Private Equity Fund Raising Deals

Private Equity Fund Raising Deals

Private equity fund raising is an intimidating (but essential) part of starting up a new investment company. To locate LPs and reach your goal, you must increase the reach of your network. This requires deliberate relationship-management with the right tools and procedures.

For a private equity company, LPs are the investors who invest in your fund using committed capital. These are typically large institutions investors, such as pension funds, endowments, and mutual funds. Other times, they are high-net-worth individuals or family offices that are looking for an increase in their investment in funds for private equity. In addition some LPs are funds-of-funds that have the funds to invest in a variety of private equity funds. They are able to help you create a diversifiable portfolio of alternative investments.

You must meet certain requirements to be a LP. LPs are looking for an investment strategy similar to yours, a track-record with a similar approach and an obligation. They will also want you to have a thorough understanding of how your fund works and be able explain the reasons for investing in.

It’s a great idea to allow your legal team to draft the offering memorandum, as well as partnership agreement before you begin to look for potential LPs. It’s also a good idea to evaluate your internal capabilities for investor relations and consider enlisting the assistance of a placement agent.

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