Find an anchor investor

The anchor investor, or the major investor, will be a key element in your fundraising strategy. By committing financially, perhaps even beyond that, it will give traction to your fund likely to facilitate your fundraising.

In principle, investors do not want to be too exposed on the same fund. Investment funds are primarily used to pool the financial resources of a variety of investors, in order to dilute their risks and multiply equity investments. The investor chooses to place his money in a fund, rather than investing alone. He therefore does not want to be the only or even the main investor in the fund. Exceeding a holding rate of 10% already marks significant risk-taking for an investor. Few investors will want to cross this threshold.

Not only does he trust the manager to make better decisions, but he also expects to represent only a fraction of the invested funds. If an investor had only wanted to benefit from the skills of a manager, he would have entered into a management contract with this manager. Its choice of an investment fund is also based on pooling financial resources.

In the largest funds, the median holding rate is well below 1%. These funds sometimes host hundreds of investors. The manager would however have an interest in obtaining larger amounts invested per investor. The time and money allocated to fundraising would be much less. If his fund had only a dozen, or a few dozen investors, the fundraising and therefore the deployment would be faster.

By convincing their investors to invest more, the fundraising target can be more easily achieved. Failing to obtain larger amounts per investor, they can concentrate on a major investor, this one could go so far as to become the anchor investor.

Attract large investors

This investor will go against the investment logic of other investors. Mutualization and its own dilution will not be decisive arguments for him. He takes an unusual risk by exposing his money to a single fund. If the fund does not keep its promises, it could lose significant sums.

The manager will have to convince his anchor investor differently: because this investor stands out from the cohort of investors for the benefit of the manager, the latter can grant him advantages that other investors will not benefit from ( board seat , reduction in management fees , carry shares, co - investment opportunity, secondary opportunity, etc.).

When SoftBank Vision Fund raised $100 billion for the largest venture fund in history, its anchor investor was none other than the prince of Saudi Arabia. The latter paid him 45 billion, or 45% of the total amounts committed. Finalizing the fundraiser will have been child's play with such a contribution.

Indeed, the significant investment of the anchor investor will help the manager convince other investors. These will be reassured about their dilution, given the sums already raised. They no longer have to worry about being over-invested in a fund that is not achieving its objectives. In addition, this unusual risk-taking lends credibility to the manager's strategy. If an investor is willing to take so many risks, the little ones can invest with peace of mind.

The anchor investor must be a player with deep pockets. It can be a bank, an insurer or, for smaller funds, family offices or wealthy individuals. In principle, the funds of funds will not be able to play this role, insofar as they have ratios to respect, the respect of a weak influence is important for them.