Emerging Managers Fundraising # I, II

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• 62% of emerging managers met with over 100 limited partners (LPs) to close recent funds.

• Only 35% of our private equity (PE) and venture capital (VC) fund respondents have applied for and obtained emerging manager allocations from emerging manager programs or mandates.

• The top three sources of capital are family offices, high net worth individuals, and fund of funds.

Faced with such a challenging fundraising environment, emerging managers are now more than ever hyper focused on certain key elements in an effort to successfully

attract LP investors. Some key areas that emerging managers should focus on include:

• Developing an investment strategy: Developing a well-defined investment strategy is critical to a successful fundraise. Your strategy should clearly demonstrate your expertise in this particular investment niche and provide prospective LPs with your value proposition and how you intend to achieve superior returns. This should include also describing the potential risks involved and how you intend to mitigate those risks.

• Highlighting your track record and experience: Competition for allocations is fierce — you should highlight your relevant experience clearly to build credibility with potential investors. Showcase your capabilities through a pitch deck to demonstrate to investors your value proposition and experience with your specific strategy. Highlight your experience by describing your short-term plans including immediate fundraising targets, initial investments, and operational setup tasks. Make sure to clearly define milestones for the first one to two years, as well as long-term plans with how you define success in year five and possible exit strategies.

• Building your team: A strong advisory board is a crucial asset for any emerging manager. It provides strategic guidance, industry expertise, and valuable networks that enhance the fund's credibility and operational effectiveness. By selecting advisors with a proven track record, deep industry knowledge, and strong connections, you can aggregate insights that help you navigate complex challenges and seize opportunities. Don't underestimate the value of selecting strong external consultants or in-house professionals. An experienced attorney can help navigate the legal landscape, a regulatory specialist can ensure compliance, and an independent accountant can bring transparency into the fund's financials.

• Preparing your documents: Having all the required legal and compliance documents ready is essential for instilling confidence in possible investors. You’ll need to prepare subscription documents, limited partnership agreements, compliance manuals, offering memorandums, and due diligence questionnaires in advance. Your documents should provide a clear outline of the fund’s terms and conditions, including fees and expenses, which helps establish your transparency in the investment process.

• Developing a list of investors: Established funds may have access to more institutional allocators in addition to family offices, wealthy individuals, and fund of funds. The results of Citrin Cooperman’s recent survey report indicated that the top three capital sources for the report’s emerging manager respondents are family offices (cited by 70%), wealthy individuals (cited by 64%), and fund of funds (cited by 43%), with institutional capital trailing behind. As you start to develop a list of potential investors, build a list of investors that have historically invested in an emerging manager with your strategy. Research potential investors to understand their investment preferences and past allocations. Focus on investors that believe in your investment thesis.

• Leveraging your network: Fundraising can be time-consuming, but emerging managers can benefit from creatively using available resources to augment their efforts. Consider partnering with a third-party marketing firm to expand your reach and connect with investors who might not have been otherwise accessible to you. In addition, grow your network by leveraging industry associations and conference events to develop new relationships, insights, and connections with others in similar positions.

For more insight on Fundraising for Emerging Managers in 2026 Contact John Denes - johndenes@reocapitalllc.com