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AMA: Fundraising for Private Equity, Cap Intro & Investor Relations Career Paths

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Guys,

Below is an AMA podcast + some key takeaways on fundraising for PE and HFs.

I was in-house IR at a couple PE shops (1 successful, 2 not) and was head of cap intro at a BB ibank.

What questions do you have for me?

I'll do my best to cover / answer them all.

WSO Podcast: Private Equity Fundraising, Cap Intro & Investor Relations Career Paths

Member @earthwalker7 joins us again to give the listeners a deep dive into fundraising best practices for private equity funds, LP psychology as well as the various roles and career paths available to Investor Relations (IR) professionals. Hope you enjoy (listen below).

Listen on iTunes | Stitcher | Spotify | All WSO Podcasts

***Free WSO shirt given out to one reviewer for each episode released! Leave Review Here

18 Thoughts on Fundraising

LP Requirements:
  • Consistent returns - LPs would rather a consistent 20% return than experience volatility
  • Consistency of team - team must have worked together for a long time, doing this same strategy
  • Consistency of strategy / track record -you've executed this strategy successfully previously
  • Unique edge - an ability to create opportunities and value that others cannot
  • Best in class - be #1 in your geography / industry / investment type
  • Transparency always - share pipeline info (obfuscated), wide dataroom, share co results, learn your lessons
  • Appropriately sized funds
  • Institutional quality - strong back-office, risk mgmt., incentivized team
Best Practices:
  • Qualify your leads, pre-screen your contacts - 90% is knowing who to speak to, and if they have $ for your strategy
  • Softmarket - market your strategy and fund when you are NOT in fundraising mode
  • 50% first close - don't announce fundraise until you have much of the capital already raised; aim for 50% first close
  • Keep top of mind - have frequent & short contacts; use short emails/messages
  • Dataroom - use Lightserve, keep it ease for LPs to view your docs; use tiered VDRs; enable downloads for stage 1
  • Materials- have a teaser, a short deck, a long deck, and an extremely long deck (much of VDR); PPM less important
  • Visits - drop people a note when you're in town, in order to try to connect
  • Tracking and contacting - GoogleSheets, PipeDrive, etc. Invest in Preqin
  • Placement agent - worth getting if you can afford it. You tend to get what you pay for. Ask for references.
  • Social media - worth doing and having a presence
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