Looking for opinions on the likely hood of a fund raising scenarios happening… I have come onto a situation to pick between potentially joining two firms.
First firm has two existing funds outside of their investment period. The first fund had poor performance but the second fund has done well with a few good realizations and the remainder of the portfolio is in good position. They have effectively paused fund raising because one of the investments in the second fund is being marketed and is anticipated to be a slam dunk. Once that investment is realized then the idea is that there would be a lot of interest and momentum to kickstart the next fund.
The second would be a new firm/fund with an upstart founder who is relatively unproven but has had success in previous well respected firms and is breaking out on their own. They have some softly committed capital to start pursuing an acquisition or two that could be warehoused into the new fund as a kick start but it is very much in the early stages.
I believe in the investment thesis of both. The first fund is definitely bigger but the second fund offers a larger piece of the pie. The first firm is interesting because starting with a new fund from the onset and getting a piece of the carry. Both a very small teams and I like the managers in both.
Really looking for perspective on what the odds are of either of these playing out to start to judge whether or not the risk is worth the reward
Fund 3 is way more likely than one or two acquisitions leading to a first time fund. And you won’t know if the acquisitions are successful until a few years later
This only answers your question on likelihood though. It may be getting in from the ground floor is a better option, if you have conviction that they will succeed. Hard to know and not really what you’re asking
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