Most Read Contributor in British Virgin Islands, February 2017
Greetings offshorefundsblog readers. Phil and I have just returned from attending
the inaugural Cap Intro West Conference in San Francisco last week.
We were both honoured to be invited to speak at the conference: I
joined a number of friends presenting a Private Equity and Hedge
Fund Boot Camp for start up and emerging fund managers while Phil,
somehow, managed to have the audience in stitches while he detailed
the ins and outs of AIFMD on his panel on Navigating Fund Marketing
Rules and Regulations.
As you might expect at a January conference, a lot of time was
spent during the breakouts looking at the tea leaves to determine
what 2017 might hold for us. I am very pleased to report that the
mood was generally optimistic. Some of this may have due to the
Trump administration's intended policies to boost the US
economy and some of this may have been due to the generous pours of
the bar staff at the evening cocktails!
Phil on AIFMD at Cap Intro West
In all seriousness, the statement that stuck with me the most
during the conference was that studies had shown that the strongest
performance of most fund managers is during their first three years
of existence. This may seem like a no-brainer to some of us but I
hope that this strikes a chord with readers who stumble onto our
humble blog while researching the ins and outs (and
what-have-yous!) of starting up a fund. There is demand for start
up and emerging managers and there is good reason for such demand.
As my friend Paul Marino noted in his opening remarks before our
Boot Camp panel Preqin data shows that:
at present, 51% of LPs will invest,
or consider investing, in a first-time private capital fund in
2016, a 12 percentage point increase from 2013. In addition to an
increased willingness to commit to or consider first-time funds,
11% of LPs claim they would invest in spin-off firms, up from 6% in
first-time funds not only deliver
returns comparable to established GPs, but many times they
outperform experienced managers
covering a span across 13 vintage
years (2000-2012), and comparing median net IRRs of first-time
funds against those of established fund managers, 2004 is the only
vintage year in which non-first-time funds have outperformed
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