The LP View: First-time Managers Deliver Better Returns but Fundraising Remains a Challenge

Emerging market fund managers and first-time fundraisers are seen to deliver better returns compared to their more established counterparts, according to Dave Richards, managing partner of Capria Ventures, who spoke at DealStreetAsia’s Asia PE-VC Summit 2022.

“By missing out on first and second-time fund managers, you’re going to miss out on returns,” he said at a panel titled ‘The LP View: Backing emerging market and first-time managers in adverse times’.

Richards asserted that a good first-time fund manager had a different value proposition compared to existing GPs, as they tend to see fresh opportunities emerging from the market other than the businesses that were invested three or four years ago.

Capria Ventures is a limited partner (LP) in a spate of funds in Africa, and South and Southeast Asia. Most recently, the firm backed the debut vehicle of Vietnam-based VC firm Ascend Vietnam Ventures.

Earlier this year, International Finance Corporation (IFC) also proposed an up to $3 million commitment in Ascend Vietnam Ventures’s inaugural vehicle.

Sharing her perspective, IFC’s regional lead (East Asia and the Pacific PE Funds) Huai Fong Chew said backing first-time and emerging market managers has been the “DNA” of the development finance entity. “Even in times like this, it is not something that we change,” she said.

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