Many aspiring fund managers, who are otherwise valid investment professionals, have an unrealistic optimism bias when it comes to fundraising. The universe of LPs or their funds available will be more limited than with other asset classes. This is due to the huge risk factors specific to private equity, which are the lock up period and the “blind pool” nature of private equity investing. A first time fund manager may need eighteen to twenty four months to raise a fund; a follow on fund may be less. A major part of the fundraising process will be the pitch made by the aspiring fund manager to the LPs. Raising even a one hundred million euro fund can easily cost over quarter of a million euros.
Key learning objectives:
The four main mistakes made in fundraising
The key factors for a successful fundraising