Limited Partnerships Pursue Venture Capital and Growth Equity Investments Amongst Record Venture Capital Business Deals

Institutional investors are prepared and eager to make more investments in private markets at this stage of the pandemic, notably in venture capital and growth equity investments. Among venture capital, cumulative transaction value hit $126 billion in the first quarter of 2021, surpassing the previous quarterly record of $87 billion established in the second quarter of 2018 — a dominance attributed to high-exit profits reinvestment.

Studies show that 58% of limited partners had already selected fund managers with whom they want to re-up, but are still looking for new alternatives. This development was consistent with sentiments in September 2020. When asked how the rising public-market assessment of their private-market investment views has been affected, over half of the participants said they now see private markets more appealing.

One of the most important aspects of venture capital investments is betting on the right jockey. For example, Capital Q Ventures has very strict criteria when it comes to choosing our venture partners. Every one of our hand-picked partners is a specialist in their field, consistently provides superior returns, and demonstrates high quality character, among other things. Because our partners are responsible for sourcing deals, we found that these qualities are some of what makes a great partner.

Investors are increasingly favoring buyouts, growth equity, and venture capital over other private asset classes, as per the latest survey. Venture capital has seen a significant rise in LP interest, with 61% seeking further investments, up from 41% seven months earlier. Growth equities also garnered attention, with 54% of respondents planning to raise their allocations to the asset class. The spike in interest in venture capital and growth equity is partly a reaction to an increasingly packed buyout market. When demand for buyout funds is strong, investors go to venture capital and growth equity to deploy money and achieve alpha.

The reason why investors are seeking opportunities in the private market is simple. They recognize a need to deploy money into non-correlated asset classes, the importance of institutional accessibility, and the ability to achieve superior returns that keep up with inflation. Capital Q Ventures is dedicated to serving our investors and our partners well, and we believe that we are uniquely positioned in the market to do just that.

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