Seventy-seven percent of private equity firm predict there will be more attractive investment opportunities in 2012 than in 2011, according to a new survey by Rothstein Kass.

Despite continued economic uncertainty, only one-third of the 293 private equity managers polled predicted that funds would be compelled to return capital due to a lack of suitable investment opportunities. At the same time, over a quarter of the survey respondents indicated they do not plan to actively raise capital in 2012, though most believe that the U.S. will avoid a double-dip recession.

“Our latest research suggests that the waiting game involving private equity firms seeking attractively priced growth companies and entrepreneurial businesses in need of capital will likely persist,” said Tom Angell, principal-in-charge of the Rothstein Kass Private Equity Practice. “The fundamental issue is that there often remain significant disparities between what buyers are willing to pay and how business owners value the enterprise. As a result, we have also seen the continuation of several trends that had started to emerge even before the credit market upheaval. Specifically, there remains an inordinate amount of dry powder on the sidelines, while firms continued to take on more active roles at portfolio companies as they develop longer-term exit strategies that unlock latent value.”

For the study, firms with less than $500 million under management were categorized as “small” (59.4 percent), while those reporting more than $5 billion under management were “large” (18.1 percent). Over 81 percent of firms are located in the U.S., with 10.2 percent in Europe, 4.9 percent in Asia and 3.6 percent in Middle East/Africa and South America.

The study found that emerging private equity firms are in short supply in the U.S. Only 33.6 percent of the funds polled are in operation for less than five years. European and Asian private equity firms were more likely to have seen start-up efforts in the last five years.  More than 9 percent of firms launched in the last five years have 50 percent or more women or minority ownership.

Nearly two-thirds of the firms surveyed believe there will be more exit opportunities for portfolio holdings in 2012, but this is highly dependent on location, with responses in the U.S. (70 percent), Asia (67 percent) and Europe (39 percent) varying. Seventy-one percent of firms polled disagree with the belief that the United States will enter a double-dip recession.

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