I've spoken with more than one lower-market PE fund that is sunsetting its fund and going to an independent sponsor model. Here are some thoughts: 1. Exit pressure at the top rolls downhill Zombie funds at the top of the market are finding fewer and fewer options to exit. This means less capital for them to deploy into new acquisitions. And so the ball rolls downhill until sponsors in the LMM keep moving downmarket for smaller deals to find alpha. Ask any searcher out there who never thought they would compete with PE on a $500k EBITDA deal. All that is to say, there are challenges in the market, and people are looking for more and more creative ways to find deals. And the independent sponsor model allows for more creativity. --- 2. Maturation of the profession A few decades ago, a leveraged buyout was a whole new concept (does anyone even call it an LBO anymore?) Since then, there's been a boom of growth in the industry, and PE has entered into the same type of career-feel for many professionals as being an MD or lawyer. That means there are just a lot more people with real experience in buying businesses. And instead of waiting their turn for the top to be named an MD or go raise their own fund, they say, "Why not do this myself?" --- 3. More sponsors = more LP options With more independent sponsors on the market, LPs now have more options. They can invest deal-by-deal, choosing investments where they can provide support, and avoid locking up capital in a fund. --- There are still plenty of committed capital funds that are doing well. We work with them every day. But options are growing.