Grafine Partners, built to support emerging managers, hits $600m final close on debut

Grafine Partners has a unique perspective on the emerging manager ecosystem in private markets.

The firm backs new managers, helping them to get up and running and building for the future, and it is a first-time fundraiser itself – having to navigate the challenging fundraising market that has not been friendly to new shops.

That perspective is surely welcome by new shops in today’s market, where many LPs are slowing their commitment pacing and are content to stick with their deepest relationships.

“In 2024, raising a first time fund certainly is not for the faint of heart, neither was it in 2023 nor in 2022. The statistics are 17 percent of the capital that was actually raised in 2022 went to emerging managers. That number last year, 14 percent. This year remains to be seen,” Grafine’s founder Elizabeth Weymouth told Buyouts in a recent interview.

Grafine, formed in 2019 by Weymouth, an ex-Riverstone Partners executive, will announce the final close of its debut fund on $600 million, beating its $500 million target. Fund I collected capital from roughly 24 investors, including backers like CAZ Investments and RedBird Capital Partners.

The firm seeds emerging managers across private markets, including by acquiring stakes, investing alongside them and supporting them as they grow. Grafine also creates opportunities for limited partners to access co-investments with new managers, Buyouts previously reported. The firm is raising a co-investment fund that will invest in the deals made by GPs Grafine backs as well deals that comes through its sourcing network, sources said.

Fund I, which started fundraising in 2021, has already deployed a large portion of its capital across three first-time managers: Ascendant Capital Partners, an opportunistic real estate investment focused on hotel and residential; Stanley Capital Partners, focused on the European mid-market in healthcare, technology and resource efficiency; and The Newcastle Network, an investment platform that provides capital to lower mid-market consumer businesses.

Grafine expects one to two more GP investments in the pool, according to a source.

Weymouth’s team includes partner Luis Enriquez, an ex-senior partner with McKinsey & Company; senior strategic partner Ken Hersh, who co-founded NGP Energy; and senior investment adviser Curtis Glovier, a former executive at Fortress.

Grafine is part of a handful of new managers that have had to push through what is considered by many as the toughest-ever private equity fundraising market. Emerging manager fundraising is down, with first-time funds globally raising around $25 billion last year, compared with $47.6 billion in 2022, according to Buyouts data.

“It’s a challenging fundraising market because what has happened over time is that LPs have consolidated their relationships … with GPs, [and] that has favored the larger GPs. As this industry has grown and grown and grown, however, there are people spinning out. So the spin-outs have not stopped, but raising the first time fund is a little challenging when it comes to LP adoption,” Weymouth told Buyouts in the prior interview, which can be viewed here.

“There is particular adoption in many cases for those who really like something that is off the beaten path, that is innovative, that is distinctive – those are some endowments, some foundations, some family offices, increasingly some other institutions are getting religion when it comes to the alpha generation potential in the first time funds, but it’s certainly not easy,” she said.

Update: The description of Grafine’s strategy has been updated.