Fundraising For Private Equity & Illiquid Strategies

Raising new capital from professional investors is a time- and resource-intensive process that detracts from a sponsor’s core role of managing committed capital and investments. Independent sponsors’ networks need to be constantly broadened and refreshed to source new deals and get them closed.

Fundraising is particularly challenging for new, emerging or spinout managers. Institutions’ operational criteria for new or emerging managers are at least as stringent as for established managers. The simultaneous demands of building a team, instituting investment processes, and establishing offices and back-office systems demand significant resources. The risk of missteps is high, and the upfront costs are significant.

More established managers face different challenges, often involving team continuity, inconsistent track records, insufficient investment exits, strategy drift, and other potential issues. By getting involved early in the fundraising process, we can preemptively identify and address potential investor concerns.

The time required to close a fund is influenced by numerous factors and can range from several months to two or more years. Managers with strong visibility towards a first close from existing investor relationships are better positioned to attract broader institutional interest. For co-investments or single transactions, the timeline is obviously much shorter – we know how to work in “deal time” where deadlines are far shorter.

With two decades of experience as a placement agent taking a pragmatic approach, Touchstone can make a critical difference for a resource-constrained sponsor – not only in current fundraising, but also in establishing a foundation for a first or subsequent fund.

Importantly, we help GPs and independent sponsors sharpen their marketing message to best present their investment propositions to the institutional investor community. Our understanding of institutional markets enables us to succinctly convey key attractions and perceived risks of an investment strategy, convincingly position the fund or transaction, and mold compelling marketing materials for a successful capital raise.