Private equity fund raising is an intimidating (but essential) part of starting up a new investment company. The best way to leverage your network is to use it operationalroom.com/how-virtual-data-rooms-benefit-private-equity-fund-raising-deals as the best method of finding an LP to achieve your target of committed capital, but this requires deliberate managing relationships using the appropriate procedures and tools.

For a private equity firm, LPs are the investors who support your fund with committed capital. They are typically large institutional investors such as pension funds, endowments, and mutual funds. Sometimes they are wealthy family offices or wealthy individuals seeking a return on their investment in a private equity. Also, some LPs are funds-of-funds with the ability to invest in a variety of private equity funds. They can help you build a diversified portfolio of alternative investments.

You must meet a set of requirements in order to be a LP. LPs are looking for an investment strategy similar to yours, as well as a track record of a similar strategy, and the commitment. They will also want you to have a clear understanding of how your fund works and be able to explain the reasons why it is worthwhile to invest in.

It's a good idea to let your legal team draft the offering memorandum, as well as partnership terms before you actively look for potential LPs. It is also a good idea to evaluate the capabilities of your internal investor relations department and think about enlisting the assistance of an agent for placement.