Launching a private equity fund is both an exciting proposition and a complex, challenging endeavor. Emerging private equity managers need to make sure that they are well prepared and well-equipped to take on the challenge of securing capital and gaining investor interest. Below are seven important items that emerging private equity managers should consider prior to launching their fund.

1. A clearly defined investment strategy: Before launching a private equity fund, managers will need to have a clear understanding of what type of investments they plan to focus on. This includes identifying target sectors and geographies, as well as developing a focused approach to researching and evaluating potential investments.
2. A plan for fundraising: Securing capital from investors is essential for any private equity fund. Emerging managers should develop a plan for raising capital ahead of time, which may include reaching out to contacts, fundraising agencies, and other peers who can introduce them to potential investors.
3. A well-crafted pitch deck: A compelling pitch deck is key for attracting investor interest. It should include detailed information about the fund, its strategy, past performance, and potential returns.
4. A robust compliance program: A strong compliance program is essential when it comes to protecting both the fund and its investors. This program should include written policies and procedures that address areas including anti-money laundering, record keeping, investment suitability, trade monitoring, and confidentiality.
5. A clear understanding of regulations: Every jurisdiction has its own set of regulations and rules surrounding private equity funds. It is important for emerging private equity managers to ensure that they understand the relevant regulations in each jurisdiction where the fund may be operated.
6. A well-defined fee structure: Establishing a well-defined fee structure is critical for any fund and should be in place before the fund launches. This should include a breakdown of all fees associated with the fund, such as management fees, finders’ fees, profit participation fees, and performance fees.
7. A well-rounded team: Getting the right team in place, from legal counsel to fund administrators, is vital to the success of the launch. Having the right team members in place prior to launch will give investors confidence that emerging managers have a solid back-office foundation to meet their expectations.

By taking the time and effort to establish these components prior to launching their first fund, emerging private equity managers will be better positioned to attract investor interest and successfully launch their fund. For more information, please reach out to Joseph Jordan at jjordan@citrincooperman.com or Alexander Reyes at areyes@citrincooperman.com.