Independent sponsorship begins with a clear plan to create value in the businesses being acquired. This may involve acquisitions, growth investment, commercial development or operational improvements tailored to the company’s needs. Sellers, often founder-owners, look for evidence that the business will continue to grow under new ownership. A credible value creation plan helps align the interests of sellers and investors and makes it easier to secure both the transaction and the required capital.
The discussion highlighted that creating value is more important than simply finding deals or investors. If the value plan is strong, it becomes easier to attract sellers who can see a future for their business and investors who are confident in the opportunity. Independent sponsors also tend to focus more time on operations and value creation than on building large internal teams or extensive platforms. The emphasis is on what will improve the business and generate returns, rather than on the size of the sponsor’s own organisation.
Independent sponsors must build conviction on both sides of the transaction: with sellers who are handing over their businesses, and with investors who will provide the capital. Because deals are not always fully funded at the outset, sponsors need to be comfortable operating in uncertain situations and presenting a credible vision for the business’s future. At the same time, they must persuade investors that the opportunity and the sponsor’s approach are worth backing, even without a committed fund. This “double dance” requires a personal, differentiated approach to sellers and sustained relationship-building with investors to ensure capital is available when needed.
Independent sponsors must engage with a large number of potential investors because LP preferences shift over time by geography, sector and mandate. In practice, this means casting a wide net and accepting that much of the effort in capital raising is about persistence and timing rather than identifying a single perfect investor. At the same time, the most efficient approach is to build focused relationships with a core group of LPs before a deal is identified, so that expectations and fit are already understood when an opportunity arises. The discussion highlighted that while breadth is necessary, depth and prior engagement with investors ultimately make the process more productive.
Flexibility in capital deployment
Independent sponsors can raise very large amounts for specific deals without needing a commingled fund, allowing them to tailor capital to the opportunity and investor preferences.
Faster, more efficient economics
Deal-by-deal carry is realised more quickly than fund carry and can be more tax-efficient in some jurisdictions, challenging the notion that the model is second-best to traditional funds.
Hybrid structures are emerging
Many managers now combine deal-by-deal investing with commingled funds, offering different products to different types of LPs and positioning independent sponsorship as a credible, standalone part of the value chain.
Independent sponsors operate with lean, entrepreneurial platforms rather than large, fixed teams. This structure allows them to focus more time on value creation and operations than on regulatory paperwork and internal overhead. Instead of maintaining a bench of operating partners, they bring in specialist expertise as needed for each portfolio company. The emphasis is on the quality of the value-creation plan and the fit with the business, not the size of the sponsor’s own organisation. Such an approach can make smaller, more agile teams more competitive in certain segments of the market.
“The most difficult part is just to create value. If you have the right deal, you will find LPs, and if you have a great value plan, the seller will be happy to sell to you.” Georges-Alexandre Ancenys, TAG PARTNERS.
“Being able to live with uncertainty is a prerequisite to survive as an independent sponsor.” Marco Piana, VAM INVESTMENTS.
“To the sponsors, I would say behave consistently over the long term, keep saying the same things, accept as many no’s as it takes, and over the long term, it works.” Marco Piana, VAM INVESTMENTS.
“Starting with the GP, you have to be passionate about businesses and passionate about what you do. And if you are, I think it’s a great place to be because you are you have more impact.” Georges-Alexandre Ancenys, TAG PARTNERS.