Private equity fund raising is a difficult (but essential) element of starting a new investment company. Making use of your network is the best method to find LPs that can help you reach your target of committed capital, however, this requires careful relationship management that is based on the proper methods and tools.

For a private equity company, LPs are the investors who back your fund with committed capital. They are typically large institutional investors, like pension funds, endowments and mutual funds. In other operationalroom.com/what-is-a-work-from-home-policy instances they are high-net-worth people or family offices that are looking for an increase in their investment in an equity fund that is private. Finally, some LPs could be funds-of-funds that have the resources to make investments in a variety private equity funds. They can help you build a portfolio that is diverse.

You must meet a set of requirements in order to be a LP. LPs are looking for an investment strategy that is similar to yours, an track record in a similar strategy and a commitment. They also require you to be knowledgeable about the operations of your fund and be able to demonstrate why it’s worthwhile to invest.

To get the most out of your LP relationships It is a good idea to get your legal team to draft your partnership memorandum, offering terms, and subscription agreement before you begin actively seeking out potential LPs. It is also a good idea to evaluate your internal capabilities in investor relations and think about enlisting help of an agent for placement.