Edelman Smithfield presents the findings of its 2024 LP Survey on Private Capital
The survey reveals insights from 405 global LPs on how the reputation of GPs affects allocation decisions. LPs were consulted on matters ranging from leadership, to ESG, use of AI and how GPs show up on social media. Key findings include:
- Almost half of LPs (46%) view a good reputation of a GP as even more important than their investment returns
- The vast majority of LPs (98%) search the social media profiles of firms and individuals prior to making allocation decisions
- LPs want to see GPs adopt the use of AI, but only in certain circumstances
- The current trends of GPs going public, or launching private wealth products, will be a cause of concern for LPs if not managed carefully.
What this means for GPs
Reputation is a critical issue in fundraising
Understand how ‘soft’ factors outside of performance play a key role in how LPs determine which funds to allocate to. Matters such as reputation, high quality leadership and clear succession all need to be carefully managed and explained to investors.
Social media is part of the diligence process for LPs
The overwhelming majority of LPs use social media to assess firms and individuals, prior to making allocation decisions. Your social media content needs to reflect the best of your firm at every level.
ESG priorities are splintering into separate issues
LPs are beginning to turn away from using ‘ESG’ as the badge that reflects all of their expectations for responsible investment. Instead, focus is growing on individual issues, particularly in the social category
The IPO and private wealth trends are a cause for concern for LPs
Current trends within the industry of private capital firms going public and launching private wealth products are a cause of concern for LPs, as they believe returns will be compromised.
SuperReturn 2024 – Our view on private capital’s biggest meeting
Insight Piece
The conference was attended by over 5000 private market professionals from over 70 countries. Throughout the event, top General Partners (GPs) recognized the critical importance of their reputation and actively engaged with both investors and the global media. Explore the top key takeaways and insights from the event here
HERE ARE THE TOP TAKEAWAYSInsights
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