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

“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…

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