Fund raising for private equity funds is particularly challenging for managers that are seeking a significant step-up in AUM, particularly so for those that are regarded as emerging. Due to the long-term commitment of such funds, allocators heavily scrutinize prospective managers. Fund raising for private equity funds involves clearing numerous hurdles to achieve success. Due diligence processes can extend through the life of a fund before investing for the first time, with detailed dissection of the principals’ direct experience in sourcing and managing deals (with applicable references, e.g. CEO’s, CFO’s). This can be potentially problematic for smaller managers, since many times they aren’t the lead investor and allocators will need to be convinced that their roles haven’t been secondary.
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