This series looks at how Preqin tools can help you raise capital and target investors. In part one, we looked at how our investor data allows you to find those investors most likely to suit your vehicle – but, as well as finding investors yourself, Preqin helps investors find you.
Vying for Visibility
Less than 10% of investors rely only on being approached by fund managers pitching their vehicles. Almost three-quarters use a mix of internal sourcing and external approaches, while one in five depend exclusively on their own discovery methods. In those circumstances, your fund must be visible where investors will conduct their research – places like Preqin.
When interviewed at the end of 2017, investors across all asset classes said that when they screen new funds for investment, they look for similar factors: a proven track record, experience with the fund strategy and commitment from the fund manager. Rather than comparing multiple fund pitches, more than 6,500 investors use Preqin to filter funds that meet their criteria.
Fund managers that submit their data to Preqin are therefore more likely to be discovered by investors seeking vehicles like theirs. Beyond that, being included on our platform can bring high-profile visibility. Publications like Barron’s and the Financial Times use Preqin data to compile and publish lists of top performing funds. Preqin also releases its own annual performance report, the Alternative Assets Performance Monitor, which is read by thousands of allocators around the globe.
Preqin does not just enable you to find investors that might want to invest with you – it also tells you about the service providers they use. While some of the largest investors have brought their allocation processes entirely in house, the majority still rely on investment consultants to advise them on potential opportunities. As such, being able to see and be seen by consultants is critical to your fundraising process.
Equally, funds of funds are some of the most active users of Preqin data, accounting for between a third and half of all fund searches. Our data allows you to see when funds of funds launch new vehicles, issue new searches or update their preferences. Service providers and intermediaries are among the most active users of Preqin data, and being able to find, appraise and contact them can make the difference between a drawn-out fundraising process and a successful one.
Managers that subscribe to and engage with us are proven to raise more capital than their peers: seven of the 10 hedge funds recording the largest inflows in 2017 are Preqin subscribers, as are 19 of the 20 private equity firms that have raised the most capital over the past 10 years.
This applies not just to the largest fund managers: overall, hedge fund managers that subscribe to Preqin raised 3x as much capital as non-subscribers in 2017, while private equity clients raised twice as much capital as all other fund managers in the asset class.
Preqin is the home of alternative assets and we act as a hub for fund managers and investors alike. Our databases allow you to find potential investors, and enable investors and service providers to find you. But, after initial screening, you will still need to pitch your client – in the third and final part of this series, out on Friday, we look at the tools that can help you tailor your pitch and maximize your chances of success.