A Blueprint for Launching Private Credit Funds in 2025: Insights from FundPro

Caruso's Liam McEvoy, sits down with James Watson, Co-founder and Director of FundPro, a specialist trustee and licensing organisation focused exclusively on private markets. With extensive experience as an interest rate derivatives trader at Macquarie Bank and at global macro hedge funds like Millennium Partners in New York, James Watson brings deep financial markets expertise to the complex world of fund structuring and compliance.

FundPro is renowned for its selective approach to client partnerships, working exclusively with experienced investment professionals to create robust, scalable fund structures that align with both investor expectations and regulatory requirements. The firm's expertise spans fund setup, compliance frameworks, and operational workflows, with a particular focus on private credit vehicles.

In this discussion, James shares his insights on the evolving landscape of private credit fund launches, the critical importance of operational readiness, and how emerging managers can build investor conviction through strategic outsourcing and technology integration in 2025.

The New Era of Private Credit Fund Management

The private credit landscape has evolved dramatically, presenting both unprecedented opportunities and complex operational challenges for emerging fund managers. James returned to Australia with a clear vision: to help experienced investment professionals navigate the intricacies of launching compliant, scalable private credit funds.

"When I returned from New York and co-founded FundPro, I saw a space in the market for a trustee and licensing organisation really focused on private markets," James explains. "Private credit is a dynamic and evolving asset class, and you really need robust structures that work both for the investor and the investment manager. That's like a strategic puzzle that needs to be solved each time because no two structures or strategies or set of target investors are the same."

This complexity underscores a fundamental challenge facing today's emerging fund managers: while the barriers to entry may appear lower than ever, the operational standards required to build investor trust and achieve sustainable growth have never been higher.

Common Launching Pitfalls

Many experienced investment professionals assume that deep domain knowledge alone will guarantee fund success. However, James’ experience suggests that operational readiness often determines whether a fund thrives or struggles.

Key challenges facing emerging fund managers include:

• Operational complexity beyond lending: "There's kind of a joke that anyone can lend money—lending money is easy. It's getting paid back, that's the difficult part," James notes. "It's one thing to underwrite one individual loan, but it's another thing to do it at scale with processes and systems in place that investors can trust."
• Institutional-grade expectations: Today's investors expect institutional-grade infrastructure, real-time reporting capabilities, and seamless digital experiences from day one.
• Legacy system limitations: The challenge is particularly acute for managers transitioning from large organisations. "Large firms often have legacy layers of process that are really unnecessary in 2025," James observes. "But you can't simply ignore operations—you need to build them smartly."
• Product-market fit assumptions: "A lot of new managers set out to build the fund they want without asking what their target investors are actively seeking," James warns. "Don't assume that a structure that you've seen someone else succeed with is going to immediately work for you."

Common costly mistakes include:

• Over-complicating structures early in fund life
• Under-investing in operations and technology early on
• Ignoring data hygiene from day one
• Failing to test product-market fit with potential investors before launch

How to Launch: Strategic Outsourcing and Technology Integration

James advocates for a fundamentally different approach to fund launches—one that prioritises lean operations while maintaining institutional standards. This strategy centres on selective outsourcing combined with best-in-class technology platforms.

Core functions that must remain in-house:

• Investment decision-making and strategy development
• Investor relations and direct communication
• Core value creation activities

Functions suitable for strategic outsourcing:

• Trustee services and compliance
• Fund administration and reporting
• Technology infrastructure
• KYC/AML processes

"You can outsource investor operations, but I really don't think you should outsource investor relations," James emphasises. "Your communication with your investors and the feedback that you get is key, particularly in those early days."

Structural considerations for lean launches:

James often guides clients through the choice between special purpose vehicles (SPVs) and pooled structures:

• SPV approach: "A classic lean way to start and test a thesis is with an SPV. It allows you to customise and launch really quickly for one-off deals or co-investments."
• Pooled structures: "Once you've built a track record as an operator, you can bring your investors on the journey into a pooled structure."

The critical importance of data management:

"Data chaos is really expensive, and you won't know until it occurs," James warns. "Technically, a small fund can launch with spreadsheets, and everything's fine until you get a question from an auditor or one of your investors. When that occurs, that chaos creates reporting delays, compliance risk, and crucially undermines investor trust."

Technology as a competitive advantage:

"Companies like Caruso offer amazing solutions that can present to the world an institutional-level offering without needing a ten-person ops team to launch a fund," James explains. "By staying true to your value creation—investment decision-making and investor relations—but outsourcing trustee roles, licensing, administration, and technology, you can present at the same level and sometimes even above legacy organisations."

The Results: Accelerated Growth and Enhanced Credibility

The benefits of this strategic approach extend far beyond operational efficiency, with James’ clients consistently achieving faster time-to-market while maintaining the credibility necessary to attract sophisticated investors.

Rapid deployment capabilities: "We had a manager come to FundPro, and we went from zero to fully operational within about six to eight weeks," James recalls. "I'm talking about the setup of the fund, coordinating the legal and tax, onboarding 25 initial investors including frictionless KYC/AML, collecting the money, and even deploying the first round of investments."

Technology-driven efficiency gains:

• Automated investor onboarding and capital calls
• Real-time access to critical information for both managers and investors
• Elimination of manual processes and reduced error risk
• Centralised, auditable workflows

"Caruso brings trust and automation to investor onboarding, capital calls, and data capture," James explains. "It removes manual steps, reduces the risk of errors, and provides real-time access to all the information both the manager and investors need. That transparency is absolutely essential."

Enhanced focus on core activities: "With workflows like updating your cap table, investor updates, capital calls, and distributions all digital, centralised, and auditable, managers can focus on finding deals and managing their portfolio rather than chasing spreadsheets," James notes.

Building investor conviction:

• Clear, timely communication and reporting
• Operational readiness that signals professionalism
• Alignment of interests through transparent processes
• Trust building through consistent execution

"Trust is everything, and you need more than trust—you need conviction from investors, particularly when you're an emerging manager," James emphasises. "You build trust with clear communication, timely reporting, and alignment of interests. Operational readiness is key to all of that."

Competitive positioning: "Software is non-negotiable in 2025," James states. "With cloud-based software like Caruso, you can launch a fund and have an institutional-level offering from day one. One of the great things about launching a fund now is that you don't need that traditional back-office infrastructure to compete effectively."

Conclusion: The Path Forward

Success in today's private credit market requires more than investment expertise—it demands operational excellence from day one. As James concludes: "Anyone looking to launch a credit fund in 2025 must focus on building trust and conviction early. You have to answer the question 'why you and why now'—you've got to have some kind of edge. To build that trust, focus on your core skills and competencies, be that investment management, investor relations, or capital raising. Start lean and outsource to best-in-practice software providers like Caruso and independent trustees and licensing providers like FundPro."

Key takeaways for emerging fund managers:

• Operational readiness and investor conviction are inseparable
• Strategic outsourcing enables institutional-grade capabilities without traditional overhead
• Technology platforms are essential infrastructure, not optional upgrades
• Data hygiene and transparency build long-term investor trust
• Product-market fit must be validated before launch, not assumed

The firms that recognise this reality will be best positioned to capture the opportunities ahead. By leveraging specialist partners and modern technology platforms, today's emerging managers can achieve what was previously impossible: institutional-grade operations with boutique-level agility and focus.