RIP: Proprietary Dealflow

If you’re general partner looking to raise a fund, here’s a little tip: don’t tell prospective investors to cut you a check because you get a lot of “proprietary dealflow.”
It’s simply not enough to differentiate yourself and LPs (not to mention reporters) wince at the platitude. “I think everyone concedes that every deal is intermediated” at some level, said Brian Gallagher, a partner at Twin Bridge Capital Partners. “Things are trending so much toward specialization.”

Indeed, perhaps the most popular buzzword at today’s PE Networking event in Chicago has been specialization. Shawn Wischmeier, CIO, Indiana Public Employee’s Retirement Fund, said one of his pet peeves are mid-market buyout fund managers with no “edge,” be it targeting a particular niche, geography, or other strategy. Mesirow Financial also finds that the most reliabe fund managers are those that target a particular sector, said Marc Sacks, Senior managing director.
Other LPs that expressed a preference for specialized funds included Irwin Loud, managing director at Muller & Monroe Asset Management and George Gaines,
partner at BerchWood Partners.