Fundraising For Private Equity & Illiquid Strategies

Raising new capital from institutional investors is a time- and resource-intensive process that often competes for the focus and attention a GP needs to perform its core tasks of deploying or managing existing capital and investments.

Fundraising is particularly challenging for new, emerging or spinout managers who face the simultaneous responsibilities of building out a team, establishing offices, instituting investment processes, and implementing back office reporting systems. The initial and continuing criteria applied by institutions to new or emerging managers are at least as stringent as for established managers. The risk of missteps is high, and the upfront costs are significant.

More established managers have different challenges, often involving questions about GP team continuity, inconsistent track records, insufficient exits in a prior fund, changes in strategy from one fund to another, and other potential problems. By getting involved early in the fundraising process, we can help identify and address potential LP concerns.

The time required to close a fund is influenced by numerous, often external, factors and can be as rapid as several months to as long as two or more years. Managers with strong visibility towards a first close from existing investor relationships are better positioned to attract broader institutional interest.

With over a decade of experience as a placement agent taking a pragmatic approach, Touchstone can make a critical difference for a resource-constrained GP – not only in current fundraising, but also in establishing a foundation for subsequent funds.

Importantly, we help GPs sharpen their marketing message to best present their firms and investment strategies to the institutional investor community. Our understanding of the institutional markets enables us to succinctly identify key attractions and perceived risks of an investment strategy, convincingly position the fund, and create or modify compelling marketing materials for a successful fund raise. In so doing, we develop a deep understanding of the strategy, the team, the process, the portfolio, the pipeline and especially that which makes the GP unique. We become an extension of each client we serve.