Chapter 7

LP Targeting

LP Targeting: Family Offices to Fund-of-Funds

LP Archetype Segmentation: Decision-making, timeline, check size
Family Offices as Primary Channel: 3-5 month diligence vs. institutional 12+ months

Raising your first or second fund in 2025-2026 means matching your story to the right LP archetypes and sequencing outreach for speed. Family offices value agility, founder access, and customization; they decide in quarters, not years, and often want clear co-invest plumbing and pragmatic side-letter terms. Fund-of-funds and emerging asset manager platforms (often $250k–$1M) exist to back new talent; win them with clean attribution, a repeatable sourcing engine, and ILPA-style reporting samples. High-net-worth individuals, especially operators in your sector, move fastest when the path is simple, feeder platforms can drop minimums to $25k–$100k and standardize onboarding. Institutions (endowments, pensions, DFIs) typically require $1M+ tickets and 12–24 months of diligence; plan for them, but don’t anchor your first close on them unless you already have traction.

Private wealth is the growth channel: feeders in the US and ELTIF 2.0 in the EU broaden reach through RIAs and distributors, albeit with longer setup. Your first 90 days should prioritize landing 1–2 anchor LPs with modest economics, co-invest priority, and willingness to serve as a reference. Build a 200+ prospect list, qualify by mandate and EM appetite, and run an ILPA-aligned data room so diligence is plug-and-play. The goal: compress time-to-first-close by matching each LP type with the proof they need to say “yes” fast.

LP Archetype #1: Family Offices (typical check: $50k–$250k; can scale higher)

Why family offices often prefer emerging managers

Family offices prize speed, direct access to founders, and the ability to tailor mandates, exactly where emerging managers shine. What wins them over is not a glossy pitch deck but specialist edge plus access: a clear niche (e.g., Medicaid-adjacent digital health, AI-enabled industrials), a visible sourcing engine (warm intros/month, conversion to IC), and a co-invest pathway that lets them lean into your best ideas without paying full-fee/ full-carry on every dollar. Show how you customize reporting (one-page quarterly highlights, KPI snapshots) and how you’ll engage principals (portfolio roundtables, customer councils, board-ready talent).

Multi-generational decision dynamics you must navigate

Plan for three constituencies and speak each one’s language:

Gen 1 (wealth creator): lead with capital preservation, governance, and relationship trust. Bring a simple risk dashboard (exposure limits, reserves, downside cases) and explain how you avoid style drift.
Gen 2/3: emphasize themes and networks, why your thesis is timely, how your community produces proprietary deal flow, and what operating playbooks you run post-check.
Professional staff: give them an ILPA-ordered mini-DDQ, your valuation/conflicts/cyber policies, and a service-provider calendar (admin, audit, tax) so they can underwrite operating maturity quickly.

If you show each group exactly what they need, trust, growth edge, and controls you shorten the internal consensus cycle.

Streamlined diligence

Treat the process like a project plan:

Month 1: first meeting, NDA, VDR pre-NDA folders (00–02), referenceable founders.
Month 2: deep dive (Track Record 03, Policies 04), calls with your admin/auditor, light legal.

Month 3–4: terms discussion, co-invest/side-letter drafting, Ops walk-through (capital calls, reporting mock).
Keep a one-page timeline in your VDR and a Q&A log so staff don’t re-ask questions.

Co-invest and side-letter preferences

Create a Co-Invest Process Note: sourcing → allocation criteria (ownership thresholds, conflict checks) → data room timing → decision SLAs (e.g., 5 business days) → closing mechanics. For side letters, list operationally feasible items: reporting cadence, audit timing notices, most-favored-nation (MFN) inclusion, information rights consistent with your sub-line/financing. Add a simple MFN tracker so nothing slips.

Outreach that actually works

Lead with warm intros (founders, CEOs, portfolio angels, other GPs). Your first email should include:

a one-page thesis (why you/now/strategy);
an ILPA-ordered mini-DDQ (2–3 pages);
two dated caselets showing your intervention and outcome;
a link to a VDR with watermarking and access logs (pre-NDA folders only).

Targets & list-building

Define the band: focus on families in the $10M – $150M AUM range for Fund I/II; they can write $50k–$250k checks and move without multi-layer ICs.

Assemble the list (200+ names): pull family offices and RIAs from purpose-built databases; enrich principals on LinkedIn; map warm paths through founders and co-invest partners.

Qualify fast: tag each record with mandate fit (sector/stage/geo), EM appetite (prior first-time funds), co-invest interest, and decision lead (principal vs. staff).

Work the sequence: week 1 warm intros, week 2 first meetings, week 3 data-room access, week 4 operator session, week 5-6 terms.

