Launching a new private equity firm is no easy task in any environment, and even more so in a pandemic. Here are the key findings every emerging manager should know from the Buyouts Emerging Manager Survey conducted in partnership with Gen II Fund Services, LLC.
NEW YORK, Oct. 3, 2022 /PRNewswire-PRWeb/ -- Buyouts, in partnership with Gen II Fund Services, LLC, today released the sixth annual Emerging Manager Report, highlighting important factors that new general partners need to consider when launching their funds, and key areas of focus for limited partners considering investing with emerging managers.
The report compiles survey results from both emerging managers and LPs, gauging their views on fundraising, fund terms, co-investment opportunities and the due diligence process, as well as the defining characteristics that attract investors to emerging managers.
Among the areas explored by the survey:
- Fundraising timelines – from initial to both first and final closes
- Sourcing LP capital – where did the commitments come from?
- Hiring trends among emerging managers
- Importance of team composition versus track record from the LP perspective
- Anchor investor considerations
Key takeaways from this year's survey include:
- Investors are most likely to invest in emerging managers to pursue superior returns compared to established managers, with over half of respondents agreeing that the risk/return profile for emerging managers versus established managers is attractive
- 76% of LPs will back a debut PE/VC fund. This number rises to 90% with a manager's second fund
- A fifth of LPs anticipate increasing their allocation to emerging managers over the next year, and a third plan to increase their allocation over the next three years
- For firms that are fundraising, the fund target is higher than last year. Just 5% of fund targets were higher than $500m in 2021; this year, over 20% of fund targets surpass $500m, and almost half exceed $250m
- A looming recession , high inflation, and stock market volatility were indicated as the most likely factors to impact performance over the next year
Overall, the survey covered more than 60 data points. The Private Equity Emerging Manager Report can be downloaded at: http://www.buyoutsinsider.com/emerging-manager-report-2022-download/.
"Now in its sixth year, this survey has become a must-read and the bellwether to gauge LP sentiment about emerging managers," said Jeff Gendel, Principal at Gen II Fund Services. "While uncertain economic and marketplace conditions translate into a more competitive and slower fundraising environment, LPs remain positive about investing with emerging managers and agree that the risk/return profile for emerging managers versus established managers is attractive. As a fund administration market leader, Gen II looks forward to enabling the launch of the industry's premier emerging managers and supporting their success. We are grateful for the confidence placed in Gen II by more than 100 emerging managers, and the thousands of LPs committed to investing with them. We also thank the Buyouts editorial staff for all their efforts in this year's survey."
Graeme Kerr, Head of Special Projects at Private Equity International, said, "Despite the challenging times, over half of investors believe the risk/return profile for emerging managers is attractive. As with previous editions, this year's data will serve as a benchmark on the status of the emerging manager market. We are fortunate to be able to produce this report in partnership with Gen II Fund Services LLC."
Notes to Editors:
About Buyouts https://www.buyoutsinsider.com/
Today, Buyouts is the leading authority in North American private equity intelligence, data and trend analysis. Buyouts' award-winning editorial and research teams have sources deeply rooted in the private equity market to provide exclusive insight on fundraising, capital sources, LP allocation strategies, investment performance data and LP/GP profiles.
About Gen II Fund Services, LLC http://www.gen2fund.com/
Gen II is a leading fund administration provider focused entirely on serving private capital asset managers and investors. Since its inception in 2009, the company has become one of the largest independent private capital fund administrators, with more than $900 billion of private fund capital under administration. Gen II offers private fund sponsors a best-in-class combination of people, processes, and technology, enabling GPs to manage their operational infrastructure, financial reporting, and investor communications most effectively.
About the Report
The Emerging Manager Report, published by Buyouts 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. A total of 127 emerging managers and 58 institutional investors with a self-identified appetite for emerging managers were surveyed. The results are released annually.
Media Contact
Graeme Kerr, PEI Media, LLC, 44 20-3862-7491, [email protected]
Jeff Gendel, Gen II Fund Services, LLC, 212-408-0501, [email protected]
SOURCE Buyouts
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