If you haven’t raised a fund in a while, you may want to give some thought to working with a placement agent.
“A manager who’s been out of the fundraising market for a few years may not realize that the focus has shifted in terms of what people are asking questions about,” said Meredith Gendron, who was recently named a partner in the Boston office of placement agent Monument Group.
Gendron tries to compile fundraising materials that anticipate and answer 90 percent of investor questions before a fund even launches. “Some questions from consultants are very detailed,” she said. “If you’re starting flatfooted, you’re really at a disadvantage.
Of late, Gendron has seen an increased focus on operational due diligence. “Once investors have gotten comfortable with strategy, performance and teams, we see them digging more into back-office controls, procedures and compliance,” she said. She has also noticed more investors asking for disclosure on environmental, social and governance issues.
This year, Monument Group worked with Ecosystem Investment Partners to raise $303 million for Ecosystem’s third private equity fund, surpassing its $200 million target. In 2015, Monument Group helped CI Capital Partners close a $750 million fund at its hard cap and target.
As for the current fundraising environment, Gendron thinks there is still plenty of money to be found, but that firms need to earn their spot in an LP’s portfolio.
She stressed the importance of maintaining momentum during fundraising. “It’s really important to have an early close with existing investors,” she said. “It’s not just a stamp of approval. If you can hold a sizable first close, that starts to create the scarcity factor.”
Gendron was just three years out of Bates College when she started working at Monument Group over a decade ago.
“People say: ‘Fundraising is such a small niche and corner of the private equity and alternatives market, don’t you want to try something else?’ They think of it as a very focused and limited role,” said Gendron. “What they don’t appreciate is that working here has given me an opportunity to see so many different fund strategies and work with so many different teams. It’s given me a great window into a wide variety of alternative investments.”
Monument Group avoids working with competing managers, so at any one time, the firm is fundraising for a diverse set of investment pools.
It often invests in the funds it helps raise. “We think of ourselves as investors first,” Gendron said. That means conducting due diligence the same way a limited partner would, from making reference calls to benchmarking returns and tracking performance volatility.
Since its inception in 1994, Monument Group has raised $84 billion of equity for 75 alternative asset funds, a little over half of which are in private equity. In addition to its Boston headquarters, the firm has offices in London, Tokyo and Hong Kong.
Photo of Meredith Gendron courtesy of Monument Group