LP Archetype #2: Fund-of-Funds (FoFs) & Emerging-Manager Platforms (typical check: $250k–$1M+)

Fund-of-Funds & EM platforms

FoFs and EM platforms are set up to find, underwrite, and scale new managers, it’s literally their job. They bring institutional-grade diligence (ODD checklists, reference networks, data requests), can sponsor early operations (hiring, admin selection, audit cadence), and sometimes open co-invest lanes to help you concentrate best ideas. Think of them as a combined validator + distribution partner: if you pass their bar, they’ll often speak to other LPs on your behalf.

Who does this at scale

Examples with public, repeatable EM programs include GCM Grosvenor’s Elevate (seeding/emerging manager strategy), Recast Capital (seed LP + enablement for diverse GPs), and Screendoor (backing first institutional VC funds with GP mentorship). They prize three things: attribution clarity (who did what, backed by references); a sourcing wedge that’s measurable (intro volume, conversion, win rate); and a reporting and controls spine (ILPA-style samples, valuation/conflicts/cyber policies) that makes you legible to their IC.

Ticket sizes, timelines, and what “fast” really means

Compared to endowments that often prefer $5M+ tickets and 12-24 month cycles, FoFs commonly write $250k-$1M checks to Fund I/II managers and move in ~3-6 months if your materials are complete and references line up. Expect two gates: investment diligence (thesis, access, underwriting) and operational diligence (admin SOW, audit plan, reporting samples, compliance posture). You can compress time by walking in with a finished data room index, a dated Q&A log, and pre-scheduled reference calls (ex-partners, CEOs, co-invest GPs).

How they partner on sourcing

Many FoFs view themselves as deal-sourcing amplifiers: they’ll introduce you to founders, corporate partners, and other GPs, and they may co-sponsor operator councils or portfolio roundtables. To unlock that, show a one-page Sourcing Engine: owned communities, warm intros/month, % to first meeting, % to diligence, kill-criteria, and time-to-term-sheet. Add a “day-5 underwriting” checklist (the 3-5 questions you always answer) so they see where their network plugs in.

Outreach that converts: lead with attribution + access

Open your data room with two files: Attribution_Schedule.xlsx and Sourcing_Engine.pdf, then your ILPA-v2.0 reporting mock. Your cover email should promise reference availability and include a short co-invest process note (allocation criteria, timing, information flows) because many FoFs want to lean in on your highest-conviction deals.

What to expect in diligence

Track record: they’ll test causality, what changed because of you. Prepare two one-page case studies with dated interventions and outcomes.

Operations: they’ll ask who “pushes the button” for capital calls, NAV, and audits; name the human at the admin, auditor, and GP.

Compliance/marketing: if you show gross performance, pair net with equal prominence; gate any hypothetical or extracted performance and document policies.

Terms: many FoFs accept standard EM economics if the operating system is strong; a clean side-letter/MFN tracker reduces friction with their fund finance.

LP Archetype #3: High-Net-Worth Individuals (HNWIs) (typical check: $25k–$100k via feeders; higher if direct)

Who they are & what they really want

HNWIs you’ll meet fall into three useful personas:

Operator-angels (ex-founders/executives in your niche) who want proximity to product and customers, plus the option, not obligation, of board/observer roles.
Serial allocators (multi-asset individuals who already back funds/SPVs) who care about pacing, tax efficiency, and co-invest access.
RIAs’ top clients accessing alternatives through advisory platforms; they want clean reporting and a simple commitment flow.

All three decide quickly (often inside a few weeks) when your thesis is legible, your documents are lightweight, and you show exactly how you’ll use their edge (customer intros, hiring, pricing input).

How private-wealth platforms actually lower minimums

Feeder platforms used by RIAs (e.g., iCapital, CAIS) and cross-border gateways (e.g., Moonfare) aggregate many smaller tickets into a single feeder that invests in your fund. That’s how a $25k–$100k “ticket” appears on your cap table as one larger subscription from the feeder. To qualify and move fast, line up:

Advisor factsheet: strategy, team, fees/carry, risk highlights, expected pacing.
Platform-ready e-subs: standardized subscription docs, AML/KYC workflows, and wiring instructions that match the platform’s checklist.
Reporting compatibility: ILPA-style quarterly pack + capital account sample; confirm the feeder’s tax/reporting needs (K-1 for U.S.; local equivalents abroad).
Eligibility language: accreditation/QP criteria summarized in plain English for advisors; avoid edge-case promises.

Service levels: a named inbox and SLA for advisor questions (48-72h), plus a quarterly advisor webinar slot.

Compliance & tax hygiene HNWIs notice

Marketing rule basics: wherever you show gross, show net with equal prominence; gate hypothetical/extracted performance.

Suitability notes: if an RIA asks, share your standard risk factors and concentration caps at the investor level.

Tax clarity: state whether investors should expect K-1s (timing), PFIC look-through (if applicable), and whether you anticipate UBTI/ECI exposures; point to your admin’s contact for specifics.

