State of Private Equity

Below comes compliments of the Deal Journal of the WSJ.

How worried are private-equity-fund managers that their investors might not be able to meet capital calls? Very, if the results of a new survey by Private Equity Analyst are any indication.

The Sources of Capital survey asked fund managers, also known as general partners, to rank how important a variety of characteristics of investors, or limited Partners, are to them. Of respondents, 84.8% listed an ability to meet capital calls as extremely or very important, second only to their desire that investors be long-time participants in the asset class, at 88%."

PE investors (LPs) issue commitments to General Partners when they enter a fund that they will provide capital to their deals as they are originated. The above suggests that the ability of some LPs to meet their obligations is suspect.