New Roadmap for PE Fund-raising

The fund-raising sentiment for PE firms globally seems to be improving. This is borne out by the fact that a majority of the world’s top PE executives are either positive or neutral about the fund-raising environment this year, a marked improvement from last year. This is one of the key findings of a global survey conducted by Grant Thornton. As many as 54 percent of those surveyed said they were either positive or neutral about this year’s environment, compared to just 27 percent a year ago. The Global Private Equity Report 2013-14 is the result of in-depth interviews conducted with 156 senior PE practitioners worldwide.

Even as sentiment improves, a new PE roadmap seems to be emerging. The survey shows 56 percent of GPs (General Partners) predicting an increase in alternative fund structures over the next three years as LPs (Limited Partners) prefer options other than the traditional 10-year blind pool fund. The preference now seems to be for deal-by-deal engagement, where investors are presented opportunities on a case-by-case basis.

The survey also shows the lines between fund-raising and investor relations are blurring. Fund-raising is now being seen by PEs as a constant process of engagement. With the power clearly shifting in favour of LPs, they are being wooed by concessions, co-investment rights, advisory board seats and fee discounts.