Capital call rhythm: publish a typical call schedule (e.g., 15–25% at first close, then pro-rata over 18–24 months) so cash planning is easy.

Outreach that works

Cold blasts don’t; targeted notes do. Use a tight email with three links:

One-page thesis (“Why you/now/strategy” + 2 dated mini-wins you personally drove).
Operator use-cases (how you’ll leverage their network: customer councils, first 10 GTM hires, partner intros).
Commitment flow (portal link → e-subs → wiring; expected close date).

Pair that with operator roundtables (6-10 people, 60 minutes, one real portfolio problem to solve). Send the follow-up same day with the action items you captured, this shows how collaboration will feel post-investment.

Co-invest & SPV options

Publish a one-pager: eligibility, timing, data room access, allocation rules (e.g., pro-rata to existing LPs, then strategic fits), and decision SLAs (e.g., 5 business days).

Use standard SPV docs and one cap-table line per co-invest where possible (platform SPVs simplify onboarding).

Set expectations: co-invests are opportunity-dependent, not guaranteed; protect confidentiality with tight windows and read-only rooms.

A 4-week playbook to turn interest into closes

Week 1: curate 50-75 names (operators you know + top RIA clients via advisors); send targeted emails; calendar two operator dinners.

Week 2: host a 30-minute portfolio working session (one company, one problem, 3 asks); open pre-NDA VDR.

Week 3: move qualified HNWIs to feeder/portal; run a 20-minute “how we report” call; circulate e-subs/wire details.

Week 4: confirm allocations; document any co-invest preferences; add new intros to your CRM and tag them for the next raise/SPV.

What to show in the data room for HNWIs

ILPA-style quarterly sample + capital account template (so they know what they’ll receive).
One-page “How we use operator LPs” (cadence of councils, intro targets, expected time commitment).
30/60/90 post-close calendar (first LP call, first customer council, first co-invest window).
FAQ covering minimums, capital call timing, K-1 timing, and how updates are delivered.

Deliver these details, and HNWIs will do what they do best: decide quickly, plug into your operating system, and amplify your deal flow, with minimum friction on your side.

LP Archetype #4: Institutions (Endowments, Pensions, DFIs) (typical check: $1M+; diligence 12–24 months)

The reality for Fund I/II

Most endowments and pensions won’t anchor a first-time fund unless you already have a warm lane (e.g., previous platform pedigree, prior co-invests together, or a sponsor FoF vouching for you). They prefer Fund II+ with verifiable attribution and a mature operating system: valuation, compliance, risk, and reporting that look and feel institutional. DFIs are the exception most likely to consider Fund I, but expect heavy lifts on governance, ESG/E&S, and anti-corruption, plus a multi-step IC.

What “institutional-ready” actually means

Governance & policies: written Valuation Policy (frequency, price-source hierarchy, approval workflow), Conflicts/Co-invest Policy, Expense Allocation matrix, Cyber/BCP program, Code of Ethics/Compliance Manual, Side-Letter/MFN process.

Operating calendar: named people (not just firms) for capital calls, NAV, investor statements, audits, K-1s, with a quarter-by-quarter deliverables schedule.

Reporting: ILPA-aligned quarterly pack (v2.0 fields), capital account sample, and fee/expense transparency with offsets; commitment to standardized templates.

Controls evidence: administrator SOW/SLAs, auditor engagement letter, proof of insurance (D&O/E&O/crime), and background-check posture for key persons.

Track record: Attribution Schedule (who sourced/led/diligenced; what changed because of you) plus two one-page case studies with dated interventions/outcomes.

Consultant & gatekeeper dynamics

Expect to pass through consultant frameworks (e.g., Cambridge/Mercer/Aksia/Albourne) and sometimes OCIOs. That means:

Completing their DDQ variants and uploading to their portals.
Surviving ODD (operational due diligence): walkthroughs of controls, sample valuations, access logs, user permissions, offboarding, vendor risk, and incident response.
Reference architecture: pre-cleared CEO/GP references and a list of LPs (or FoFs) willing to speak to your operations, not just performance.

DFI specifics

ESG/E&S: a written ESMS (environmental & social management system), alignment to recognized frameworks (e.g., IFC Performance Standards/IRIS+-style metrics), and a plan for portfolio monitoring & incident reporting.

Integrity & sanctions: formal ABAC/AML/KYC policies, sanctions-screening procedures, and training cadence.

Impact reporting: logic model, baseline + annual outcomes, and third-party verification posture if applicable.

Governance asks: board observer rights, information rights, and remedial step-in provisions are common, be ready to negotiate scope and MFN compatibility.

How to work the 12–24 month timeline

Months 0–3: open the door via FoFs/sponsors; share ILPA-ordered room; schedule administrator/auditor diligence calls.

