Buyouts Insider & Gen II Fund Services Publish Groundbreaking Private Equity Emerging Manager Survey

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Inaugural survey gauges key metrics for newly forming firms and investors.

"We are pleased to partner with Gen II Fund Services on this long term project as we seek to continue to understand the driving factors behind the LP decision to invest with a new manager."

Buyouts Insider, in partnership with Gen II Fund Services, LLC, released today the inaugural Private Equity Emerging Manager Survey, reviewing important factors that new general partners need to consider when launching their funds, and key areas of focus for limited partners that invest with emerging managers. The survey was released in conjunction with the Buyouts Insider Emerging Manager Connect East conference, held in New York today.

Primary among the findings was the importance of the experience and makeup of the team in addition to a general partner’s track record. The survey revealed 35 important data points, which include:

  • Ninety percent of investors considering emerging managers rate “composition of team” as an extremely or very important factor in making their investment decisions
  • Composition of team was rated as more important overall by limited partners compared to a team’s track record
  • Co-investment opportunities were less important to limited partners than anticipated, despite nearly 60% of emerging managers offering them

Start-up private equity and venture capital firms—often referred to as emerging managers—would be well served emphasizing the quality of their teams when soliciting money from institutional investors. Limited partners with an appetite for emerging managers rated “composition of team” as more important than both “investment strategy” and “track record” when it comes to evaluating emerging manager funds, according to the survey. All told, nine in 10 investors indicated that “composition of “team” is either an extremely or very important factor in the investment strategy, compared with 85 percent for “investment strategy” and 73 percent for “track record.” Investors were asked to rate the importance of seven factors altogether.

The GP-focused portion of the survey asked respondents how important they thought the same seven factors would be to investors in evaluating their funds. General partners appear to be aligned with investors in these areas. Approximately 90% of emerging managers anticipated that “composition of team” would be an either extremely or very important factor for limited partners evaluating their funds. That compares with approximately 80% who indicated “investment strategy” and “track record” would be either extremely or very important factors.

David Toll, Executive Editor of Buyouts Insider, commented, “The inaugural Emerging Manager survey brought together in a comprehensive report many of the topics we have visited in our Emerging Manager Connect events over the past 18 months. We are pleased to partner with Gen II Fund Services on this long term project as we seek to continue to understand the driving factors behind the LP decision to invest with a new manager.”

Altogether Buyouts Insider, in partnership with Gen II Fund Services, LLC, surveyed more than 100 emerging managers this spring to learn more about their experiences on the fundraising trail. Buyouts Insider and Gen II also surveyed more than 40 institutional investors that have an appetite for emerging managers. Questions focused on the factors deemed most important to emerging managers and limited partners, including team, track record, length of time taken to raise a fund, co-investment opportunities, and the importance of the service provider community in supporting the emerging manager process.

“Emerging Managers urgently seek a roadmap to success for their firms and funds,” noted Jeff Gendel, Managing Director at Gen II Fund Services, LLC. “We believe this survey will serve as a primary source for all emerging managers embarking upon the new firm and fund formation process. We are delighted to work with the Buyouts Insider team on this survey and look forward to discussing the results with the private equity community over the coming year.”

Download the complete survey at http://pages.argosy.group/EMSurvey_WP/

Notes to Editors

About Buyouts Insider https://www.pehub.com/
Buyouts Insider is the leading provider of news, data and conferences to private equity professionals, venture capitalists, and their institutional backers. Its flagship online information services include Buyouts, VCJ and The PE Hub Network. Its networking events, held in major financial centers around the country, include PartnerConnect, Emerging Manager Connect and Family Office Connect.

About Gen II Fund Services, LLC http://www.gen2fund.com/
Gen II Fund Services, LLC, is the largest independent private equity fund administrator, covering over $150B of private capital and reporting to over 9,000 LPs on behalf of our clients. Gen II has helped over 40 emerging managers successfully launch their firms and funds.

Gen II offers private fund sponsors the best-in-class combination of people, process and technology, enabling GPs to most effectively manage their operational infrastructure, financial reporting and investor communications. The Gen II team is the most experienced and longest tenured team in the private equity fund administration industry, with broad product expertise across buyout, infrastructure, energy, credit, real estate, co-investment, hybrid funds, funds of funds, feeder funds, venture capital, and managed accounts.

About the Survey
The Emerging Manager Survey, published by Buyouts Insider in partnership with Gen II Fund Services, LLC, is the private equity industry’s primary source for PE/VC emerging managers and institutional investors with an appetite to back them. More than 100 emerging managers and more than 40 institutional investors completed detailed surveys this spring. The results are released at the Emerging Manager Connect Survey in New York in July 2017, and will be discussed at forthcoming Buyouts Insider events throughout the year.

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Suzanne Thomas
Buyouts Insider
+1 (800) 455-5844 Ext: 4063
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David Toll
Buyouts Insider
(800) 455-5844 4036
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