Guest: Zoe Yeo, Partner, Headway Capital
Host: Alice Murray, Editor, THE LINE_
Recorded at: British Emerging Manager Institute Summit 2025
This episode dives into the evolving landscape of emerging managers in private capital. Zoe Yeo shares insights from her work at Headway Capital, a firm with a growing focus on backing independent sponsors and emerging managers in the lower to mid-market. The conversation highlights the momentum building behind this space, the challenges these managers face, and the role of community-led initiatives like the British Emerging Manager Institute in helping new talent succeed.
Key highlights & discussion points
Headway’s Focus on Emerging Managers & Independent Sponsors
- Headway has evolved over 20+ years, with a refined focus in recent years on deal-by-deal investing, particularly involving:
- Independent sponsors
- GP continuation transactions
- Emerging managers raising smaller funds or requiring co-investment capital
- The shift began around 2018 when the team started seeing attractive deals from groups without capital – now widely recognised as independent sponsors.
Fund 5 and Institutional Recognition
- Headway closed its fifth fund in May 2024, raising €630m, well above the €500m target.
- Zoe points to growing LP understanding of the independent sponsor model:
“At first, institutional LPs didn’t quite know where to put this strategy… now there’s more awareness, especially in Europe.”
Independent Sponsor as a Viable Model
- Not all emerging managers aim to become traditional GPs; many prefer staying independent sponsors.
- The model appeals to entrepreneurial individuals who want to focus on deals over firm-building admin.
- Zoe sees this as a viable long-term route, not just a stepping stone.
Zoe’s Involvement with the British Emerging Manager Institute
- Zoe sits on the LP Advisory Board, supporting the institute’s mission to democratise access to capital for emerging GPs.
- She praises founder Ed for his passion and vision:
“His passion for helping new managers is obvious and inspiring… it’s great to now have a community to point people to.”
Supporting Ecosystem and Community Building
- Headway has also supported the launch of a forum for independent sponsors, which has grown rapidly.
- They are engaging with Invest Europe to formalise support for independent sponsors within the broader private capital framework.
Market Challenges & Opportunity
- Zoe acknowledges the tough market environment driven by a lack of LP distributions and slow decision-making.
- However, she remains bullish on the space, noting:
- More attractive deal valuations
- Increased sponsor formation
- A shift in LP sentiment as they reassess fund re-ups and explore new relationships
Advice to Emerging Managers
- Be patient: fundraising and deal-making both take longer in this market
- Be persistent: belief in your strategy and team will sustain momentum
- Build relationships: like dating, finding the right LP takes time:
“You don’t need 10 LPs, just the right one. It might be the first or the 200th you meet.”