As a surprisingly high number of newcomers reach successful fund closes despite continued turbulence in the fundraising market, Warren Hibbert of Asante Capital explains how maiden vehicles are finding success where many well-established players are falling by the wayside.
According to Hibbert, founding and managing partner of placement agent Asante, to explain the speed in which first-time funds are raising when compared to long-standing brand names, the fundraising market must be looked at from a broader context. "There's no automatic fundraising. And the market is bifurcated; there are smaller managers with high performance who are raising very quickly, and at the larger end of the market the bigger players who are raising at target or above target but are taking a lot longer."
Hibbert believes the pace at which the two types of funds are raising capital is a case of how much planning and thought has gone into the fundraising process.
"Then there are the funds in between these two groups, which some might label as zombie funds. Those funds without any differentiation that are struggling to stand out from the crowd, or those that are doing something completely different and haven't been able to find the right LPs to back them." Hibbert goes on to say that some of these funds might manage to raise somewhere close to their target, or not at all.
Hibbert emphasises that the common factor in whether the small, large or middle-of-the-road funds raise at all, is in their ability to reach a first close. "A first close effectively means you're in business; that you have enough cash to put together some form of diversified portfolio."
Hibbert also discuss the types of investors that are willing to back first-time funds and the main challenges impacting the fundraising market today.
Your comment will be moderated before publication.
Vehicle will allow public to gain exposure to Apax PE funds
22 May 2015 |
Mid-cap LBO valuations back to late-2013 levels, analysis reveals
20 May 2015 |
More from unquote
Date: 05 Nov 2015
Location: Milan, Italy
Updating your subscription status
Chris Baker and Gareth O'Donovan join LDC's southern team