Family offices in Asia gloomy about their private equity portfolios
Nearly half of family offices in Asia expect their private equity and venture capital portfolios to perform poorly this year — even worse than during the 2022 downturn, according to a survey by Preqin. But they’re bullish about private debt and hedge funds.
About 46% of family office respondents said their private equity exposure will perform worse, and 48% expect their venture capital exposure to perform worse — due to write-downs, slowing growth and higher interest rates. Overall, with private equity funds declining by 9% on average through the first three quarters of 2022, it has been the worst-performing year for the asset class since 2008.
“Family offices expect a further correction as they view private equity as overvalued, given the gap between public and private equity valuations,” the report said.
Even so, over a third of family offices surveyed expect their private equity portfolios to perform better in the next 12 months. Only 21% of them plan to reduce their exposure to the asset class, compared with 31% who plan to reduce their holdings in venture capital.
They’re most optimistic about private debt, with 64% expecting the asset class to perform better this year. And 57% expect hedge funds to deliver better returns over the next 12 months, with 54% of them seeking to increase their exposure to the class.