Chart of the week: Investors not sold on niche managers

Less than a third of investors surveyed for PDI’s annual LP Perspectives study would invest with a niche manager in the next 12 months

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This week the results of Private Debt Investor’s first limited partner survey were published, revealing investor appetites and allocations, and their views on how the private debt market will develop in 2016. The full report is available to download here.

As part of the survey, respondents were asked whether they planned to invest with a niche manager in the next 12 months. The chart above shows how the survey participants answered.

Although 31 percent of respondents stated that they would invest with a niche manager in 2016, meaning that the highest proportion of respondents answered ‘yes’, this left 69 percent that did not answer positively to whether they would invest with a niche manager in the next 12 months.

Conversations with investors revealed that while niche strategies can offer good opportunities for investment, many have a tendency to shy away from such strategies in favour of those where capital can be deployed at a faster rate. Accordingly, 28 percent of respondents told us that they would not invest with a niche manager in 2016, with the majority citing that there are not enough products in the market. A total of 41 percent of those surveyed either had no preference for niche managers or were as yet undecided on their appetite for these managers.