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Private Equity Summit Goes Virtual – Allocator Panel

Melanie Gretchen • 29 October 2020
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With no end to working from home in sight, investors are forging ahead with plans to commit capital and network with GPs. During the LP panel of our virtual forum, “Private Equity Summit Goes Viral,” three trends touched upon social, investment and cultural norms going forward.

Covid consequence

From an investment perspective, the outlook was optimistic: When asked about what COVID will look like in reflection, 5 years from now, 43% said, “An idiosyncratic, episodic event that caused everyone to work remotely, but largely did not impact investment processes, allocations, or plan assets”; 22% said, “A systemic event providing more changes to internal processes and large shifts in asset allocations”; and 26% said, “Another step in a ‘New Normal.’”

Digital communication

As reliance on technology becomes widespread, the implications are now apparent. Investors reinforce current relationships, collaborate with other LPs when vetting manager prospects and re-allocate the time that would have been spent traveling to increase time meeting with managers. One public pension fund representative said, “The number of manager meetings is up 90%, almost 100%.” Not everything has gone online, according to one public pension fund: “I think there’s becoming an over-reliance on Zoom. I don’t need a video chat. We can talk on the phone: It’s just as easy.”

Cultural loss

As recently as June, one public pension fund representative estimated that its offices would be closed through the end of the year, and likely through June 30 of 2021. Although prospective opportunities have benefited by manager meetings going up, newer staff members and relationships may lose out due to the presence of historically in-person development opportunities: According to another public pension fund representative, “It’s the togetherness that’s lost.”