Public Commentary: The guidance below reflects FG Capital Advisors’ experience advising new private-equity and private-credit funds. Figures are indicative and do not constitute investment advice or a solicitation.
Capital Raising for Emerging Fund Managers
First- and second-time fund managers face a “cold-start” dilemma: limited institutional track record, thin management-company balance sheets, and restricted marketing bandwidth. Yet LP appetite for differentiated alpha has never been stronger. FG Capital Advisors bridges that gap with a launch-to-close framework encompassing seeding, anchor negotiations, regulatory readiness, and staged capital calls.
Launch-Readiness Diagnostic
| Key Dimension | Institutional Expectation |
|---|---|
| Track-Record Attribution | Deal-level IRR, MOIC, and value-creation evidence from prior firm, verified by auditor or legal counsel |
| Team Depth | Minimum three senior investment professionals with complementary skill sets and carry alignment |
| Operations & Compliance | Independent fund administrator, SOC-1 controls, and SEC/host-regulator registration where applicable |
| ESG Framework | Policy and KPIs aligned to SFDR, TCFD, or PRI where relevant |
| Economic Alignment | GP commit ≥1 % of target fund size (cash or rollover of warehoused deals) |
Four-Step Capital Strategy
- Seed-Capital Solution (Months 0–3)
• Negotiation with strategic seeder or family office for US$10–25 million GP/LP stake.
• Terms: revenue share 10–20 % of management fees for 5–7 years; no carried-interest participation. - Anchor Investor Alignment (Months 3–6)
• Secure one or two institutional anchors providing 20–40 % of target size.
• Side-letter economics: fee step-down after hard-cap, co-invest rights, ESG reporting. - First Close Execution (Month 6)
• Minimum threshold: 40–50 % of target commitments to activate investment period.
• Draw first capital call for warehoused deals, demonstrating velocity. - Rolling Closes & Final Close (Months 7–12)
• Staged outreach to pensions, OCIOs, and fund-of-funds.
• Quarterly pipeline reviews; close out at target or hard-cap.
Cost & Economics Snapshot
| Expense Item | Typical Range |
|---|---|
| Legal (LPA, PPM, regulatory) | US$150 k – 300 k |
| Fund Administrator Setup | US$25 k – 50 k |
| Placement-Agent Retainer | US$8 k – 20 k per month |
| Success Fee | 1.5 – 2.5 % of capital raised |
| Operational Diligence | US$20 k – 40 k |
| Marketing Collateral & Travel | US$30 k – 80 k |
Regulatory & Compliance Timeline
Week 1 – 4
— Formation docs & SEC ADV draft (if U.S.)
Week 5 – 8
— Compliance manual, code of ethics, and cybersecurity policy
Week 9 – 12
— Reg-D filing, KYC/AML onboarding of first-close LPs
Governance Enhancements Valued by LPs
- Independent fund board or advisory committee with veto on conflicts.
- ESG & DEI policy with measurable KPIs reported semi-annually.
- Carry escrow to fund potential clawbacks or GP-fault indemnities.
- Side-letter parity framework to avoid MFN-driven fee erosion.
Engagement
Emerging managers preparing to launch their first or second institutional fund are invited to request FG Capital Advisors’ complimentary readiness scorecard and customised capital-raising roadmap.
This document is provided for informational purposes only. It is not an offer to sell or a solicitation to purchase any security or service. Independent professional advice is recommended before acting on any information herein.
