What is a fundless fund?

As a business owner, its sounds like you wouldn’t like to sell your business to a fundless fund.

Right?

Wrong. Lets explore why.

A fundless fund, also known as an independent sponsor, sources and negotiates transactions before securing capital from investors on a deal-by-deal basis after securing a target. Independent sponsors offer several advantages over traditional funds with committed capital, including that they’re:

1.???? highly motivated to close transactions, with reputation and compensation directly tied to successful deal execution.

2.???? typically possess deep industry expertise, enhancing their credibility and understanding of the target sector.

3.???? focused and flexible, unencumbered by rigid investment mandates associated with committed capital funds.

Private equity investors often favour independent sponsors as they can deploy capital on a deal-by-deal basis without committing funds to a blind pool or maintaining capital on call.

Our firm has success engaged and completed transactions with a number of independent sponsors. Gaining insight into their capital partners early in the process is critical to gaining the confidence to move forward.

Have you seen more activity with fundless funds?