Launching a fund in Europe
Alex Di SantoHead of Private Equity, Europe
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The case for raising a first-time fund is strong; with statistics showing that “first time” or “emerging” fund managers can outperform larger, well established fund managers.
A very focused and niche investment strategy facilitates the often-seen strong performance of emerging managers but there are other less obvious factors at play. Smaller managers may invest a significant portion of their net worth and distribute carry more widely in what is generally a smaller team which can result in a highly motivated management team driving the business.
There are multiple reasons a group of private equity professionals might want to raise their own fund; for example control and ownership, a personal interest in the strategy, a new market opportunity.
We’ve also seen instances where limited partner appetite for a particular strategy has driven private equity professionals to raise their own fund backed by said investor.
So the case for first time funds is strong but taking the leap and setting up a fund requires significant time, energy and investment; as well as a significant amount of support from advisors. In this guide we seek to set out some key considerations for emerging fund managers seeking to establish their first fund.
I hope you find the guide useful.
For the purposes of this guide we are focused on three types of fund manager:
01 / Deal by Deal StructureExperienced private equity professionals coming together to build a track record by raising a single asset investment structure.
02 / First Institutional FundExperienced private equity professionals coming together to raise their first institutional fund.
03 / Spin-outsA private equity team spinning out of their current firm.
