What Can GPs Do To Stand Out

Preqin recently shared findings from a survey it conducted of 100 leading private equity LPs from across the globe. Below is an excerpt from the survey that includes quotes from some of these LPs regarding what GPs can do to stand out:

With more than 1,600 funds on the road seeking aggregate commitments of $600 billion as of December 2010, fundraising in 2011 is set to be extremely competitive. What can GPs do to improve their chances of securing commitments to their funds? Here's what LPs from all over the world said makes a GP or fund stand out from the crowd.

 “GPs need to show a decent track record, recent realized performance, a stable portfolio and good returns in the last two to three years, a value-added aspect and a stable team even during the downturn.” 

“GPs will need to show a differentiated strategy, something different from the ‘beaten track.’”

“I like good terms on co-investment deals, and more sweetheart deals.”

“We look for managers that encourage co-investments. Managers that are in the news a lot for good reasons are also attractive to us.”

“We want LP-friendly terms, close to ILPA [Institutional Limited Partners Association] standards, a good track record and a good team.”

“We seek a good track record, strong performance and competitive fees and carry.” 

“Funding private equity investments with high levels of debt is no longer a viable option. Private equity ï¬ rms need to roll up their sleeves and get stuck in, making improvements and adding value to companies.” 

“We require more transparency on fund structure.”

“Many average investors prior to the ï¬ nancial crisis rode the wave of leverage buyouts and did it very well. Now these managers are struggling. Managers now need to be able to add value to companies rather than loading them with debt.”

“GPs need to show that they have managed the crisis well. Their portfolios need to be in good shape and they need to be able to how they can do deals going forward.”

“Track record, operational experience, and having a ‘good feeling’ about a fund – this is obtained through good marketing, personal references and connections. Network investing is very important.”

“To secure a commitment it takes the right fund being presented at the right time.”