PE sponsors need to understand the pros and cons of operating a deal-by-deal fund before deciding whether to adopt the model. While certain sponsors may be attracted to a deal-by-deal fund’s streamlined structure – i.e., a single-asset fund with simple mechanics – others may be deterred by the continuous fundraising process, its impact on the scope of available investment opportunities and the active role of investors. This three-part series aims to familiarize PE sponsors with the deal-by-deal fund model and aid them in evaluating the viability of the approach. This second article describes unique characteristics of the fundraising process and the general mechanics of establishing a deal-by-deal fund. The first article outlined the features of deal-by-deal funds and analyzed investor perceptions of the vehicle. The third article will explore the economics of a deal-by-deal fund (e.g., carried interest and broken deal expenses), as well as several approaches to overcoming the issue of deal uncertainty. For more on the co‑investment structure, which has similar features to deal-by-deal funds, see “Investment Vehicles, Investor Rights and Restrictive Covenants in PE Co‑Investments (Part One of Two)” (Jun. 18, 2019); and “Sadis & Goldberg Seminar Highlights the Ample Fundraising and Co‑Investment Opportunities in the Private Equity Industry, Along With Attendant Deal Flow and Fee Structure Issues” (Dec. 8, 2016).