Chris Witkowsky

Apollo closed its debut Impact Mission Fund on about $1bn in 2022, the firm said at the time.

While GP-led inventory is high, capital chasing such deals remains limited to a small universe of buyers. Private equity firms like Leonard Green have seen opportunities to move into the under-capitalized space.

Fundraising is slow and especially so for emerging managers, who have seen their share of the private equity capital share fall precipitously over the past two years.

Emerging manager fundraising is down in the tough market, with first-time funds globally raising around $25bn last year, compared to $47.6bn in 2022, according to Buyouts data.

GP-led deals represented about 44% of the approximately $109bn in total volume last year, with single-asset transactions representing the majority of such deals, Lazard found.

So how does a new shop raising its debut fund navigate what is widely considered to be the toughest fundraising environment since the global financial crisis, if not ever?

Earlier this year, Sycamore took over Chico’s FAS in a $1bn deal, which the firm planned to merge into its KnitWell Group platform that includes other brands like Ann Taylor and Talbots.

Many limited partner institutions either have used the secondaries market to sell fund stakes, or are ready to hit the market with sales as soon as pricing hits the right level.

The team already has nine fundraising mandates, including Graycliff Partners V; Ascend Partners’ second fund; Pritzker Private Capital Fund IV; and the debut fund of ex-Vista Equity senior executive Brian Sheth, Haveli Investments.

There's a shift in the ongoing dynamic between LPs and GPs, with the former rediscovering leverage as a result of the sluggish market.