The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

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. In the same survey last year 10% of respondents reported that they did not invest in private equity. More than half of those surveyed this year allocate more than 5% of their entire portfolio to the asset class.

With the success of the asset class over the past five years, more private equity firms are joining the party, and the competition is leading to an increase in club deals, in which several GPs join together to buy out a company. In some cases, large GPs are teaming up with sector specialists or local GPs in order to win a bid but the main reason is clearly to spread the risk, and the cost of the due diligence that needs to be performed.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree