“The Time Is Now For Private Equity Spin Outs” by Isobel Markham of Private Equity International (PEI) featuring Eric Zoller
The alignment (for spinouts) comes from the realisation on both the LPs’ and the GPs’ part that this first fund as a new outfit is make or break. First-time teams need to lay down a meaningful amount of their own capital to prove to the market that they’re all in.
Eric Zoller, partner and co-founder at US-based placement agent Sixpoint Partners, pinpoints three drivers for spin-outs: the rise of recapitalisations; aging founders in firms “where the next generation of partners don’t feel like they have a seat at the table”; and firms pushing into a multi-strategy approach, which can leave one vertical feeling orphaned.
“The spin-outs of today are very different from the traditional emerging manager profile of [the] recent past in that they have established, overlapping investment teams with attributable track records and they’re deploying capital into proven strategies: the LPs can check boxes with them,” Zoller says.
The full article can be viewed on Private Equity International’s Website: PEI