Months 3–9: consultant portal submissions, ODD, reference calls, terms redlines (fees, offsets, key person, clawback).

Months 9–18+: IC cycles, side-letter negotiation, operational walk-throughs; close timing often coincides with fiscal/IC calendars.

Positioning guidance

Plan for institutions in later closes: show that you’re already running an institutional playbook (policies, reporting, controls) while you fill early closes with family offices/FoFs/HNW feeders. That sequencing builds proof, shortens decision cycles, and avoids anchoring your first close on the slowest-moving buyer.

Private Wealth as a Growth Channel (2025–2026)

Why private wealth is expanding in alternatives

Private wealth is the fastest-growing route into alternatives, with industry outlooks and manager commentary pointing to stepped-up distribution to individuals via RIAs/wealth platforms and new vehicle types. Adams Street Partners projects wealth-channel AUM in alternatives to reach $3.03T by 2029 (17% CAGR), driven by more investors crossing accreditation thresholds and asset-manager productization. Asset-management giants are also reorganizing around private markets, underscoring this channel’s strategic importance.

How the structures work (US & EU)

US feeders/evergreen: Feeder funds on platforms (iCapital, CAIS) centralize diligence, lower minimums, and standardize onboarding. You still must align your subscription docs, AML/KYC, and reporting to the platform’s workflow.
EU ELTIF 2.0: The revised ELTIF regime (applied Jan 10, 2024) plus the Regulatory Technical Standards (RTS) effective Oct 26, 2024 operationalize semi-liquid distribution: they set requirements for redemption policies, approved liquidity-management tools (LMTs), transfer-matching, disposal criteria, and costs disclosure, making periodic-liquidity products workable with national regulators and distributors. If you’re planning an ELTIF sleeve, engineer from the RTS backward (redemptions calendar, LMTs, disclosure templates, depository oversight).

Distribution mechanics (RIAs & wealth advisors)

Expect longer onboarding (platform due diligence, home-office approvals), but a broader LP base once approved. Build advisor-ready assets (plain-English factsheet, quarterly ILPA-style sample, cost disclosure) and appoint someone to run advisor education webinars.

Anchor LP Strategy

Your goal

Secure 1-2 anchors early to validate your thesis and compress others’ timelines. Anchors become the proof point that de-risks you for everyone else.

What anchors usually want

Economics: modest fee breaks or step-downs tied to fund size/time; nothing that jeopardizes MFN or financing.
Access: co-invest priority with a documented process (timelines, information sharing).
Flexibility: side-letter language that’s operationally feasible.

Co-invest demand is durable across LP types in 2025; document how you prioritize and communicate co-invests.

Anchor profile & packaging

The best anchors know your industry, have referred deals, and are willing to be reference calls. Offer a crisp terms sheet, an ILPA v2.0 reporting commitment, your co-invest process, and two dated case studies showing your causal impact (intro → outcome).

Targeting Mechanics (tools, qualification, and funnel math)

Your list-building stack

FINTRX for family-office/RIA identification and decision-maker data.
Preqin for allocator filters (LP type, ticket size, co-invest stance) and investor outlooks.
LinkedIn Sales Navigator for warm-path mapping (mutual founders, advisors).
4Degrees (or a comparable relationship-intelligence CRM) to track intros and auto-enrich contacts.
Altss if you want OSINT-driven “allocator signals” (mandate shifts, team moves) to time outreach; treat it as a complement to Preqin/FINTRX.

Reality check: “CTF Assets” (ctfassets.net) is not a capital-raising database, it’s a CDN used by Contentful. Use it only if you’re hosting marketing assets; for LP targeting, stick to allocator databases and your CRM.

Qualify before you pitch

Score each prospect on budget size/AUM, mandate alignment (stage/sector/geo), and EM appetite (prior EM funds, public EM programs). Preqin and FINTRX profiles, plus observable LinkedIn signals (new VC hire, co-invest announcements), are reliable qualifiers.

Funnel math that works

Plan for 200+ targets to achieve your first-close goal. In current markets, single-digit conversion from first meeting → soft commit is common without anchors; anchors materially increase close rates. Set weekly activity quotas (new intros, follow-ups, second meetings) and track them in CRM.

Table of Contents

LP Targeting: Family Offices to Fund-of-Funds

← Previous chapter Next chapter →

How to Fundraise Your First Fund in 2025

Defining Your Investment Thesis

LP Targeting: Family Offices to Fund-of-Funds

Building Your Sourcing Edge

Running Your Fundraising Process

Fund Structure: 506(b), AIFMD & ELTIF

First Close: Funnel & Metrics

US Marketing Rules & SEC Compliance

The Final Close Checklist

EU Fundraising Routes

LP Reporting & Communication

Building Your LP Data Room & DDQ

Secondaries & Continuation Funds