The Evolution of Independent Sponsors with McGuireWoods’ Jon Finger

Independent sponsors have evolved to become a separate asset class offering value to the ecosystem within the realm of private equity.

On this episode of Deal-by-Deal, hear McGuireWoods’ Jon Finger share his insights on the evolution of independent sponsorship and recent noteworthy developments. There have been larger deals, more hybrid structures, and an increased interest in first-time funds from within the independent sponsor space.

With his experience in the independent sponsor space, Jon offers advice for emerging fund managers looking to raise their first committed fund.

“Having a broad set of references from different parts of the deal ecosystem is important to show LPs,” Jon says of the key steps independent sponsors need to prepare for when raising a first-time fund.

Also on this episode of Deal-by-Deal, Jon and Jeff review what independent sponsors need to consider when it comes to their current deals. Including if they can roll them into a fund: “One of the key pieces is the deal pipeline, and providing LPs with that demonstrated ability to put money to work in a meaningful fashion relatively quickly,” Jon explains.  

Featured Guest

Name: Jon W. Finger

Title: Partner at McGuireWoods

Speciality: Jon’s practice focuses on private equity and corporate transactional matters, including mergers and acquisitions, fund formation, securities offerings, and corporate governance initiatives.

Connect: LinkedIn

Acquired Knowledge

Top takeaways from this episode 

★ The independent sponsor space is maturing. Over the past decade, the independent sponsor space has moved from individuals making deals at country clubs to being a valuable part of the ecosystem. As independent sponsors have matured, the deals have grown in value and begun to encompass more hybrid structures. 

★ The criteria to become a successful independent sponsor fund manager. More and more independent sponsors are looking to raise committed funds. To be a successful emerging manager, an individual will need to have previous successful exits, the ability to articulate their ESG focus, and the support needed to scale the fund. 

★ Key steps to consider when raising a fund. Reference checks are extremely important to LPs and for any independent sponsor considering raising a fund, it’s important to have a diverse lineup of references ready. Also, consider what investors are right for your fund and which backgrounds or specialties will drive the most value for you.

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