March 24, 2020
Private equity partners Mike Akkawi and Guy Berman spoke with Benefits Canada about some of the pertinent findings relevant to pensions funds to come out of Torys’ inaugural private equity sentiment survey, PE Pulse.
The article highlights the finding from PE Pulse that says 79% of pension fund and private equity professionals expect their passive private equity allocations to either stay the same or increase in 2020.
“Pension funds, in particular, cited competition for new investment opportunities (65%) and pressure from limited partners to provide co-investment opportunities (57%) as areas where the greatest increases are expected to occur,” the article continues.
“Indeed, pension funds are very focused on co-investment opportunities, with 90% identifying them as “a significant pressure point”—one that’s illustrative of a shift in the co-investment landscape.”
Mike said there is now a slight shift in that co-investment landscape from what was seen a decade ago.
“Ten years ago, private equity firms would reach out for capital when required,” Mike said.
“But now pension funds are making their desire for co-investment opportunities clear with their sponsor relations from the outset.”
Guy spoke to the finding that pension fund professionals appeared to be more concerned about geopolitical risk compared to their private equity counterparts, with 21% of pension fund professionals naming it as their primary concern compared, compared with just 3% of private equity professionals.
“Most mid-market private equity funds are focused on North America, Canada or a particular region, so geopolitical risk isn’t going to be a concern for funds invested in a stable region, like North America,” Guy told the publication.
“It's a different story for pension funds, who tend to invest globally.”
You can read more of Mike and Guy’s comments in the Benefits Canada article.
PE Pulse canvassed the opinion of more than 100 Canadian private equity and pension fund leaders to garner their thoughts and insights on the state of private equity in our first annual industry survey.
You can also hear Mike and Guy discuss some of the findings in their episode of Torys in 10, "Private equity in 2020: What are industry leaders saying?"