Ninety-six percent of Limited Partners think emerging private equity and venture capital fund managers have advantages over traditional managers, according to the results of a BVCA survey.
Taken between January and February this year – before the COVID-19 outbreak – we asked more than 40 global institutional investors and family offices to share their views on emerging managers, from how they actually define what an emerging manager is, to the attractions and challenges of investing.
- 67% of LPs track a fund manager between 1 and 2 years before investing
- LPs consider managers raising a first or second fund emerging, but few would classify the third fund as such
- Fund size is a core metric for just over half of LPs in defining an emerging manager
- Investors highly value track record, team history and differentiated investment strategy
- Almost all say emerging managers have advantages over established ones – they are hungrier to out-perform, more likely to form strategic relationships with investors, and more often focussed on unique investment strategies
- Lack of track record is the number one challenge for LPs when assessing emerging managers
- Over the past three years, LP respondents established an average of six new relationships with emerging managers, and seven for established ones
Leon de Bono, Assistant Director General and Director of Membership Services, BVCA, said:
“It seems a while since the onset of COVID-19 changed our outlooks for the foreseeable future, but earlier this year the BVCA wanted to gain a better understanding of what investors are looking for when it comes to backing the new generation of private equity and venture capital fund managers. Emerging managers are the lifeblood of our industry, and will continue to be so as we navigate and emerge from these difficult times. Many of the findings will remain useful to LPs and GPs alike.”
The report can be found here.
For further information, please contact
Tom Allchorne, Director, Communications, BVCA
+44 (0)20 7492 0407
email@example.com or firstname.lastname@example.org
Notes to editor
- The British Private Equity & Venture Capital Association (BVCA) is the industry body for the UK private equity and venture capital industry. The BVCA has over 800 member firms, representing the majority of UK-based private equity and venture capital firms and their advisers.