Private Equity Fundraising
Hey - I work in sales at a private equity fund. I help fundraise for our funds. I mostly work with portfolio managers and large investment advisors.
Any advise from people here as to how you have been successful in a fundraising role at a private equity fund?
PE fundraising?? (Originally Posted: 03/22/2010)
Hey guys,
I recently saw an ad for an SA position within a PE funds group. However, the position is within another department within PEFG and the candidate should have a strong interest in learning about private equity fundraising. I was wondering how different is PE and PE fundraising?
Its completely different.
Private Equity Fund Raising - Making Marketing Materials, Maintaining investor database etc Basically investor relations type work Private Equity - Financial Modeling, Due Diligence etc
Thanks for the information.
Capital raising can be pretty cool, but it's also pretty niche. You're not doing DD on investments themselves. Instead, you're going to be doing DD on investors and on the PE funds themselves. You need to be able to match up the right investors with the right funds. If you constantly bombard the same investors with requests for every fund you know of, they're going to tell you to fuck off.
As such, you are going to have to get to understand the investment profiles of the people you're dealing with (probably endowment fund managers). You need to understand where they currently have money, how much money they are looking to invest in PE each year, and which funds best fit their portfolio. To sell the fund to the investor, you're going to need to understand the broad investment strategy of the PE fund. How are they going to make money? How is the risk they take different from that which the investor already has in his portfolio?
And why would they want to deal with you? So, you're going to need to manage a lot of relationships. In the end, that's the most important and valuable part of your job, since you can teach anyone to crunch numbers in Excel, but you can't really teach good people skills. Also, those relationships are transferrable. And you can make a lot of money raising capital for hedge funds, venture capital firms, and private equity shops.
And it's not that hard. It's risk-free money. You don't have to take punts to make cash.
Can anyone comment on the work-life balance ?
Fundraising will allow you to interface directly with GPs - this is great exposure. You will be involved with putting together PPM's, which is equivalent to a CIM that you've likely produced before if you're coming from an IB background - this will pretty much cover everything about the fund, strategy and a term sheet.
As others have said, it is very investor relations/marketing oriented, so make sure you have a desire for this role. In addition, PE funds groups also are segmented by different verticals within PE: distressed, buyout, late-stage venture, and credit.
Work life balance compared to a banking role will be great. However, pay is much lower than banking.
There is some cyclicality to the volume of projects, as fundraising is tied to the markets and asset allocations for LPs (e.g. CalPERS just announced their lowering their allocation % to PE); but there are still many funds who will be raising a new fund in the next 12-18 months (this would be a good question to ask, if you land an interview).
johnny_quest Hi! Thanks for the info, do you mind commenting a bit more about the pay? The base at BBs is the same across the street, but I'm curious about bonus ranges. Thanks!
How much different is the compensation on avg?
Bump. Would appreciate knowing approx ranges for associates in these fundraising groups?
PE fundraising interacts with investors, therefore its a more biz deve salesy role. This is a niche role that requires someone who understands the fundraising/introduction cycle. When a fund is not marketing or raising a new fund, it's a cushey job, but when you're fundraising its a high pressure around the clock job.
Can anyone comment on compensation for analysts? I know the base is the same across street (85k), but what about bonuses?
Hey guys, I have some questions regarding fundraising. If you have a target of let's say $6bn for a new fund. Is it okay if you just raise $3bn? Also I think the time limit is one year and half to try to raise a new fund in Europe but why would some firms cancel their attempts after just 6-7 months? Thank you!
Unless you're KKR Carlyle Blackstone for a first time fund, your $6 bln target will likely get you shoveled aside because that fund size is way too big. but understand that it's not the core of your question.
If your target is some number but you only ended up raising half, that does not look good on you bc you either aimed too high and investors didnt bite or market condition wasnt good. Either way you end up having to explain why when you fundraise next.
On canceling fund raise, it's really painful to sit through meetings trying to pitch something that nobody wants/has capital for bc of a 2008 maybe. If it's obvious to a manager that he/she will never be able to raise a meaningful amount, time to cancel and re-evaluate before wasting time and money on travel and placement agents.
How do PE firms raise capital? (Originally Posted: 02/21/2010)
Can someone in the industry shed some light on this? What kind of strategies do PE firms utilize to raise capital from institutional investors? state/corporate pension funds, funds of funds, etc. I understand some of these managers have impressive track records, but not all of them.
When looking at some of these fund managers, they didn't any have prior PE experience (or entrepreneurial experience) before starting their successful fund. Some only had banking experience.. some were merely lawyers, etc.
Is it just a matter of being well connected, or is there a significant degree of salesmanship required? What impresses the investors?
Thanks!
They use placement agents, fund of funds, personal connections.
This is an example of a firm that raises capital:
http://www.sixpointpartners.com/
For more information about PE/IBD, please check out http://leverageacademy.com/blog
impressive track record is a big plus connections are also very important coming from prior successful funds (ties into prior track record) salesmanship is clearly important in any road show
PE Fundraising (Originally Posted: 04/11/2014)
Hi - would anyone know of, or have access to, any sources for PE funds that are currently in the fundraising process? The only ones that I know of are Preqin and you one has to be a subscriber. Would anyone have a list available or access to this source? Can be sub $100m as well.
Happy to work out some sort of arrangement if someone has access to this data.
Many thanks.
PM me with what your offering.
PM me
PE Fundraising - Where to go after? (Originally Posted: 03/14/2011)
If one spends his analyst years after UG at a top PE fundraising group, where can he go from there? Are you only going to be able to switch into other investor relations/marketing/sales roles?
Is B-School the best way to gain skills and network to change into a more analytical role?
Fund marketing, yes, and yes; next set of questions please. ;)
Btw, your handle is "Shmoozer"...why the hell do you want leave sales for crying out loud???????
touche. Im just trying to weigh my options. Don't worry about me though
Out of pure curiosity...how involved are partners/MDs in the fundraising process at established medium and large firms.
What did you decide?
Where exactly do you apply if you want fundraising/marketer kind of role? I thought these were done primarily by partners of the firms. Are there graduate opportunities as well?
PE Fundraising Groups (Originally Posted: 01/01/2008)
Hope everyone enjoyed the holidays! Does anyone know the compensation or exit opps for a top PE/HF Fundraising Group straight out of college (think Citadel, DE Shaw, Fortress, Och Ziff)? What are the chances of moving into the PE group after a two year stint?
not going to happen.... Very different skillset.
how is a PE FOF job right out of undergrad viewed as far as getting into a top b-school
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