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Video: LP fundraising advice for GPs

Adapting to digital due diligence

Members of the private markets teams from Aberdeen Standard Investments and APG Asset Management recently joined eVestment Private Markets for a discussion about how their due diligence processes have changed in the last few months, and the challenges and opportunities the crisis has presented.

In the final section of the discussion, we asked them about what advice they would give to fund managers who are fundraising or who are preparing to fundraise in the current environment.

Watch their responses below in this 4 minute clip.

Click here to watch the full conversation.

Takeaways

Have a good handle on your existing LP Base

  • Knowing how much you can realistically raise from existing investors will help you understand what your fund target and cap will be and in turn how much you need to raise from new investors
  • New relationships take time and will take even more time in the current climate
  • Meetings and premarketing before you’re in full fundraising mode is a must to help build a pipeline of new investors
  • “It’s better to have meetings when you’re not asking for money”

Be absolutely clear on what your pitch is

  • Know your point of difference before you start to go out to the market
  • Placement agents can help articulate this to the market and point you to LPs looking for new opportunities

Momentum is key

  • Make sure that when you move into your official fundraising, you are confident you can hit your target fund size
  • Funds that are in the market fundraising for 6 months or more can attract more scrutiny or “negative noise” around their perceived inability to raise
  • A deal-by-deal arrangement can be a way to demonstrate the fund’s strategy and act as a proof of concept for potential investors

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