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Competitive Landscapes We know you think your baby is the cutest, smartest, and most infallible ever to live. We also realize that asking you to critique your baby is difficult, as it would be like criticizing yourself. Outsiders, however, do not bear the burden of genealogical bias when assessing the perfection of other people’s babies. […]

In the movie Heat (1995), Robert De Niro’s character says to Al Pacino’s character “Don’t let yourself get attached to anything you are not willing to walk out on in 30 seconds flat if you feel the heat around the corner”. Although it may sound melodramatic and self-aggrandizing, most well-trained investment analysts share this attitude.

A natural and very understandable insecurity expressed to me by many emerging managers is how their strategies compare to other funds in my portfolio. Through individual reconnaissance and the assistance of a motley crew of advisors, emerging managers usually have some basic understanding of what LPs are looking for and which recent fund launches they

Despite holding positions that champion flexibility of thought, investment analysts on the allocator side still, admittedly (or not), are plagued with several dogmatic habits. Many of my past writings have self-servingly accentuated the plight of allocators and accusingly cried foul about specific GP behaviors that irk LPs. However, despite the pain it causes, introspectively turning

A complex, sometimes abstract system of changing/evolving power dynamics lies beneath the consequential high-stakes interactions between LPs and GPs. In GP/LP exchanges, the human element, at points, can convincingly obscure business realities, but power flexing at critical stages of engagement inevitably reveals the harsh truth. My first career experience with this reality made me feel

Analysts often use the concept of “repeatability” to support an investment thesis and demonstrate conviction in an investment opportunity. By believing that “repeatability” exists, you can feign protection (or create a sense of security) against the greatest investment threat, the “unknown future”. Despite being incessantly reminded of the golden investment CYA rule that states “past

For emerging and established managers alike a “first close” comes with a profusion of sentiments. A first close is a multiheaded chameleon that harbors many characteristics and uses – it can be an existential marker, a customary show of fundraising progression, a necessary action to allow for deal execution, a timekeeper and barometer of the

After the warm or cold initial LP solicitations, introductory meetings (virtual or in-person at the allocator’s premises), and ongoing communications, but before the full consummation of a commitment, the prospective LP visits the GP’s office. This is an opportunity to view the sponsor in its natural habitat, where hopefully, home-field advantage numbs the GP’s inhibitions

When approaching prospective LPs, GPs should ponder the multi-dimensional puzzle these investors are trying to solve. In addition to a strategy’s viability and potential to generate outsized returns, many other factors need consideration when constructing a portfolio. During my career, I have come across analytical wizards, snake oil salespeople, not-yet-full-believers of private investing, and know-it-all

There is nothing enjoyable about rejection, no matter how it comes. In the case of fund GPs/sponsors, rejection is especially painful when they have displayed transparency, authenticity, and the potential for strong future returns. A mere rejection, however, does not tell the whole story. Progress likely stalled for a variety of reasons, many of which