Private equity managers are getting increased new commitments from LPs compared to last year, and more say one of the primary concerns faced in 2011 will come not from the economy or from their portfolios, but from the SEC.
BDO USA’s new PErspective Private Equity Study, which surveyed more than 100 respondents, found that 56% of PE fund managers say LPs are increasingly committing to new funds.
Despite that bright spot, industry pros continue to labor under a dark cloud of increased federal requirements. Thirty-eight percent of managers said they cannot afford — in terms of the cost of the exercise and the time it requires — to tackle the new requirements necessary to register with the Securities & Exchange Commission. Another 19% said the regulatory shift is their top concern in 2011.
Private equity professionals also report growing confidence in their assets. For the second consecutive year, the number of respondents who said they anticipate portfolio bankruptcies fell by more than 50 percent.
Still — as BDO’s initial survey showed — that doesn’t necessarily reflect widespread optimism. Most of the respondents BDO interviewed said the frothy market that deal makers enjoyed in 2006-2007 wouldn’t be back in the next 12 months. Also, just 4% of interviewees said they’re increasing their focus on IPOs — compared to 25% that said they’re seeking strategic buyers for assets and 16% that planned to sell assets to other financial sponsors.