Emerging Manager Report – 2021

Updated on: April 13, 2023

What Emerging Managers Want to Know About Fund Administration

Moving into 2022, the emerging manager market is poised to eclipse its pre-pandemic levels of new firm creation. Gen II began tracking this segment five years ago in our annual Emerging Managers Report, and, so far this year, we have seen more emerging manager opportunities than at any time since. This includes a record number of first-time funds seeking more than $1 billion in capital.

The Emerging Managers report examines how managers see themselves, looks into what’s realistic in terms of raising capital in a post-pandemic world, gets the LPs perspective and more. Notably this year, emerging manager prospects are performing deeper due diligence on fund administrators and service providers across the spectrum.

Their questions reflect a far deeper understanding of the drivers of operational success and a broader set of imperatives from the GP and LP view. For example, over 80 percent of fund manager respondents cited “proven expertise and experience with funds like mine” as an “extremely important” or “very important” factor in choosing fund administration service providers.

Interestingly, less than one third of respondents cited “a prior relationship with the provider” as a crucial factor in that decision. The questions posed by emerging managers and their LPs across many disciplines of the sponsor/fund administrator relationship include:

• Can the fund administrator demonstrate scalable solutions as sponsors raise more capital?
• Are they regularly investing in technology to meet the enhanced reporting needs of investors and internal stakeholders?
• Have they instilled a corporate culture that ensures long-term stability across the service team and firm?
• Do they provide specifics on the team that services the engagement – is it a dedicated team, or will the sponsor need to call separate departments for separate tasks?
• What access to fund information can the sponsor have in an on-demand fashion?
• And how is the fund administrator ensuring data protection and defense against cyber threats?

To get the answers to these questions and see how new managers are making their mark and standing out in a crowded market, read our full report: Buyouts: Emerging Managers Report.

Published on: September 27, 2021