Nearly 100 GPs and LPs gathered in the historical and inspiring Zunfthaus zur Zimmerleuten building near the Limmat in the Zurich oldtown, brought together by a common interest for first time funds globally to attend the Unigestion Emerging Managers Conference.
Mature GPs represent by far the biggest share of capital raising, while emerging managers remain underrepresented. However, despite a more challenging fundraising environment than ever – a combination of macroeconomics unfavourable to exits and the denominator effect – emerging managers are actually showing strong signs of resilience.
Launching a first-time fund requires a willingness to tolerate a certain level of risk. In the present business climate, it's not surprising that few teams are inclined to take the leap and establish their own firm, separating from their established employers.
In the competitive market, where simply aiming for revenue is no longer sufficient, emerging manager strategies are becoming more appealing for generating alpha. Despite the operational and execution risks linked to these strategies, the potential rewards make them attractive.
However, those who do embark on this adventure and differentiate themselves from the crowd have potential to outperform and generate alpha. A few distinctive emerging managers were showcased throughout the day and a recurring theme was the need to define their unique proposition through a clear and focused strategy, sector or geographical focus (with notably interesting developments to watch in India). Furthermore, new pockets of dry powder have been identified in private wealth (family offices as well as wealth managers etc.), which has the least level of overallocation to private equity and represents a further funding opportunity for emerging managers.
The underlying message from the conference was that for both established and emerging managers, the key to raising capital lies in differentiation. How are you different from your peer group, why will your returns beat the average? Or to put it more bluntly: why you?
Launching a first-time fund requires a willingness to tolerate a certain level of risk. In the present business climate, it's not surprising that few teams are inclined to take the leap and establish their own firm, separating from their established employers.
In the competitive market, where simply aiming for revenue is no longer sufficient, emerging manager strategies are becoming more appealing for generating alpha. Despite the operational and execution risks linked to these strategies, the potential rewards make them attractive.
However, those who do embark on this adventure and differentiate themselves from the crowd have potential to outperform and generate alpha. A few distinctive emerging managers were showcased throughout the day and a recurring theme was the need to define their unique proposition through a clear and focused strategy, sector or geographical focus (with notably interesting developments to watch in India). Furthermore, new pockets of dry powder have been identified in private wealth (family offices as well as wealth managers etc.), which has the least level of overallocation to private equity and represents a further funding opportunity for emerging managers.
The underlying message from the conference was that for both established and emerging managers, the key to raising capital lies in differentiation. How are you different from your peer group, why will your returns beat the average? Or to put it more bluntly: why you?
If you wish to learn about opportunities in Switzerland, please reach out to our Zurich team.
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