Fundless Sponsors
I am in lower middle market M&A and there are a ton of fundless sponsors.
Some are even getting pretty nice deals done.
Do you think this is a fad that will see a lot of failure? Or is this a viable model for a career?
I am in lower middle market M&A and there are a ton of fundless sponsors.
Some are even getting pretty nice deals done.
Do you think this is a fad that will see a lot of failure? Or is this a viable model for a career?
Career Resources
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It's viable. Especially if you get good deals and exits done. That said though, most fundless sponsors hope to get a a couple good exits under their belt and use that success and track record to go out and raise a fund. That always makes life easier, both in terms of committed capital (don't have to line up equity financing on a deal by deal basis) and the management fee keeps the lights on. So you should try and pick a fundless sponsor as close to raising a fund as possible to maximize chances of success.
The days of extracting returns with financial engineering are more or less done and most PE firms rely on improving the businesses they acquire to drive returns.
The guys running as independent sponsors tend to be experienced operators that are cutting out the middle man to a large extent...
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