- Allocation to PE:
- 31% have an allocation to private equity of over 10%.
- 14% have no allocation to private equity.
- 29% had an allocation of 1-5%
- 27% had an allocation of 6-10%
- 51% plan to increase their allocation to private equity in the next 12 months.
- 39% plan to maintain expoure
- 10% plan to decrease exposure
- Outlook on PE returns
- 44% anticipate lower returns for PE going forward
- 39% anticipate returns in line with past returns
- 17% anticipate higher returns
- Current valuations:
- 34% believe PE is overvalued
- 2% undervalued
- 10% in line iwth historical valuations
- 17% not sure
- 37% indicated that it depends on the strategy.
My take-aways from this are that as overall portfolio returns fall, endowments and foundations are considering increasing their exposure to private equity, as this asset class has outperformed other traditional asset classes. They are doing this even with the expectation that PE returns will fall over time.
Link to NEPC press release: