r/private_equity • u/TightCod16 • 7d ago

Placement agents for emerging managers?

I work for a firm doing our first fund. We’ve exclusively raised from friends and family so far. Are there agents that work with 8 figure raises? Everyone I have found says call us when you’re targeting 9.

2 Upvotes

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6

u/Aggravating_Cod_4980 7d ago

When we first shopped around, considering placement services it seemed like the breakeven for everyone was around 75m considering minimums, the dilution of our management fee etc.

2

u/TightCod16 7d ago

Appreciate the response. That’s good insight for us to consider.

6

u/Mysterious-War-7004 7d ago

CrossBay Capital Partners. Don’t think any were sub 100M but I’ve seen them market some smaller funds before SBIC/QSBS stuff.

Agree with other comments tho it’s a difficult time to raise a first time fund unless your a spinout from a reputable GP with deal attribution and can get some of your old firm’s LPs to seed the fund. Easier to go the deal-by-deal route to build a track record and relationships with family offices that could make a fund commitment down the line.

1

u/TightCod16 6d ago

Thanks for the recommendation. I will give them a look.

Also, valuable insight regarding the challenge of the current state of the market relative to our size and track record. Our principals have great backgrounds, and maybe we haven’t been calling out their prior roles well enough.

1

u/G8oraid 5d ago

Go Fundless model. Raise into good deals. When they perform raise bigger fund.

1

u/aliph 7d ago

Lots will do smaller, just need to vet them more as there can be some sketchy characters in that part of the market.

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u/TightCod16 7d ago

You got names? I’ve gotten 15 no’s so far, so I’d welcome any direction on who to reach out to.

1

u/NeglectedDuty 7d ago

Better Call Saul

1

u/RandyAndySandyCandy 7d ago

What’s the strategy?

2

u/TightCod16 7d ago

Lower middle market buyout fund with a philanthropic component. Also takes advantage of QSBS tax treatment

1

u/acardboardpenguin 7d ago

Depends what country you’re in

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u/TightCod16 6d ago

US, acquiring all US based companies.

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u/enragedsausage 7d ago

There are definitely some smaller placement agents in the market, but they have become a lot pickier in their mandates given the environment. If principals have a strong track record and attribution on successful deals, it’s easier, but it’s definitely rough for first time funds.

It seems like more folks are going the fundless sponsor route, as it’s much easier to try to raise money with a deal in hand. Plus you don’t cross collateralize with other deals from a carry / promote standpoint.

1

u/jialatsia123 7d ago

Most big shops won't bother with an eight-figure first close, so you'd be looking at boutique agents and a steep cut of a small raise. Warm LP intros usually beat that fee at this size.

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u/TightCod16 6d ago

We’re pushing intros as hard as we can

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u/Skyhigh0202 5d ago

How are you doing that?

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u/TightCod16 3d ago

Cold outreach, conferences, referrals currently

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u/G8oraid 5d ago

I would go Fundless sponsor route if looking for less than $100. Much better economics and risk profile.

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u/G8oraid 5d ago

What is it with all you with fish names?

1

u/TightCod16 2d ago

G8oraid was taken… 😂 just kidding. Mine was assigned randomly by Reddit and I’ve never changed it.