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Saturday, August 27, 2011

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Capital Raising Resources

Capital Raising Resources

Four Resources for Finding Investors and Raising Capital

The current fund-raising market is difficult, especially for young private equity firms without a proven track record. Finding private equity investors is a demanding process even in boom years and after a couple years of poor returns and with the competition from the much more quickly recovering hedge fund industry, fund marketers must use all available resources to raise assets. The following article gives four resources for reaching investors and raising capital and will be part of my complimentary 20+ page guide to private equity fund marketing that will be available for download this week:
  1. Placement Agents: Private equity firms sometimes hire placement agents to help connect management with potential investors. These third party agents have attracted some negative press over pay-to-play agreements with state pension funds which have resulted in government investigations, however, new SEC rules are aimed to prevent such problems. Despite the ethical violations of a few, placement agents are still a legitimate and necessary way to raise capital for many firms. These agents sometimes raise private equity for companies but many perform the same capital raising role for private equity firms.
  2. Look For Different Types of Investors: Reaching investors is difficult if you are always contacting the same institutional investors or wealth management firms. Consider expanding your list of investors to include a wide range of potential limited partners including: wealth management firms, family offices, pension funds, sovereign wealth funds, endowment funds, foundations and institutional investment consultants. Many private equity firms overlook these various capital sources and stick to familiar investors. In a tough fundraising climate marketers should be reaching out to ALL potential investors across the board. We currently offer a database of all these different types of potential private equity investors, see Private Equity Investor Directory.
  3. Issue a Press Release: This method is tried and true as firms have used it for years to gain name recognition and grow their brand. But many private equity firms still overlook this opportunity. I think this is a mistake considering the potential number of investors a press release could reach in media publications. Think about the confidence boost when you contact a potential investor and introduce your firm and he replies "I saw an article about you the other day." This name recognition goes a long way in building the initial trust with an investor.
  4. Expand Your List of Private Equity Investors: While you have now opened up your fund to new types of investors you also need to simply expand the number of investors you can reach. Attending networking and working with placement agents can yield some results but to vastly increase the size of your potential investor list you should consider a directory of investors. For a directory of more than 3,800 private equity investors follow this link.

  1. Private Equity Tracker Tool
  2. Private Equity Career Guide
  3. Private Equity Training
Tags: private equity marketing, private equity fundraising, private equity capital sources, private equity capital raising, raising private equity, private equity investors, finding private equity investorsLink to This Resource: Capital Raising Resources
http://privateequityblogger.com/2010/06/capital-raising-resources.html
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