ACQ2 by Acquired Capital Formation and the LP / GP Relationship (with Altimeter’s Meghan Reynolds)
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Jan 9, 2023 Meghan Reynolds, Head of Capital Formation at Altimeter Capital and former global co-head at TPG, shares her expertise on the vital GP-LP relationship in venture capital. She emphasizes the strategic importance of capital formation beyond mere fundraising, highlighting the need for transparency and communication with limited partners. Meghan predicts significant changes in the investment landscape over the next decade, discussing how the dynamics of institutional investment and the expectations of LPs are evolving in response to market shifts.
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LPs as Capital Source
- Venture capital investments originate from Limited Partners (LPs), not solely the venture capitalists.
- LPs include high-net-worth individuals and institutions like sovereign wealth funds, pension plans, and corporate balance sheets.
Diverse LP Needs
- Different LPs have different needs and expectations from their investments.
- Venture capital firms must understand these nuances, including their constituents and reporting requirements.
TPG's Understaffed Capital Formation
- When Megan Reynolds joined TPG in 2010, its capital formation team was understaffed with only four people.
- This was despite TPG managing $40 billion in assets, highlighting the industry's lag in prioritizing capital formation.