“Buyouts: First-time funds raised $25 bln in ’16, most since 2011: Preqin” by Sam Sutton featuring Eric Zoller

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  • More than 40 pct of LPs say they won’t back first-time managers
  • Debut funds raise $25 bln, up 16 pct
  • Average fund size, time to raise improve

Investor sentiment for first-time managers appears to be slipping even as fundraising numbers for debut vehicles are on the rise, according to a recent report released by data provider Preqin.

“As the presidential election showed us, you can’t always trust the polls,” said Sixpoint Partners Founder Eric Zoller. “There is an increasing amount of supply coming into the market.”

“Emerging managers and spinouts are increasingly being considered alongside established managers,” Zoller said. He added that many institutions have hired personnel or tapped consultants and fund-of-funds managers to specifically seek out emerging-manager commitments.

Preqin notes that larger investors like California Public Employees’ Retirement System established emerging manager program documents. Other major LPs, including New York City’s public pension system and Los Angeles Fire and Police Pensions, expanded their emerging-manager programs in recent years.