the year they just had and the year they expect to have.

Questioned about their challenges in 2017, more than half, or 58 percent, of GPs from the Americas said fundraising is their top concern this year. Market regulation remained a strong concern, coming in second with 34 percent. In third place, 32 percent of American GPs picked investment opportunities while tax regulation placed fourth with 29 percent.

What were GPs least worried about? LP communications. This issue, across all groups of PE executives, came in at the “bottom of the heap,” Augentius said. Only 9 percent of American and EMEA GPs, and 5 percent of Asia PE executives, said they expected LP communications to be challenging this year.

More than half of LPs, 56 percent, said investment opportunities would be their biggest challenge this year. Valuation issues came in second with 46 percent, while market and tax regulation tied for third place with 30 percent each.

But when LPs were asked what was their biggest issue in the daily administration of their portfolios, 34 percent of investors picked lack of transparency around fees as their top challenge. Late manager reporting came in second with 30 percent, while 23 percent of LPs chose insufficient detail in reporting, Augentius said.

“Investors have some real needs and wants and managers must continue to develop their reporting and relationships with their investors if they are to continue to attract new investment,” Augentius said.

Action Item: Contact Augentius’s Brendan Tyne at brendan.tyne@augentius.com

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