Why ‘smoke and mirrors’ won’t cut it during fundraising
Abbott Capital managing director Young Lee and Ridgemont Equity Partners managing partner Jack Purcell discuss the challenging private equity fundraising landscape, contrasting LP and GP perspectives on fund size expansion, valuation marks, and operating partners. They also explore the critical importance of disciplined portfolio construction, codified succession planning, and middle-market opportunities in a post-ZIRP environment.
- Distributed to Paid-In capital (DPI) has displaced internal rate of return (IRR) as the primary allocator metric because cash distributions remove accounting subjectivity. Read →
- Young Lee of Abbott Capital warns that institutional LPs increasingly view operating partner benches as fundraising smoke and mirrors rather than genuine value drivers. Read →
- Abbott Capital advises pacing capital deployment evenly across four-year cycles because vintage year returns vary more widely than manager selection. Read →
- Junior dealmakers still hold out for 3.5x returns on assets where senior partners and institutional LPs prefer liquidating at 2.5x to lock in DPI. Read →
- Young Lee of Abbott Capital argues LPs view fund size increases with skepticism because doubling capital while doing the same 10 deals forces GPs into different sourcing channels and breaks their operational toolkit. Read →
- Abbott Capital walks away from private equity firms delivering 3X returns if the founding partners fail to build a formalized, institutional succession model. Read →