Maximising Fundraising Success in a Challenging Market – Partner Kirsty McDonald speaks at the London Private Equity Insights Event

We were delighted that GCP Partner, Kirsty McDonald, was invited to speak at this year’s London Private Equity Insights Conference, where she joined other senior figures from across the international LP and GP community to discuss how managers can raise capital successfully in one of the toughest fundraising environments in more than a decade.

Kirsty spoke alongside:

• Andrew Bush, Managing Director, Pantheon
• Ana Maria Harrison, Partner, Adams Street
• Sébastien Lecaudey, Senior Partner – Investor Relations, Antin
• James Varela, Partner, Rede Partners

With global private equity fundraising down around 30%, stretched fund closing periods now averaging well over 18-24 months, constrained exit options, and LPs facing liquidity and ‘denominator effect’ pressures, the panel examined how the market has shifted and what investors now expect.

Navigating today’s fundraising environment

Reflecting on over 20 years of experience in the lower mid-market, Kirsty noted that it has never not been difficult to raise funds, but with challenge comes a silver lining – driving discipline, evolution, innovation, and performance across the industry.

What it now takes to raise a fund

Kirsty believes that there is no “silver bullet” or single strategic lever to raise funds in the lower mid-market today. Instead, she believes managers must excel across all fundamentals – taking nothing for granted and combining a stellar and well-articulated performance track record with a best in class Investor Relations approach.

Within this, she emphasised the importance of a distinct positioning and clear “right to exist” that is consistent across all discussions, materials and interactions, in order to secure LP attention, momentum and ultimately commitments.

Areas of focus for LPs

Drawing on GCP’s recent fundraise, Kirsty observed several shifts in LP appetite, each of which gives rise for cautious optimism amongst top performing GPs:

• Renewed positivity around the UK, with Brexit concerns having largely faded
• Growing interest in lower mid-market managers who offer clear, proven, repeatable routes to value creation without financial engineering, and more ready options for liquidity
• More willingness to evaluate new managers, with existing relationships being heavily scrutinised

GCP’s outstanding track record on DPI resonated strongly with LPs – evidencing investors’ well publicised switch in priority from IRR towards DPI – and Kirsty also noted a sharper due diligence focus on replicable value creation capabilities and relatively less on deal sourcing.

Lessons for GPs preparing to raise

Kirsty concluded by noting that timing proved a crucial factor in the success of GCP’s latest raise.

With investors often preferring to wait, a regular flow of “good news” updates, extensive pre-marketing, a well prepared dataroom and information, and the discipline, patience and support to plan and execute a short, deliberate fundraising window are key.

Kirsty recognised that all these factors contributed to driving momentum for GCP, enabling genuine scarcity value to be created and ultimately, an exceptionally fast and positive fundraise to be concluded.

GCP Fund VI

Earlier this year, Kirsty led GCP’s most recent fundraise to a highly successful conclusion. GCP Fund VI closed at £411 million, oversubscribed at its hard cap, with a first and final close just three months after launch.

The fund attracted strong backing from both existing and new investors, reflecting confidence in GCP’s strategy, track record and systematic approach to value creation across the Knowledge Economy. Fund VI exemplifies the very principles of a successful fundraise discussed on the panel – consistently outstanding performance, particularly DPI; clarity of positioning; rigorous preparation; and the power of well-timed momentum.