THE GUIDE TO FUND PLACEMENT SPECIALISTS

FOURTH EDITION An essential companion and directory for raising alternative investment funds

Published in February 2012 by PEI Second Floor Sycamore House Sycamore Street London EC1Y 0SG United Kingdom Telephone: +44 (0)20 7566 5444 www.peimedia.com 2012 PEI ISBN 978-1-908783-03-5 This publication is not included in the CLA License so you must not copy any portion of it without the permission of the publisher. All rights reserved. No parts of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means including electronic, mechanical, photocopy, recording or otherwise, without written permission of the publisher. Disclaimer: This publication contains general information only and the contributors are not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional adviser. Neither the contributors, their firms, its affiliates, nor related entities shall be responsible for any loss sustained by any person who relies on this publication. The views and opinions expressed in the book are solely those of the authors and need not reflect those of their employing institutions. Although every reasonable effort has been made to ensure the accuracy of this publication, the publisher accepts no responsibility for any errors or omissions within this publication or for any expense or other loss alleged to have arisen in any way in connection with a readers use of this publication.

PEI editor: Helen Lewer Production editor: Julie Foster Printed in the UK by: Hobbs the Printers (www.hobbs.uk.com)

Contents

Fund placement specialists: Index of companies listed in this extensive, global directory Introduction
SECTION I: IN-DEPTH CHAPTERS

vii

ix

A strong, safe pair of hands

By Mounir Guen, MVision Private Equity Advisers 2011 what a year The outlook for 2012

1 3 3 4 7 7 8 8 10 12 13 15 15 17 19 21 21 21 22 22 23 23 24 25 27 28

Navigating troubled waters

By Bruce Chapman, Threadmark The Tempest returns? How severe a storm? Ingredients for success Optimising prospects in a challenging environment Seeking an alternate path Conclusion

Placement agents in an age of uncertainty

By Hussein Khalifa, MVision Private Equity Advisers The efficiency of third-party fundraisers Placement agents: the many shapes and sizes Ingredients of a good agent

Placement agents: A Darwinian tale

By Christophe G. de Taurines, Capital & Marketing Group Introduction What is a placement agent? How do placement agents work? A tougher fundraising market Lower revenues Increased regulation Considerations for a placement agent to address The changing dynamics of real estate fundraising What should the placement agent do to ensure survival? Conclusion

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Asia and the current fundraising environment

By David Arasnath Kimis, First Avenue Introduction Common trends among Asian investors Fundraising environments in key Asian countries Conclusion

29 29 29 30 36 37 37 40 40 41 41 42 42 43 44 44 45 46 46 47 48 48 49 49 50 51 51 53 53 53 53 54 54 54 55 56 56 57

What to expect from a placement agent

By Kelly DePonte, Probitas Partners The roles placement agents play Split mandates, top-offs and restarts Types of agents Regulation and disclosure Friends and family fundraisings The role of secondaries in the fundraising process Fee for services and alignment of interests Maturation of the market: the rise of internal IR professionals Who is the client? Summary

The Ten Rs of choosing and hiring a placement agent

By John Barber, Bridgepoint Reach Relationships Record Rigour Rapport Regulation Responsiveness Restraint Robustness Remuneration

Placement agents terms of engagement

Cindy Valentine and Liz Judd, SJ Berwin LLP Introduction Parties Scope of services Exclusivity Key-man provisions Representations, warranties and undertakings: impact of pay-to-play legislation Fees and expenses Sunset clause Expenses Term and termination

iv

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Indemnity Confidentiality and announcements Conclusion

57 57 58

Presenting the proposition: Planning and executing the fundraising

By Janet K. Brooks and Bart J. Molloy, Monument Group Planning and preparation pay off Executing the plan Approaching the closing After the closing Final thoughts

59 60 63 66 66 66

SECTION II: FROM THE PRIVATE EQUITY INTERNATIONAL ARCHIVES 69

Triago exec to launch own firm

By Hsiang-Ching Tseng, Privateequityinternational.com

71

In the market
By Privateequityasia.com

73

Fundraising, the universe and everything

By Robin Marriott, Perenews.com

75

Wheres my placement agent gone?

