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Memo from global law firm Seward & Kissell LLP.
We have recently witnessed a noticeable lengthening of the time needed to close on an institutional investor's fund allocation. Anecdotally, the typical time frame to close on an institutional investor allocation appears to have increased from approximately 8 - 12 months to 18 - 24 months for closed end/private equity funds and from approximately 3 months to 6 - 18 months for open end/hedge funds. While there may be variables beyond a private fund manager's control, there are a number of steps that can be taken which can streamline the fundraising cycle, including:
• Do thorough background checks: It is surprising how often a potential investment is pulled because of items discovered on a background check. Therefore, it is imperative that all key personnel (at the very least the founders, the whole C-suite and all investment professionals) be checked. Any red or even yellow flags (such as an old charge) need to be addressed, and remember that in the current fundraising environment it is better for the manager to be conservative when handling these types of issues.
• Prepare a proper marketing deck: The marketing deck is often the only bite at the apple for many managers. Accordingly, it must look professional, be edited for typos and grammar, and should be reviewed by experts from both a legal and business content standpoint. There are many common mistakes that can be avoided, ...................... To view our full article Click here
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