Private Equity: Private equity houses need to find an alternative to club deals

Institutional investors might reduce private equity investments because of the growing number of club deals.

Endowments and pension funds are becoming increasingly concerned about the concentration of their private equity portfolios because of the large number of club deals, say participants in the industry. As a result, private equity general partners (GPs) are being forced to look for alternative means of financing.

Private equity has become an integral part of institutional investors’ allocation to alternative investments. A recent survey of institutions by State Street Corporation revealed that all respondents had an allocation to private equity.

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