Has the heyday of private equity investing come and gone?  A newly released survey by Mergermarket, a data provider to the mergers and acquisition market, certainly suggests that this may be the case.  According to the survey, institutional investors and limited partners alike are now more likely to invest directly in the companies that interest them.  As a result, private equity firms are increasingly being bypassed.

Several factors are contributing to a loss of confidence in the private equity route.  Foremost among them are concerns about information transparency.  Another key reason offered by respondents in the survey was strictly financial; limited partners in particular were likely to seek out investment methods that would result in lower fees.  In the long run, such lower fees can be translated into higher returns. 

Concerns about timely reporting were also guiding firms away from private equity companies, as was the difficulty in valuing private equity investments. 

The survey included investors from both Western Europe and North America.  100 investors were polled in all, and these included a diverse range.  Respondents included organisations such as pension funds, fund of funds, and sovereign wealth investors.

An interesting quirk to the survey involved perception: a majority of businesses polled revealed that they felt optimistic about the future of private equity firms despite the concerns cited.  A full third of the businesses polled, however, revealed that they had no intentions at present of upping their current allocations to private equity.

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