UK report shows more GP optimism

A survey of 120 UK fund managers found that over a third of respondents expect their next fund to be bigger than their current one. Portfolio management, new investments and exits are the biggest priorities for GPs over the next year.

A recent survey of fund managers in the UK showed that a large majority of GPs expect to receive carried interest from their current funds, and over a third (37 percent) expect that their next fund will be bigger than their current one.

The optimism shown in the results of the study, conducted by Investec Private Equity and Partner Finance, extended to the economy as a whole, with 80 percent saying they expected conditions to improve or remain the same over the next year. Investec surveyed 120 senior private equity professionals for its report. Of the respondents, 17 percent manage more than £1 billion in assets.

Among the report’s other findings, 43 percent of British GPs expect their next fund to be the same size and only 6 percent expect it to be smaller, although 11 percent said they didn not expect to raise another fund. Nearly 80 percent of British GPs still believe that carried interest represents their main opportunity for personal wealth creation. Meanwhile, good portfolio management, new investments and exits were rated as the biggest priorities for managers over the next 12 months, while restructurings and refinancing were seen as the lowest.

“LPs and employees of portfolio companies should find this research very encouraging , since the professionals who manage the investments are both optimistic about the companies they have backed and have prioritised the need to work with them closely over seeking out new opportunities,” Simon Hamilton, an adviser at Investec, said in a statement.

The report’s optimist outlook largely mirrored the findings of a Grant Thornton survey released in July which found a majority of private equity professionals expected deal activity to pick up over the course of the year.