Advising emerging managers and raising first-time funds in private equity and private debt

^{Gabrielle Joseph, Managing Director – Head of Client Development, Rede Partners}

Gabrielle Joseph is Head of Client Development at Rede Partners. The firm provides primary fundraising, capital solutions, and strategic advice for private markets. Since it was established in 2011, it's raised €117bn for its clients. It employs more than 100 experienced professionals in London, New York, Hong Kong, and Amsterdam.

Gabrielle leads Rede's due diligence team and provides strategic consulting support to clients, focusing on positioning, message development, and strategic franchise development. She also leads Rede's market intelligence and client communications.

In the latest in our new series of Q&As about emerging managers, Shaun Beaney, Editor of Preqin First Close, speaks with Gabrielle about working with first-time funds, what investors are looking for, and GPs developing messages that cut through with LPs.

Why are emerging managers and first-time funds important clients for Rede Partners?

Working with emerging managers is a core part of our business. We maintain very deep, very trusted relationships with LPs right across the spectrum and right across the globe. They know that we come to them with what we believe is the best-of-breed GP in each niche. We want to show them we know the whole market. We think of it as three different areas – the first being big brand leaders. Then, specialist leaders. This is typically groups in the $500mn–3bn range, where the specialism might be geographic or sectoral – or it might be an investment style. And then, our third category is the hidden gems and emerging leaders.

We work not only with first-time funds and emerging managers, but also with hidden gem-type groups who are established, smaller, and delivering outstanding alpha – firms such as Valedo Partners in Sweden, like Wise Equity in Italy, and like Longship in Norway. Often, we're helping them to achieve premium economic terms. We're managing demand and helping them reach some interesting LPs.

Then there are emerging leaders. If you want to be ahead of the curve and find the very best options in each niche, you need to look right across the spectrum. You know often it's going to be something new and entrepreneurial that’s a best fit for the future and able to capture the market opportunity. We're completely committed to emerging managers as part of that strategy.

What have been your biggest successes among emerging managers?

Rede was established in 2011 and we've been working with first-time funds since very early in our history. So, some of those are no longer ‘emerging’. Two we've worked with since inception and now through to their third funds are Summa Equity and GHO Capital.

We’ve helped Summa think through their strategy, their whole purpose. The impact landscape has changed beyond recognition, and they've had exceptional success. But they're keeping their strategy sharp and well suited to the opportunity. Where should they be playing? Should they launch additional products? Should they expand their remit? Also, there are things like best practice for investor relations.

More recently, AshGrove Capital was the first first-time credit fund we’ve worked with. That was a fabulous story. We had to do all our diligence and pitching and negotiations completely remotely because it was all during the first half of 2020 – the first lockdown. It was a real feat to raise over €300mn for them. And we've already raised a second fund, which we closed in October, more than doubling the size, to €650mn.

There was also Vidia Equity in Germany, who raised €415mn. That was an interesting one, because it's focused on industrial decarbonization in the German Mittelstand. We were able to help them develop a cutting-edge, unique impact, measurement, and decision-making framework, as well as a reporting framework.

What are the advantages for investors in backing first-time private equity funds?

The selling points are that first-time funds are people who've had the opportunity to start from a blank sheet of paper and design a private equity strategy that’s going to be fit for the future, and that’s purpose-built to capture a certain opportunity. That is exceptionally attractive to LPs at the moment.

In particular, there's been an interesting rotation in LP attitude. There's an increasing willingness by LPs to look at building new relationships that can be really positive if you’re an emerging manager. Or, if you're a strong-performing and ahead-of-the-curve established manager, you can have a really strong fundraise, because you can benefit from LPs rotating away from existing relationships and toward you.

You can see it in the data from our Emerging Manager Survey and the Rede Liquidity Index. We’ve had some real flyers in the past year, such as Nordic Capital Evolution II, which closed at €2bn between Christmas and New Year, three months after launch.

Is how investors view smaller and emerging managers changing?

An awful lot of this is about the effects of the macro environment on the basic internal workings of buyouts. For quite a long time, we had very low interest rates, so leverage was very, very cheap. And we also had this kind of never-ending escalator of valuation multiples. We had very buoyant IPO markets. What that meant was that a sensible capital allocation strategy for an LP was to sink as much money as possible into a good-quality, large buyout fund relationship, because the bigger, the better.

When that started to change, the way managers made money in private equity had to change, too. It had to be more about skill in deal selection, operating, and value creation. Investors need to be looking at managers who are ahead of the curve – managers who are really focused on their specialist skill and competitive edge.

How does a new GP differentiate itself in the eyes of LPs?

You need to have a real reason to exist. Your typical first-time fund is a lot more developed now at the time when investors are starting to commit real capital to it, and managers tend to have a lot more specialist expertise already in house. They tend to have honed their strategy, so they've really looked at their track record in a lot of detail and matched up with where they see the opportunity set. And they've thought very carefully about precision, where they want to target, and how they're going to do it. They've thought hard about how they’ll build a business that's tailored to capture that opportunity.

What’s also important is the depth of positioning and storytelling, and the kind of articulation of the message by the fund within the market. LPs are looking for managers who have a real edge and who are able to meet the the future head on. You need your message to cut through.

What’s your outlook on private capital fundraising for the rest of 2025?

The availability of capital is moving rapidly. We're seeing new geographies coming online. We're seeing new types of investors, even within the classic geographies of Western Europe, with quite big new tickets. We're seeing rapid changes in what's going on in Asia, the Middle East, and Latin America.

Shaun Beaney is the Editor of Preqin First Close. It’s quick, easy, and free to subscribe here.

Preqin's created Fundraising now, a free hub that's packed with news, interviews, data, and research. You’ll also find there our series of Q&As on the subject, with investors, fund managers, and professional advisors around the world.

Special thanks to John Thompson at Burway.

_{The opinions and facts included in the above do not constitute investment advice. Professional advice should be sought before making any investment or other decisions. Preqin accepts no liability for any decisions taken in relation to the above.}