Launching a private markets program: part 2 - fundraise
March 21, 2025
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Key takeaways
- Fundraising can be a challenge when dealing with clients (and advisors) who have had limited exposure to private markets.
- Clients may not be familiar with private markets concepts like illiquidity and drawdown structures, and some advisors may lack experience communicating the value proposition. This knowledge gap can hinder fundraising.
- The private markets onboarding process may present challenges, including handling voluminous and complex subscription documents, and ensuring compliance with regulatory requirements. This has historically meant a time-intensive and error-prone experience.
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Communicating the value of private markets and alternative investments more broadly to clients can be a challenge; however, the right messaging is essential to encouraging those clients who would benefit to take the plunge.
It is therefore imperative that, when launching a private fund program, you:
Communicate the value proposition of private markets clearly, both internally and externally
Differentiate and build confidence in your fund program
Executing the necessary documentation to onboard each investor is a further challenge, traditionally requiring significant time and attention to detail.
Here is a breakdown of some of these challenges - and how Opto partners with you to overcome them.
Build internal and external understanding of private markets
Raising capital for a private markets fund requires a strategic approach distinct from that when making public market investments - one that requires deep internal education on the value proposition of private markets and your specific investment vehicle.
Private markets asset classes and strategies are often not widely understood by investors. Though the concepts are not complex, private investments are not mainstream. Private fund drawdown structures and cash-flow patterns can similarly be unfamiliar to end-clients - and some advisors - and a challenge to communicate.
The illiquidity and fees required for actively managed private investments typically also demand more intensive explanation for clients. They need to understand the long-term plan for – and implications of – private markets investing. It is therefore crucial to have content – be it videos, webinars, decks, or social media posts – that explains the value of active management, the role that illiquidity can play in long-term financial planning, along with other private markets-specific concepts.
These challenges introduce greater friction in moving clients into funds. This means advisors need to be fully prepared to explain private markets concepts to their clients.
How can Opto help?
Our platform helps you equip advisors with both knowledge and materials covering the various private markets asset classes, portfolio construction advice, and analysis of investment trends.
In addition, our advisory services and marketing teams can work with you to craft a comprehensive internal education campaign.
Build confidence in your private markets program
Beyond introducing private markets concepts, you will need to develop a suite of marketing materials tailored to your fund featuring a compelling narrative. What problem does this fund solve? What goal is it helping your clients meet? Why should they consider locking up capital for a sustained period of time? What separates this program from others?
The general unfamiliarity with private markets, coupled with the necessary illiquidity, often means moving clients outside their comfort zone. This makes it crucial that you lay out a coherent plan for each client that inspires confidence. Your private markets program needs to feel like a seamless extension of your practice and an investor’s portfolio.
How can Opto help?
Our platform helps advisors to create, visualize, and share thoughtful proposals featuring customized projections, with multi-year investment plans tailored to individual clients’ liquidity needs, providing an easily digestible roadmap to reach steady, sustainable private markets allocations.
We will also generate fund materials for you, and our experienced marketing team can work with you to create a go-to-market strategy supported by elegant marketing materials, including videos, decks, and more.
Onboard clients smoothly
Executing subscription documents for private markets investments involves several challenges, which often boil down to a significant time commitment. These include:
Complexity and volume: Subscription documents are lengthy and complex, requiring detailed knowledge of investment terms, often slowing execution for investors
Regulatory compliance: Ensuring agreements meet legal and jurisdictional requirements, as well as verifying accreditation and compliance with anti-money laundering (AML) and Know Your Customer (KYC) requirements, adds complexity for advisors
Manual processes and paperwork: Traditional private markets investing, including client onboarding, still relies on manual and inefficient, paper-based processes, which are prone to errors
How can Opto help?
Our platform digitizes the entire process through a streamlined and intuitive workflow. You can onboard clients with all their information in bulk, with the remainder completed via a simple questionnaire. Our system checks for errors. The entire process takes a fraction of the time of traditional processes (averaging around six minutes1), and client information is securely stored to simplify the population of future subscription documents.
Each fund or investment vehicle can give clients exposure to multiple underlying funds or direct investments, but requires just a single subscription document.
Our operations and legal teams are available to provide guidance throughout the onboarding process.
Once you have executed these documents, CIOs and other allocators can use our Transactions center and Fundraise Monitoring tool to track fundraising progress across each investment vehicle, both in aggregate and through to underlying investments.
This is part two of a three-part series, laying out how Opto is a truly end-to-end solution for RIAs, family offices, and private banks to do private markets better. Read part one on “build” here. Part three on “management” to follow.
To learn more about Opto, email us at partner@optoinvest.com, or schedule a demo: www.optoinvest.com/#learn-more.
Endnotes
1. Source: Opto Investments internal data, time in single session in 30-day period to December 19, 2024.
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