Spare Some Change? No? God Bless.

Just how generous are limited partners these days?

Depends on who you ask. But industry insiders say that LPs are becoming more selective about who they do business with even as they continue to plow loads of capital into private equity funds. Firms hitting the road with their hands out would do well to remember that.

“Some LPs are dissatisfied with [the] private equity sector and are seeking exits from their positions,” a partner at a New York fund placement agent wrote in a recent internal memo. The current trend indicates bifurcation of the general partner market “into branded ‘haves’ and ‘have nots’ who struggle to raise capital.” Combined with a squeeze on allocations, the memo said, fundraising right now is a zero-sum equation where one GP’s gain is another’s loss.

Wait a sec. Don’t we hear all the time about the popularity of private equity among investors? Didn’t Coller Capital’s latest private equity report say that over a third of LPs (38%) are planning to increase their allocations to private equity over the next year—way more than the 3 percent of respondents who say they plan a reduction?

Yes, but many of them are in “re-up only” mode, a trend the New York partner noted in his memo that has been echoed by others in the placement business. Those LPs that aren’t immediately re-upping are looking for longer-term relationships (leading to eventual re-ups) rather than seeking out faddish funds that may give high returns but are probably one-and-done affairs.

Michael Sotirhos, a partner at Connecticut-based placement agent Atlantic-Pacific, said that some firms try to jam opportunities down too many of their LPs throats on the road show, instead of “recognizing the holes in their portfolios” and honing the pitch to fill those gaps. Firms should also be mindful of the dreaded “strategy drift”—a tendency in unsteady markets to stray into unaccustomed areas. It can scare investors away.

Two other placement agent partners said that “middle-market” is spanning a larger section of private equity shops than it has before. “That makes differentiation on the product, rather than the firm or the individual selling it, more important,” one added.

If you’re looking for the take-away, there it is: less swinging for the fences, more judicious persuasion on road shows. I wouldn’t have guessed it on my own, but apparently it’s a mistake partners often make.

If anyone has anecdotes about other ways partners are likely to screw up when they’re in fundraising mode, making pitches, leave it in the comments section below, or better yet, shoot me an email at andrew.scurria@thomsonreuters.com. I swear on my keyboard to protect the names of the innocent, and the guilty.