How ‘Smaller’ PE Funds Can Compete in Today’s Challenging Funding Market…

Its David vs. Goliath in this Market

If you are a ‘smaller’ middle-market private equity fund, how can you compete against the larger buyout shops in this funding environment? As detailed in the attached Wall Street Journal report, large institutional investors are holding back on deploying new capital.

With large institutional investors such as pension funds pausing (or rolling back) capital commitments — the competition for investor capital has only increased. In environments like this, the large ‘franchise’ funds tend to be the winner of the LP capital game.

If you are going to compete, you have to do so by outperforming them. That means you need to drive greater value creation at the portco level.

To do that, you will need outsourced help.

They Just Have More Resources.

If you are a ‘smaller’ private equity fund, and you are handling the operation of your portcos alone — you are making a mistake. That is NOT what the big buyout shops are doing. They have resources. Tons of resources. And they are putting those resources to work to help them drive performance.

You need to start doing the same.

The bigger buyout shops have skilled Operating Partners deployed at the portco level. These Partners are force multipliers that help the GP deliver performance. While the Operating Partner is helping to create value…