What Does It Take to Get Across the Finish Line in the Current Fundraising Environment?

Fundraising for many GPs has gone from being a relatively straightforward exercise to a real challenge. Over-allocated investors, sub-optimal distributed to paid-in capital in prior funds, and increased focus by investors on fund strategies and terms have all contributed to lengthier and more challenging fundraisings. Although some GPs – mostly large cap, well-established sponsors – have continued to raise capital seemingly without much issue at all, a bifurcation exists among GPs in the market as the majority are finding fundraising particularly arduous. In a guest article, Proskauer special funds counsel Lucie Rose explores changes in the way investors are approaching fund investments and how GPs have been adapting to meet new investor demands to get their respective fundraisings over the finish line. Some of the topics addressed in the article include ways to communicate with investors, the value of flexibility in the fundraising process, how to efficiently proffer amended fund terms relative to prior funds and potential structures for co‑investment opportunities. See “Current Challenges and Constraints in Accessing Capital for PE Funds and Investments” (May 4, 2023); and “PE in a Recession: Tips for Tailoring Fundraising Efforts, Anticipating Demand for Secondaries and Managing Co‑Investments (Part One of Three)” (Sep. 20, 2022).

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