Study: institutions happy with PE returns

A report by JP Morgan Fleming Asset Management says that 66 per cent of institutional investors in private equity believe the asset class has met or exceeded expectations.

Institutional investors find they are getting a good deal out of their alternative investments, according to a report published by JP Morgan Fleming Asset Management.


The report, which solicited the view of 171 UK investors and a total of 341 institutional investors across the UK and Europe, found that 66 per cent of those invested in private equity believed the asset class had met or exceeded their expectations.


The approval rating for hedge funds was even higher, weighing in at 79 per cent.


However, private equity was also the asset class that met with the greatest disapproval rating, with 34 per cent stating that they felt returns had not met expectations.


Nonetheless, just under half (45 per cent) of those surveyed said they wanted to increase their allocation to private equity. 56 per cent said they wanted to do likewise for their hedge fund allocation.


One per cent of institutions with hedge fund exposure and nine per cent of those with private equity exposure said they actively planned to reduce their commitment to alternative asset classes.


Overall, the level of investment in private equity and hedge funds remains low, the report found. JP Morgan Fleming said the average level of assets allocated to private equity among those with an allocation to the asset class was currently 3.3 per cent. The level for hedge funds was found to be even lower, at 2.5 per cent. More than one in every three investors with no allocation to private equity cited a lack of liquidity as the principal reason for avoiding the asset class.