Give to some investors a special place within the fund

The manager must concentrate his efforts on a few investors, particularly the anchors investors and blue chip investors . By attracting these special investors, the manager knows that he will save precious time: their presence, because of their specific qualities or the amount of their investment, will contribute to the conviction of the undecided. The manager must have a specific strategy for them. One of these strategies is to give them a prominent place in managing the fund.

In order to convince potential investors, the manager can grant a handful of them a place in their investor committee. This seat on the board will not only flatter its incumbent, who is honored to be consulted on the main orientations of the fund, but also reassure the hesitant investor and strengthen the relationship with it.

The place within this committee will reassure the investor. If he hesitated to invest because he was suspicious of the manager's choices, he will exercise greater vigilance from his seat. Admittedly, he should not benefit from a right of veto on investment decisions, but his opinions will have resonance. The manager will have to double his efforts to justify his choice. Under pressure from other investors, he may even be forced to abandon his original idea. The investor will then have had a decisive weight thanks to his seat.

Having a head office gives investors a more general power of control: they will ensure that the subscription period, the investment period or the fund period do not overflow. He will have the opportunity to vote in the event of a conflict of interest or on any strategic question posed by the manager.

Finally, during meetings of this board, the members will meet each other, thus offering an opportunity to establish useful relations with other investors. The place on the committee will have quite appreciable externalities for the investor, in particular those wishing to better integrate into an ecosystem.

Having a place on the investor committee will be very valuable for some investors, especially for professionals. The latter seek to establish a relationship with the manager, in order to follow the evolution of the fund as closely as possible and to be the first to know useful information. Indeed, this relationship will give them access to co -investment or secondary opportunities . A place will certainly be reserved for them in the management company's next fund. The stronger this relationship, the more the investor will hope to obtain advantages, in particular on fees. The relationship would become dependent: the manager can no longer do without his investor, he must grant them significant advantages.

If the board starts to get too much in demand, the manager can offer one or more observer seats. The latter participates in the committee, without being able to take part in the vote. Well-informed investors are sure to take their place around the table, even as observers.

Enhanced Transparency in a Side Letter for Private Equity LPs is a contractual agreement between the LP and the general partner that outlines the information the general partner must provide to the LP regarding the private equity fund. This may include details such as fund performance, fees, expenses and any other relevant information the LP needs to make an informed decision about their investment.

In addition to the investors' committee, the manager can be creative and invent various bodies participating in the management of the fund: some managers, to reassure on the occasion of their first fundraising, have created investment committees to vote on each investment decision. 'investment. Others have set up ethics committees on issues of combating discrimination or reducing the carbon footprint.

Finally, the manager can offer some of his investors a steering role in the portfolio companies. Whether the strategy is majority or minority, the fund will in principle have a say in the management of its holdings. The investor could be placed on the board of directors or even at the head of the company or one of its departments. This advantage may attract investors with an industrial or entrepreneurial profile, more than more passive investors such as pension funds.

The manager must get to know the profile of each of his potential investors, in order to present them with the corresponding advantages. There will be those sensitive to supervision, others to the ecosystem, others to active participation on certain themes, while still others will only look at financial returns. They will have to be offered other types of benefits.