The Modern Fundraiser

In this special supplement, pfm provides a guide to the choices, vehicles and structures available for private alternative asset fund managers and their investors.

Today’s fund managers are expected to be able to accommodate a range of requirements from investors wanting exposure to alternative investments, but who may be reluctant to sign up to many of the orthodoxies of the limited partnership fund structure. In order to map out the choices, vehicles and structures being adopted in today’s buoyant fundraising climate, pfm has partnered with global law firm Proskauer to produce this special report on what it takes to successfully raise a fund today.

Regulations including Dodd-Frank in the US and the Alternative Investment Fund Managers Directive in Europe, have drastically changed the rules of the road. Hazy concepts like “reverse solicitation” and what it means to be a SEC-registered advisor deserves managers’ careful consideration before distributing marketing materials and ultimately securing commitments.

CCOs have always been a part of the fundraising process, but are increasingly expected to navigate GPs through these new, choppy regulatory waters.

Heightened investor due diligence is another trend. LPs are requesting CFOs’ time to discuss budget numbers, IT security and the firm’s reporting capacities. As stewards of the back-office, CFOs are expected to speak confidently about accounting software, wire transfers and other operational matters to visiting LPs.

I could go on, but the point is this: fundraising is increasingly an “all hands on deck” exercise given the various factors investors consider before making a commitment. Investor relations personnel, placement agents and senior managers will continue to manage the process through careful coordination, but everyone at the firm now has a role to play, including those responsible for tasks related to compliance, finance, tax and administration.

Throughout this supplement, we give readers an overview of the fundraising environment, and drill down into key issues that warrant deeper analysis and discussion, including the challenges of managing an oversubscribed fund – a nice problem to have, but one fraught with investor relations risks; distributing co-investment opportunities to keen LPs; and knowing where crucial partnership terms have moved now that the pendulum of power is swinging back in GPs’ favor.

Click here to read the supplement.