Securing initial capital on a deal-by-deal basis to get fundraising off the ground is exceptionally important for private-equity managers raising first-time funds during one of the toughest markets. Through September 20th of this year, a total of 232 debut private-equity funds have reached a final closing globally, compared with 513 funds that wrapped up through all of last year, according to data provider Preqin Ltd.
Peter Laybourn, partner in Ropes & Gray’s asset management group and co-head of the firm’s private funds practice, told The Wall Street Journal that the proclivity to favor established relationships is a “flight to safety.”
“Investors are mindful that during the financial crisis in 2008 and 2009, they pulled back more than they should have, missing out on the strong performance of some funds raised during the period.”
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