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What Are Limited Partners Thinking About the Venture Capital Sector?

To understand the effects of the COVID-19 outbreak on the venture capital sector, we recently conducted a survey of limited partners to gauge their sentiment on venture fund investing, plans for 2020 allocations and areas of focus. Within a few days, nearly 100 institutional and non-institutional limited partners responded to the survey.

Some key observations:

  • 72% of the respondents were funds of funds and single-family offices, who happen to be the two most active groups in adding new and emerging venture names.
  • Somewhat surprisingly, allocation into new managers in 2020 is expected to mirror 2019, with the exception of pension funds, which historically have been less active in venture given allocation size requirements.
  • Limited partner liquidity appears strong, as only 3% of institutional and 12% of non-institutional limited partners remarked they would look to transfer commitments or ask for a delayed call. None of the survey respondents said that they were at risk of defaulting.
  • Limited partners seem to be warming to the idea of allocating without an in-person meeting as nearly 60% of both non-institutional and institutional investors said they would allocate without a site visit.

To read the findings of the survey, download the report below. We hope that this helps you form a perspective on industry trends, and we look forward to hearing from you on how this aligns with your observations and strategy.

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