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Where to next for emerging private equity managers?

by Andrés Ramos, Content Marketing Specialist – eVestment Private Markets

In what has been a bewildering, enigmatic, and difficult year, “Where to next?” will be the question on the minds of many emerging private equity managers as we move into 2021.

While the year was full of countless challenges for everyone, in terms of fundraising in the private markets, 2020 could be described by some GPs as, “pretty good.”

Despite the market volatility caused by the pandemic, through the first three quarters of 2020 reported commitments from pension plan LPs to private equity funds topped $59.8 billion. This figure represents a 16.5% increase from the figures seen through the same period in 2019. Private debt funds saw total reported commitments rise 10.6% over the same period. All this is according to data sourced from eVestment’s Market Lens platform

LPs aren’t making the same mistakes.

Once reason for the increase in activity over 2019 figures is that institutional investors are set on not making the same allocation mistakes twice. LPs who halted commitment pacing plans coming out of the global financial crisis missed out on high performing vintages and are intent on not making the same mistake again. So, despite the pandemic, we believe investors will continue moving forward with their commitment pacing plans through the remainder of 2020 and into the new year. Some investors are going as far as increasing their mandate to invest with emerging managers. Illinois TRS recently announced that they would be increasing the size of their emerging manager program from $750 million to $1 billion.

Despite these positives, emerging managers still face challenges & headwinds

While these are positive signs for the industry, emerging managers are still facing challenges in fundraising from large institutional investors. From working to build rapport with an investor in a digital fundraising environment to pitching with a limited track record, eVestment Private Markets is acutely aware of these challenges. But in the face of these challenges, it’s important that emerging managers remember the phrase made famous by The Hitchhiker’s Guide to the Galaxy: Don’t Panic.

The insights needed to navigate 2021

Launching, or closing out a capital raise in the coming year may seem daunting, but with the right insights, preparation, and planning emerging managers can maximize their likelihood of success.

To help facilitate that success, eVestment Private Markets has created a mini-guide designed to provide insights on some of the ways an emerging GP can research investors, consultants, and the overall market to maximize their chances of winning commitments in 2021.

Read the guide to find insights on:

Gatekeepers – Explore the topics that matter to top consultants and see the average bitesizes for their clients’ commitments

Emerging manager programs – Learn more about GPs with specific mandates for new managers and how to access them

Market Trends – Find out which asset classes are thriving and which are struggling as we move into 2021

Download our mini-guide

Click here to download our mini-guide with insights for emerging managers working to raise capital in 2021

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The Emerging PE Managers' Mini-Guide to the Fundraising Galaxy