Investors still committed to private equity

NEW YORK (Reuters) - Investors aren't running from investing in the private equity industry amid the buyout drought, but they're getting more cautious about the funds they're selecting, the president of advisory business StepStone Group LLC said on Wednesday.

Investors have a dilemma between wanting to back people that have made them money in the past and feeling overexposed to mega-buyout funds, said StepStone's Stephen Moseley at the Reuters Hedge Funds and Private Equity summit.

"In a market where some hedge funds have evaporated and most private equity firms acknowledge they won't make the same numbers as before, people are more cautious in their selection," he said.

He added that in a tough market such as this, investors are more keen for advice rather than going it alone. StepStone, founded last year, has $5.8 billion of assets that it manages or advises clients how to allocate, and anticipates that will increase.

The company advises investors such as sovereign wealth funds and pension funds where best to put their dollars in private equity.

(For summit blog: summitnotebook.reuters.com/)

(Reporting by Megan Davies)