The biggest challenge facing private equity fund managers in 2016 is pricing for investment opportunities, according to the 2016 Preqin Global Private Equity and Venture Capital Report.
Says Christopher Elvin, head of private equity products at Preqin: “Rising valuations, and the impact they may have on returns, are clearly at the forefront of the minds of many fund managers going into 2016. Strong fundraising over recent years means that managers currently have a large amount of dry powder available to be deployed into private equity assets. With strong competition for assets, particularly in the developed markets of North America and Europe, valuations look set to continue to be a concern through the year ahead.
Outside the developed markets of Europe and North America, there is concern among managers that fundraising will present a challenge in 2016. Competition for investment opportunities may be less fierce, but with ongoing volatility in many Asian markets and perceived weakness in many emerging economies, fund managers focused on these regions will have to find innovative ways to attract investors.”