PE’s ‘stuck in the middle’ challenge and the wave of co-investors
Even as fundraising numbers remain sluggish, there are signs that things may be easing up a bit for GPs. Deal activity has gradually opened up, and this includes, to a lesser extent, exit activity. As GPs find exits, they will be in a better position to glean commitments from LPs.
What is curious, and perhaps a sign of a more systemic challenge, is this idea that right now there are a host of what would normally be considered ‘good firms’: well-established, decent track records, team stability, in the mid-market, that are essentially stuck. They are not able to raise close to their targets, and there doesn’t seem to be any momentum around their fundraising process.
It's this ‘stuck in the middle’ cohort that is really the prime example of the challenges of the fundraising market today. Numerous people I have spoken with in recent days and weeks remain optimistic that the market will open up again, and that these funds...