GPs Share Strategies for Fundraising in a Selective Market

Reporting: Aaron Weitzman GPs gathered to discuss fundraising strategies earlier this week at a panel at McDermott’s HPE Miami conference, amid the backdrop of LPs becoming increasingly selective with investments. One panelist emphasized the importance of early engagement with LPs to circumvent long fundraising timelines, which he said have extended to 24 months in some cases. “I always tell my [GP] clients to engage with as many LPs as [they] can and try to get them on the same timeline,” he said. “I think us GPs face concerns about LP capital concentration and the need to demonstrate real value add,” said one GP at a large specialist firm. Particularly for new fund managers, having the backing of former colleagues can also help to secure LP capital, another panelist said. “If your former boss is taking a bet personally on what you’re doing, that speaks a lot to your abilities as an entrepreneur,” he said, adding that this is particularly important for GPs trying to differentiate themselves from other first-time funds. With LPs increasingly prioritizing not only liquidity but transparency and proactive communication, panelists said sponsors need to take extra steps to put investors at ease when “key people” leave the[...]