Edelman Smithfield presents the findings of its 2023 LP Survey on Private Equity

The survey reveals insights from approximately 500 global LPs on their allocation and investment plans, perception of PE, and how effectively GPs are communicating their strategy and capabilities in areas such as ESG.

The research shows that, while investors want to continue to commit to PE, there are some concerns around the asset class that, if left unaddressed, will affect GPs’ ability to fundraise and operate.
GPs should double-down on brand building, showcase the quality of their leadership team, highlight how their strategy fits the current economic environment, and demonstrate how their ESG practices are embedded throughout their firms.
PE firms must also continue to use social media as an integral part of their LP communications.

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Top 6 Findings

LPs Continue to Evolve Their Expectations of PE

Reputational Premium

Reputation commands a premium. Nearly 40% of LPs say reputation is more important than investment returns when deciding which PE firm to commit capital to.

ESG Demands

Despite ESG backlash, LPs are still holding GPs to increasingly high standards. 60% say that ESG-linked financial incentives for investment teams are very or extremely important when deciding where to allocate capital.

Concerns Around Strategy

1 in 5 LPs think the GPs they have invested in have not effectively communicated that they have the right strategy to generate adequate returns in an economic downturn

Social Media

LPs rely heavily on social media to evaluate PE firms and personnel. 94% of LPs say that social media profiles of key PE firm personnel are important to informing their decision to invest in a fund.

The 2023 Edelman Smithfield LP Survey on Private Equity—which canvassed the views of nearly 500 LPs across Asia Pacific, Europe, the Middle East, and North America—provides rich insight into what LPs are seeking and how the industry can develop an all-weather communication strategy.

Here are the Top Takeaways