Insights from investment industry sponsors, investors and service providers
LP and GP Relations in Flux Amid Economic Volatility
2023 Investment Funds Outlook
About this report from Barnes & Thornburg:
After a several-year stretch of record gains and robust capital inflows, private investment funds are now navigating increasingly volatile economic terrain. As has been well publicized, 2022 saw double-digit decreases in asset values across most investment classes, while rising interest rates and developments like the 2023 failure of Silicon Valley Bank have continued to roil markets and unnerve investors.
Barnes & Thornburg’s inaugural Investment Funds Outlook Report draws on insights from across the private funds world to examine these and other topics. The firm heard from sponsors or general partners (GPs), investors or limited partners (LPs), as well as service providers involved with private equity firms, hedge funds, credit institutions and venture capital across a range of industries.
Generally, GPs are more optimistic than LPs about the near-term outlook, but both groups have high confidence that they can work together to achieve key goals.
Here are a few of the firm’s key findings:
- 59% of GPs don’t have succession plans in place
- About half of deals fall through or get interrupted over ESG concerns
- Both groups say realizing returns are their biggest issues