By Privateequityinternational.com

79

NY moves for permanent placement agent ban

By Jenna Gottlieb, Privateequityinternational.com

81

FEATURE: Real estate sentinels

By Zoe Hughes, Perenews.com

83

Cuomos pay-to-play saga comes full circle

By Privateequitymanager.com

89

CalPERS to run placement fee audits

By Graham Winfrey, Privateequityinternational.com

91

Courting California
By Jenna Gottlieb, Privateequityinternational.com

93

California placement agent bill becomes law

By Jenna Gottlieb, Privateequityinternational.com

97

SEC approves ban on unregistered placement agents

By Christopher Witkowsky, Privateequityasia
v

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SECTION III: THE SURVEYS

Among the most revealing barometers of attitudes towards fund placement specialists, Private Equity Internationals LP and GP surveys (2011/12) present a detailed analysis of how placement agents are perceived by alternative asset class investors and fund managers and what role they are likely to play in fundraising in the years ahead

101

Introduction LP survey 2012 GP survey 2012

SECTION IV: THE DIRECTORY
Private Equity Internationals definitive directory of whos who in the world of fund placement across the alternative asset classes

103 105 113

121

About PEI

182

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Fund placement specialists: Index of companies listed in this extensive, global directory
3CF Acanthus Advisers Almeida Capital Alternative Investment Source Ariane Capital Partners Atlantic Bridge Atlantic-Pacic Capital Augmentum Advisors AXON Partners Beacon Hill Financial Benedetto Gartland & Company Bentley Associates BerchWood Partners Bernard Feshbach Blue Sand Securities Boomerang Capital Boyd & Co Bridge 1 Advisors Bridgewater James Brittany Capital Group Butler Capital Investments Camelback Group Campbell Lutyens Candela Capital Capital & Marketing Group Capital Alliance Partners Capitalvest Capstone Partners Carver Cross Securities Champlain Advisors Chatsworth Securities LLC
vii

123 123 124 124 125 125 126 126 127 127 128 128 129 129 130 130 131 131 132 132 133 133 134 134 135 135 136 136 137 137 138

Citi Alternative Investments CMI/Capital Market Investment Cogent Alternative Strategies Continental Capital Partners Credit Suisse Private Placement Cue Capital Cygnus Capital De Luna Partners Denning and Company Diamond Edge Capital Partners Eastdil Secured Eaton Partners ECMG ELK Capital Advisors Far Hills Group Farragut Capital Farrell Marsh & Co. First American Fund Services First Avenue Fitzgibbon Toigo Associates Foreside Fund Services Fortress Group Forum Capital Partners Gladstone Securities Global Private Equity Gold Bridge Capital Greenhill & Co Grifn Financial Group Guggenheim Private Fund Group Hamilton Miller Investments Harken Capital Advisers LLC

138 139 139 140 140 141 141 142 142 143 143 144 144 145 145 146 146 147 147 148 148 149 149 150 150 151 151 152 152 153 153

Fund placement specialists: Index of companies listed in this extensive, global directory

Harvest Group Securities HFF Securities Hudson Partners Group International Private Equity Limited JP Greene & Associates JT Partners Klitzberg Associates Knight Capital Partners Konomi Lancea Partners Liability Solutions M3 Capital Partners Macquarie Capital Advisors Magog & Cie Mallory Capital Group Mediobanca Mercury Capital Advisors MNB Nick Beteiligungen GmbH Monument Group Morgan Stanley Global Financial Sponsors Group MRAG Projekt GmbH & Co KG MVision Private Equity Advisers Nelcap Advisors Neuberger Berman North Bridge Capital Park Hill Group Prevail Capital

154 154 155 155 156 156 157 157 158 158 159 160 160 161 161 162 162 163 163 164 164 165 165 166 166 167 167

Principle Advisory Services Probitas Partners Quince Hill Partners Rivarche Capital Rock Lake Associates Rowe Capital Partners Sixpoint Partners Somerset Capital Source Capital Group Stable Capital Advisors Stanwich Advisors StoneGate Partners Thomas Capital Group Threadmark Touchstone Capital Touchstone Group Trailhead Capital Transparent Capital Triago Trinity Group Troy Investment Associates

168 168 169 169 170 170 171 171 172 172 173 173 174 174 175 175 176 176 177 177 178

