Reshaping the placement agency industry

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Interview of Katalin Gallyas, Managing Director of c*funds, By Stephane Pesch, CEO of LPEA, as featured in Insight/Out Magazine #21

Katalin Gallyas, Managing Director presents c*funds, a Dutch placement agency, linking fund managers with Benelux, DACH, UK, and North European LPs.

Could you please share with us the mission of c*funds, its scope and the different services you propose?

c*funds was created in 2018 with the ultimate goal of transforming the ‘old-school’ placement agency industry through a young team with strong backgrounds in institutional fundraising, M&A, and digitalization. We wanted to shape a new placement agency model as we believe that a lean and entrepreneurial organization can best serve our GPs interest. We understand the pain from many VCs who feel that placement agents are too expensive and often lack the required execution and speed to be successful. In response to this and to lead the way, our aim is to run very transparent LP campaigns with frequent feedback using the best systems possible. We wanted to serve GPs differently from day one.

We provide a turnkey service, starting with fast and high-quality pre-marketing review and design “facelift” that is often very helpful for emerging managers to land the first conversations. We have an in-house graphic designer who works in line with our GP’s corporate identities and in the future we plan to work on some relationship visualization tools for GPs as well. Next to this, our team has built up “personalized access” to approximately 450 global LPs within a very short period of time (3 years) enabling us to unlock many conversations. Personalised touches when making LP introductions is crucial to success and is complemented, rather than substituted, by great data or IT.

 Any specific infrastructure required in order to be successful in this field?

In my view, the ultimate success factors in the placement scene are based on the following pillars: real & relevant LP relations, mandate knowledge, best in class CRM, and access and partnerships with many PE events. 

What is the sweet spot of c*funds?

The c*funds sweet spot is helping inspirational fund managers in alternative asset classes of VC, PE, Real Estate, Private Credit and Infrastructure, with a fund size between EUR150M and 400M.

In which jurisdictions are you active right now and which licenses do you use?

We currently operate under Dutch jurisdiction and can service our clients throughout Europe. We have a strong focus on Benelux, DACH, UK, and North European LPs. Our GPs are global fund managers (VCs, growth, buyout, and real estate funds) that often want more EU-based LPs and already have an anchor investor or have completed the first close. The majority of our clients are VCs as this is also where we have an established track record. Very few placement agents are focusing on this segment, as it is a tough game with a very scattered LP market and many of the players are “under the radar”.

In 2022 we will be applying for a stronger MiFID license that will enable us to advise LPs directly with their portfolio composition.

Could Luxembourg become a new hub for c*funds?

An expansion to Luxembourg is an interesting option and a great opportunity as many of our global GPs are considering launching EuVECA (feeder) funds to their global, Asian or US-based funds. From our experience, a Cayman structure is much less attractive for qualified EU based LPs. A Luxembourg domiciled EU feeder fund for example, for a Japan-based secondary fund is a great tool to attract new EU-based LPs as it creates immediate trust. c*funds would like to be the gateway of these new global “arrivals” and in Luxembourg with the current rich service provider ecosystem, it is certainly possible. Furthermore, the rising Family office network and the presence of the most prominent EU fund of funds (EIF) is extremely valuable in this ecosystem.

Any important trends you would like to highlight for the future?

I would say the high demand for liquidity and shorter terms on LP return allocation. Secondary funds are rapidly emerging, offering an attractive co-investment opportunity alongside a primary fund raise is now a market standard.

 

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