Investors are hot on private equity funds and getting hotter, while their enthusiasm for hedge funds has cooled somewhat, according to a poll by Coller Capital. The New York-based investment firm found that 44% of limited partners surveyed plan to increase their allocations to private equity, up from 30% just six months ago, while only 30% expect to put more money into hedge funds, down from 37% in July. The survey also found that they are working more aggressively to find winning strategies, with 56% now saying they would not “re-up” with their current managers, a nine point increase from a poll six months ago.
Meanwhile, Thomas Lee said at a conference yesterday that private equity funds are benefiting from the growing presence of hedge funds in traditional p.e. territory. The founder of Thomas H. Lee Partners, who is expected to leave the firm within the next couple weeks, predicts there will be “more hedge funds and private equity firms working together.” He noted, “Not only do hedge funds supply money to companies, but activist hedge funds tee-up companies for private equity.”