Takeaways from the Unigestion Emerging Manager Conference on Tour
We are continuing to see increased momentum in private equity spinouts and first-time manager launches. That theme came through strongly at Unigestion’s Emerging Manager Conference on Tour in London last week, where discussions reflected a broader shift in how talent, incentives and opportunity are evolving across the market.
Why spinouts are increasing
Consolidation in private markets means many of the top GPs of the last cycle have been absorbed into bigger platforms. At the same time, incentives for dealmakers are perhaps not as compelling as they once were. Carry can become more diluted and GP stakes deals can leave strong investors feeling under-rewarded despite often being the ones with the best track records.
Further, as LPs look for specialist strategies, sector-specific teams are increasingly being incubated within larger organisations before spinning out independently.
Why LPs continue to back emerging managers
For LPs, the attraction is clear: the data shows that emerging managers outperform established players, in particular those with specialist rather than generalist strategies.
Unigestion’s proprietary research suggests that specialist managers return commitments to investors in just over four years compared with closer to seven years for generalist strategies, with TVPI around 2.14x versus approximately 1.74x respectively.
For LPs who back these managers early, there can also be lasting strategic value through relationships that deepen as firms grow, for example with first rights on future co-investment opportunities and often a near guaranteed LPAC seat. As one speaker put it, “they never forget you.”
What drives outperformance
The delta is not the result of multiple arbitrage. “There is no such thing as proprietary deal flow”, according to one GP, and so these spinouts are not simply buying cheap. More often, it comes from deep sector expertise and intensive asset management.
Building the right platform from day one
For emerging managers, however, investment capability is only part of the story. The operational and regulatory platform behind the strategy must also withstand LP scrutiny from the outset.
At Langham Hall, we support spinout and start-up managers from inception, helping them build the operational and regulatory platform investors expect as they launch and scale. That includes regulatory hosting, fund administration and direct access to experienced senior practitioners from day one.
As the market continues to evolve, specialist spinouts and first-time managers are likely to remain an important source of opportunity across private equity. For managers preparing to launch, success will depend not only on the quality of the investment thesis, but on the strength of the platform built around it. That is where experienced operational support can make a meaningful difference from the outset.
