Fund managers are expecting to increase their allocations to buyout strategies and growth capital over the next 12 months, according to a survey.
The recent Crestbridge Alternative Managers’ Mood Index (CAMMI) report– an index of the prevailing direction of allocation trends in private equity and real estate – provided insights into anticipated changes in asset allocations, challenges, and opportunities among alternative fund managers in the next 12 months.
Despite economic challenges, the overall CAMMI score across all asset classes dropped to 42.37, an 11.48-point decline from the previous score of 53.85.
Notably, the buyout sector experienced a significant boost, with a remarkable 42.83% increase in its index score (now at 57.14) since March 2023. The researchers attributed this surge to perceived undervalued opportunities in the market.
Growth capital maintained resilience, with an unchanged CAMMI index score of 66.66%. Asset managers continue to find value in growth-stage companies, seemingly less affected by interest rate increases and persistent inflation.
However, other asset classes saw varying degrees of decline in their individual CAMMI scores, indicating a cautious approach by fund managers overall. Despite these challenges, 89% of managers reported positive portfolio performance over the past 12 months. Of these, 33% indicated their portfolio met expectations, 17% exceeded expectations, and 39% partially met expectations. A minority (11%) felt their portfolios fell short of performance expectations during the same period.
Around 40% of CAMMI participants, spanning diverse fund sizes but with a focus on those with over $100 million in AuM, are mainly C-suite and directors, with 80% having their latest funds domiciled in Europe, and engaging in various core strategies,
Alex Di Santo, global head of private equity at Crestbridge, commented, “Despite a general slowdown with fundraising, deal-making and exits, we are still seeing strong activity across the lower-mid market, mid-market and large-cap spaces. Whilst new challenges have emerged given the current macro-economic environment, the general sense is one of positivity in the medium-long term, and private equity is long term.”
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