Intralinks polled LPs worldwide to find out what they want from their fund managers, and what their future investment plans are. The findings revealed that allocations to alternatives are on the rise in 2H 2017, which means manager selection is vital in the near term. Here are the key takeaways from the survey, revealing what matters most to investors and areas of concern when it comes to selecting a manager.
LP survey highlights
Alternatives remain vital
Alternatives remain a key component of investors’ portfolios. We found that many LPs have more than a 30% allocation to alternative investments.
Allocations on the rise
Two-thirds of LPs surveyed said that they plan on increasing their allocations to alternatives by between 1% and 10% in 2017, adding an extra US$335 billion, bringing net inflows to $703 billion.
Technology assets most in demand
Trends in areas such as Fintech and Regtech remain favorable. Over 50% of respondents said they wanted their GPs to invest in technology assets.
Transparency a key issue in manager selection
The survey revealed that only one in five LPs are satisfied with fund transparency. However, it is unclear where investors want more transparency. I was surprised to find that only 30% of LPs were asking for standardized ILPA templates, despite the push for “standardization.”
GDPR, Cyber Risk discussions intensifying
A quarter of respondents revealed concern for how their GPs are handling their personally identifiable information and the potential for non-compliance with the General Data Protection Regulation (GDPR). The conversation is heating up; however – surprisingly – 79% of respondents said they had no concern for this topic.
LP communication is vital
A key takeaway of the survey shows that transparency is a big issue for LPs, but more important is how GPs are communicating with them. 86% of respondents said they were pleased with the ability of their managers to respond to ad hoc reporting requests. At the same time, other respondents said that GPs were sending them more communications than they actually needed. Those GPs who strike the right balance in LP communication could gain an edge over their peers when it comes to attracting investors.
Click here to download the full 2017 LP Survey Report.