In an Axios Newsletter, Pro Rata, Bryan Hunkele and Isabel Dische Share Insights on Current State of Fundraising Market
Despite data showing that emerging managers often outperform legacy peers, it is increasingly challenging to raise a first-time private equity fund as the denominator effect is causing many limited partners to retreat.
Bryan Hunkele and Isabel Dische, partners in Ropes & Gray’s asset management practice, told Axios that deal warehousing is becoming a top differentiator. The sweet spot, Bryan and Isabel shared, is one or two transactions. That should be enough to prove that the fund manager is able to successfully source and close transactions (including securing bank financing in necessary). Too many warehoused deals could lead prospective LPs to wonder why the manager hasn't held a first fund close.
More on the topic in Ropes & Gray’s latest PErspectives piece here.