“Fundraising Explodes as LPs Crowd Into Mega-Funds” by Sam Sutton of Buyouts Magazine featuring Eric Zoller
Several sources said they expect fundraising for distressed investments to pick up in the next year. Rising interest rates, tighter lending markets and high valuations “are leading LPs to be defensive, so as a result more LPs are looking at more strategies that are deep-value, turnaround and distressed,” said Eric Zoller of Sixpoint Partners, an investment bank that acts as a placement agent for middle-market firms.
LPs also may increasingly turn their gaze to spin-out funds and first-time GPs as a way of forming bonds with next-generation managers. Several pensions, including the Arkansas Teacher Retirement System and the New York City’s Retirement Systems, set allocations for emerging and first-time managers in 2016.
“There’s been a lot of talk about … recapitalizations in the market, and zombie funds, and I think a small number of those funds are going through a re-birthing movement,” Zoller said, adding he’s seen several teams successfully extract themselves from defunct firms.
The full article can be viewed on the Pensions & Investments Website: P&I