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The Globe and Mail

Investors like private equity, despite its bad reputation

Joel Blit/

Even the people who invest in private equity say its reputation isn't good, but they aren't backing away for that reason.

Only 20 per cent of those who put money in private equity funds say its reputation is good, with the other 90 per cent split between saying its reputation is "bad" and "neutral." And European investors have an even more dismal view, with 1 in 20 saying private equity is seen as a generally good thing, according to the Global Private Equity Barometer report produced by London-based investment firm Coller Capital.

Mostly, investors say that private equity's reputation, while not scintillating, is worse than it deserves, so there's going to be more money flowing into the asset class.

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Are investors shying away for that reason? Not exactly. A significant portion of European private equity investors said that they plan to put more money into the asset class. About a third said they would increase their allocation, while only 5 per cent said they would decrease what they put into private equity.

A bit more than 10 per cent of North American investors said they would funnel more cash to private equity managers, while about 10 per cent plan to reduce. And in Asia, about 20 per cent want to increase, while 20 per cent plan to decrease.

The survey covered 101 investors around the globe.

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