Investors refuse to back some buyout firms -study

Mon Jan 17, 2011 7:01pm EST
LONDON Jan 18 (Reuters) - Investors are refusing to
reinvest with private equity firms they previously backed, as
they look to reshape their portfolios and weed out
underperforming groups, a new study found.

Some 91 percent of the European investors surveyed have
refused to reinvest with managers they previously backed over
the past 12 months, up from 63 percent in the winter of 2008-09,
when it was last measured, said private equity firm Coller
Capital in its Global Private Equity Barometer.

Investors in the Asia-Pacific region were also more
selective. Some 70 pct have declined to invest with firms again,
compared with 52 percent in 2008-2009.

"A lot of investors' portfolios were shaped for a world that
has changed very significantly since the bubble," said Coller
chief investment officer Jeremy Coller in a telephone interview.
"There will be performance issues as well. What people have
discovered is which (firms) are really skilled," Coller said.

While some private equity firms with good track records are
raising more money quickly, mediocre performers are finding the
process difficult and slow and some are likely to struggle to
raise any capital in the future.

U.S. investors have more experience of investing in private
equity and have been more consistent in not reinvesting. Some 84
percent refused to back new funds in the last 12 months, the
study found.
(Reporting by Simon Meads; Editing by Jane Merriman)
Source: Reuters.Com