Regulation and fundraising stood out as
the most substantial challenges for private equity fund
managers (general partners, or GPs) worldwide in 2016 and
remain major concerns in 2017, according to research by private
equity fund administrator Augentius.
The annual industry survey found that the
biggest concern for GPs in the Americas and Asia for 2017 was
fundraising, which was a challenge for 58% and 44%
respectively. Fundraising was only the joint-third most
widespread concern in EMEA, for 33% of GPs.
Compared with 2016, the fundraising issue
has however declined in importance in the Americas when it was
a concern of 64%, was stable at 44% in Asia and increased from
25% in EMEA.
The most widespread concern for GPs in
EMEA was market regulation, with 50% reporting it as a
challenge. In the Americas and Asia just 34% and 38%
respectively shared the concern.
Investors in private equity funds, know as
limited partners or LPs, had a different set of
More than half of investors in both 2016
(55%) and for 2017 (56%) saw finding suitable investment
opportunities as a challenge. Augentius raises the query of
whether GPs are offering LPs the investment opportunities that
they actually desire.
The second largest concern for LPs was
"valuation issues" – an increasingly important issue
for managers this year. 26% recorded it as a concern in 2016,
which grew to 46% in 2017, and "one that managers need to pay
attention to", according to Augentius.
Unlike GPs, both market and tax regulation
appears to be of less concern to LPs. In 2016, 44% saw market
regulation as a challenge for the year and this figure dropped
further to 30% for 2017.
By contrast, 46% of investors view
valuation issues as a challenge for 2017, a significant
increase from the 26% last year, prompting Augentius to ask:
"Do managers need to be more open with their investors on
It also raises the question of whether
managers should give more consideration to third-party
Over a third of LPs revealed their
frustration at lack of transparency around fees, with a similar
percentage concerned about the late delivery of manager
With regards to LP’s views on
fund administration, a considerable 62% agreed that fund
administrators deliver good value for money.
While the speed of reporting is the same
as if done "in-house", 60% of LPs do value the independent
There were diverse views on the political
landscape and how events such as Brexit and the US election
will impact activity during 2017 .
60% of GPs from the Americas believe that
2017 will be better than 2016. They are less concerned about
legislation, perhaps in anticipation of new president Donald
Trump and likely changes in North America.
They present the view that Trump may in
fact reduce the level of regulation and create new investment
opportunities, both in smaller companies and
EMEA managers were also positive, with
just over a third predicting that this year will be an
improvement from last.