First-time private investment strategies are taking center stage as they garner more attention and commitments from institutional investors. Increased capital available for private investments (dry powder), coupled with intense competition to access established managers and, for some, the desire to have more mission-aligned investments, have led to greater allocations to new funds. 

In 2016, nearly 51% of limited partners (LPs) were willing to invest in or were considering first-time funds, a 12- percentage-point increase from 2013, according to a recent Preqin report. Underweight allocations to private capital asset classes and increased difficulty in accessing established funds were reasons cited by LPs for their consideration of first-time funds. Further, some first time funds tend to be impact oriented, which has drawn the attention of those LPs who value responsible investing. About 86% of investors considered ESG factors—which are an increasing area of importance in the fund screening and due....

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