Rasmus: Hello again, Mike. Let’s dive right into our next topic. Did you know that more than 90% of the capital going into private equity comes from institutional investors (LPs)?
Mike: Hi Rasmus, yeah that sounds about right. Institutional investors are focused on investing large amounts of capital with an extended time-horizon, so the asset class makes a lot of sense for them. One interesting point here – there is a major misconception in the general public that private equity and venture capital managers are investing their own money, and that they are getting rich off the efforts of others. That is true only to a very limited extent. Most of the money comes from these institutional investors.
Rasmus: How would you break down the various institutional investor groups?