SEI Knowledge Partnership


2012 SEI Global Private Equity Report

By SEI Knowledge Partnership

Adjusting to New Realities:  2012 Private Equity Update

Where is the Industry today?

In late 2011, as the U.S. economy looked to recover from the financial crisis of 2007-2008, SEI released a three-part report on private equity, based in part on an extensive survey of 411 institutional investors, consultants and fund managers. The report examined how and why LPs invest, contrasted their perspectives to those of GPs, and explored the challenges faced by GPs in attracting capital and satisfying investors. The report revealed a private equity (PE) sector on the mend but split by a number of disconnects between managers, investors, and the consultants who advise them.

A year later, both the economy and PE continue their gradual recoveries. The rate of acquisitions has held steady for several years and exits are accelerating, although both can be attributed in part to the growth in private-to-private deals. More than $220 billion of new funds was raised globally through the first three quarters of 2012, on par with each of the previous three years.  But a variety of challenges still confront the industry, potentially standing in the way of more robust growth. These challenges were originally identified in our three-part report; because they all still hold considerable sway in the marketplace, we have combined our original research into one report which follows, identifying and elaborating on these challenges:

  1. A surfeit of dry powder
  2. The emerging-markets quandry
  3. Economic uncertainty
  4. Higher taxes ahead
  5. An evolving regulatory environment
  6. Perfomance vs. cost
  7. Who will invest?

How is PE likely to respond to these market pressures?  What does 2013 and beyond look like for PE?  Find out more in our 2012 Private Equity Report:  Adjusting to New Realities.