What emerging managers look for in a service provider

Emerging managers prioritize proven experience in their selection of service providers.

In addition to assembling their front- and back-office teams, emerging managers must also engage the necessary service providers ahead of a fund close.

And it is law firms that are typically the first to be brought on board. On average, emerging managers participating in the sixth annual Buyouts Emerging Manager Survey, conducted in partnership with Gen II Fund Services LLC, secured lawyers 7.8 months prior to holding a first close. 

Fund administrators are the next to come on board, followed by compliance consultants, and last – but certainly not least – by placement agents. Indeed, Joe Benavides, managing partner and co-founder of emerging manager OceanSound, says he could not have contemplated embarking on the mission to raise a first-time fund without the support of a placement agent partner.

Meanwhile, proven expertise with similar firms is what emerging managers deem most important when selecting a service provider. Other criteria that are taken into account include the provision of strategic advice beyond the core offering, the endorsement of a national or industry group, LP preferences and a prior relationship.