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Finding the Key: Canadian Institutional Investors and Private Equity

Appendix IV: Institutions and Private Equity, International Data

Section 3 made Canada–U.S. comparisons vis-à-vis institutional activity in private equity. Comparative analysis was based on data assembled from a variety of surveys conducted on a regular basis in North America.

Data used in Section 3 were selected according to their relative compatibility. Greenwich Associates' data rely on a unified survey methodology for comparing the actual private equity allocations of both Canadian and American institutions. Goldman, Sachs-Russell data rely on a similarly unified North American survey methodology when comparing allocation targets (and other data measures) since 1995.

Data are also compatible in Canada–U.S. comparisons of new, annual commitments that institutions have made to private equity funds since 1996. Methodologies deployed by Macdonald & Associates and Thomson Venture Economics are comparable and differences accounted for where these exist. In Figure VI, venture capital was chosen as a proxy for all private equity activity, given the particular richness of such information.

For the purposes of Finding the Key, data were also collected from other jurisdictions, including the United Kingdom, Europe and Australia. Because of major national differences in retirement systems, types of institutions and the orientation of private equity industries — as well as methodologies for describing these components — data sets in one jurisdiction are not necessarily compatible with data sets in another. This fact makes comparing data from outside of North America daunting. Indeed, such international comparisons can be highly misleading.

Along with the problem of national differences in key data sets, some private equity market structures lack transparency. In addition, market data provided by non-North American sources can be difficult to ascertain. As verification of data content and quality is critical to making comparisons of any kind, it was decided to exclude non-North American data from analyses contained in Section 3.

However, this appendix presents some of the other data collected for the report. Figure A highlights recent annual trends in new commitments to venture capital and other types of private equity made by institutions in the United Kingdom and Europe. Figure B shows recent private equity allocation targets of institutions in the UK, continental Europe and Australia.

FIGURE A
Institutional Fund Allocations (Targeted) to Private Equity U.K., Continental Europe and Australia, 1999 and 2003*

* The 2003 Goldman, Sachs-Russell survey does not breakdown the allocations data for the U.K., Continental Europe and Australia by institutional type.

FIGURE B: New Institutional Commitments to Venture Capital and Buy -out LPs* Europe and the United Kingdom, 1996–2002

* Includes available data for corporate and public sector pension funds, endowments/foundations, insurance companies and funds-of-funds.

** Europe data includes the U.K. data.

Source: Macdonald & Associates, Ltd. Thomson Venture Economics, 2003

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