Lazard Private Fund Advisory Group 159

UBS Investment Bank Private Funds 178 Group Venture Advisers Veritage Group Whitman and Co. XT Capital Young America Capital 179 179 180 181 181

William Blair Funds Placement Group 180

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Introduction

Welcome to the fourth edition of The Guide to Fund Placement Specialists a unique handbook for fundraisers and investors active in alternative asset classes. Against the backdrop of the Global Financial Crisis, a challenging fundraising environment and a changing regulatory landscape, this publication looks at the impact on placement agents and the general partners (GP) and limited partners (LP) that use their services. It tackles the key questions and concerns for 2012: what factors make a good placement agent; what is the key to a successful fundraise; how is the role of the agent changing; has the pay-to-play scandal in the US had a negative impact on how GPs and LPs perceive agents? In Section I, a series of in-depth chapters offer incisive commentary from leading names in placement agent and fundraising circles on the value agents bring to the capital-raising process and how their role is likely to evolve in 2012 and beyond. In the opening chapter, Mounir Guen of MVision Private Equity Advisers suggests that GPs with the support of a good agent are likely to fare better in a climate where investors are becoming more discerning and demanding. Bruce Chapman of Threadmark offers an expert view of the essential qualities investors are seeking in their fund managers in 2012 and suggests useful tips for achieving a successful fundraising. The different types of placement agents available and how each one serves contrasting client needs is the subject of the chapter by Hussein Khalifa of MVision Private Equity Advisers. He also addresses the rise of the in-house investor relations expert and considers whether they really are a threat to the survival of the traditional placement agent model. Christophe de Taurines of Capital & Marketing Group writes about the Darwinian forces that challenge the survival of placement agents with a specific focus on the private equity real estate market, and outlines how agents can change and adapt their businesses in order to survive and remain competitive. In a brand new chapter for this edition, David Arasnath Kimis of First Avenue examines fundraising opportunities and trends in Asia, and presents an informed outlook about how active investors in different Asian countries are likely to allocate to alternative investment funds in the near term. This chapter is vital for anyone thinking about fundraising in this increasingly important region. Kelly DePonte of Probitas Partners looks at the various roles placement agents can play in the fundraising process and what LPs and GPs can expect from an agent, all against the backdrop of the rise of the in-house investor relations professional and the changing regulatory landscape. DePonte also discusses how sophisticated pricing regimes are replacing standard compensation structures as the market matures. John Barber of Bridgepoint offers invaluable insight into how to choose and hire a placement agent
ix

Introduction

and details the Ten Rs that clients should consider ranging from relationships, to robustness and to remuneration. In each case, he lists practical questions that should be asked, or at least considered, when assessing a placement agent. Anyone unsure what a contractual agreement with a placement agent should look like must read the chapter written by Cindy Valentine and Liz Judd of SJ Berwin LLP. It sets out clearly the important terms and conditions youll come across and, crucially, the new legal terms that have arisen out of the US pay-to-play scandals. Further detailing the process-services clients can expect to receive from their placement agents, Janet K. Brooks and Bart J. Molloy of Monument Group explain how to plan and to execute an effective fundraising process. They explain that some of the most successful placement agents not only play meticulously detailed roles in the early stages and actual fundraising stages, but they also commit to providing valuable service even when a fund has been closed. Section II of the book delves into the Private Equity International archives to present insightful news and analysis stories written by our team of dedicated journalists tracking trends in the placement agent business and fundraising between 2010 and 2011. In Section III, the findings of two extensive surveys, conducted in November 2011, reveal what GPs and LPs really think about placement agents, how often or whether they use them, if they plan to use their services for future fundraises, and how much, if at all, the pay-for-play scandal in the US is likely to shape whether fund managers and investors will be happy to make use of placement agent services. Section IV provides a comprehensive Whos Who directory of over 115 placement agents operating worldwide in private equity, infrastructure, hedge funds, and private equity real estate. While a placement agents inclusion in the directory of this edition is not meant to substitute the need for a clients own due diligence of a prospective agent, PEI has permitted entry in the directory to those full-service placement agents that perform a broad range of professional services for clients and investors. We at PEI hope you find this guide to be of practical use to your business whether your role is as an investor, a fundraiser, a placement agent or other interested participant. n Helen Lewer PEI