See the Largest Allocators to Private Equity
Increasingly, sovereign funds and pensions have allocated more capital toward private market investments in the past decade. Some driving forces include prospects for higher risk-adjusted returns, reduced volatility and diversification. Who has the most allocated to private equity?
SWFI staff compiled a global ranking of the biggest private equity allocators. This list is comprised of sovereign wealth funds and public pension institutional investors. This is not just a ranking of cash-heavy institutional investors allocating to private equity funds. This ranking includes direct investments, co-investments, separate accounts and secondary investments. Furthermore, this ranking leaves out private real estate and infrastructure allocations.
Private Equity Investor Composition
Notably, a number of sovereign wealth funds such as the Qatar Investment Authority (QIA) dominate the top ten of the list ranked. Many of these funds are strategic development sovereign wealth funds (SDSWF). Also two Canadian pension funds made the top 10 of the list ranked. A number of U.S. public pensions made the top 25 of the listed ranked such as the Ohio Public Employees’ Retirement System (OPERS). Investor appetite for private market investments remain robust as many institutional investors continue to commit capital to private equity funds, while expanding internal co-investment capabilities. A number of wealth funds and pensions have created partnership or networking officers to facilitate deal flow.
Another worth mentioning trend is the greater usage of separate accounts and the scaling back on the number of private equity general partner relationships. Pensions such as Teachers’ Retirement System of Texas (TRS) are familiar with co-investments and partnering with firms such as the Blackstone Group. These options are attractive for limited partners due to lower fees, enhance transparency and price discovery and greater liquidity. The concept of few means more is gaining traction with the larger asset owners (public funds with over US$ 50 billion in assets).
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