Two new funds emerge as LP confidence in first-timers soars

Those who have started their own firms, using money out of their own pockets, have everything to lose.

It’s like spring in the fall!

We had two sparkly new fund formations from emerging managers come across our desk this week. There’s nothing more we enjoy here than writing about the birth of new funds.

Coincidentally (perhaps?) we also published our emerging manager report this week. The report, based around a survey we do alongside Gen II Fund Services, found that confidence in emerging managers is high. A majority of respondents, 62 percent, believe the risk/return profile for the newbies is attractive relative to established firms.

And why is that? Because they’re hungry, baby. They simply can’t fail. Those who have started their own firms, using money out of their own pockets, have everything to lose.

I remember chatting with John Stewart, founder of MiddleGround Capital, who is an inveterate fisherman, but had to sell his boat to help get the firm started. That’s the kind of sacrifice an LP likes to see out of a young up-and-comer.

But, for young firms, attracting capital remains a challenge. The emerging managers able to raise capital generally are those led by executives with experience from larger shops, or those firms with well-defined, differentiated strategies, according to the report in Buyouts. Read the full report here.

So, for our two newbies this week, one successfully raised their first pool. That would be a firm called Tidemark Capital, formed by ex-TCV general partner David Yuan. Tidemark closed its debut fund on $575 million, beating its $350 million target for growth investments in lower mid-market tech businesses.

Tidemark has the well-known, experienced executive factor down – the strategy, mmmm… well, we’ve seen tech-growth take off in recent years, so I’m not sure how differentiated it is, but Yuan’s track record speaks for itself.

The other is Newlight Partners, formed by a group of ex-Soros Fund Management PE execs who spun out in 2018. The group is raising its debut independent pool that could target around $1 billion. Newlight has the advantage of a leadership team that has been together for many years – LPs like to see that sort of stability and consistency.

Do you know of other new shops forming out there? Let me know on that, or other tips and drama you come across at or find me on LinkedIn.

Check out Buyouts’ extensive coverage of emerging managers in our sparkling-new landing page here.