“Great question,” “We have never been asked that before,” and “You ask the best and most thoughtful questions” are just a few compliments investment managers use to sweet-talk prospective LPs and help keep the conversation positively flowing. I won’t judge the validity of such praise, but although flattery can be a powerful tool in many situations, the cynic in me takes these words with a grain of salt. After all, the primary purpose of any question is to obtain a clear answer, not for the question itself to receive commendation.
I think it’s fair to say that GPs primarily hear the same questions repeatedly. This is why a well-crafted DDQ can be very useful for answering frequently asked questions, while actual GP/LP interactions can help clarify points or explore complex and nuanced topics that are difficult to cover eloquently in a document. I, and I believe most LPs, can attest that GP meetings get juicy when they are devoid of unnecessary tension, the prospect of entrapment, and displays of power. Free-flowing conversations, underpinned by mutual humanness and transparency, tend to be the most productive, yielding fair conclusions and fostering growing familiarity. The truth is that both parties are doing their jobs, and we all know that monotony can kill the human spirit. Therefore, finding ways to make learning about each other more enjoyable can lead to more positive outcomes. My arrogance has not yet reached the point where I believe I receive more useful information from GPs than others, but through my extensive experience interviewing managers, I think I’ve learned a few things about setting the stage and constructing questions that have been relatively more productive. I share some of this below.
- A decent level of preparation: This point might be controversial because I have attended some GP meetings completely blind, which turned out to be quite fantastic. The problem with attending a meeting unprepared is that a lot of time can be wasted getting up to speed with the basics of the manager and their strategy, which could have been used to delve into the more nitty-gritty and consequential details. Additionally, I have noticed that attending an initial meeting without preparation can prolong the process of reaching a likely “No thanks”, which is unfair to the GP. Managers always tend to be gracious and will start the conversation wherever you want them to, but I think an LP can gain an initial level of respect from the GP by doing some preparation, even if it is very minor.
- Framing questions with genuine curiosity: Related to the above point, I have realized that framing questions with genuine curiosity can really open up a manager. Managers love to nerd out on their strategy and chosen industries or sectors. Asking questions that go beyond the surface with childlike inquisitiveness puts them in a professorial position, which most managers tend to thrive in. Reviewing manager materials before the meeting and identifying points of agreement, disagreement, or those that require further explanation can be a pathway to an illuminating discussion. You can literally see the light brightening in their eyes when the conversation turns from a straight “pitching” session to a back-and-forth that engages all parties. Time flies in these meetings, and if the pitch deck becomes useless or merely a reference repository, that is an additional victory.
- Tone of asking: I believe “tone” is 90% of asking a question. Coming in combative and condescending will torpedo the meeting in ways that are not always apparent to the naked eye. It is fair to challenge a manager’s thesis or put forth insightful counterpoints, but unless your due diligence process includes documenting a GP’s reaction to being agitated, it is best to leave “gotcha” queries at your desk. I am not saying that softball questions are the way to go, but I am stressing that the way difficult and even unfair questions are asked will, to a large degree, determine the efficacy of the answers. Lastly, this is just my pet peeve regarding a question-asking technique used by many of my peers; it really irks me when I hear analysts start an inquiry with “Tell me about ……………”. I believe this approach kills the vibe of a meeting. It makes the interaction too formal and veers it into “job interview” mode with a blatant power structure in place. I think that the more informal the meeting, the more useful information is likely to be uncovered. It is good to remember that no sub-docs are getting negotiated or signed in these meetings, so a cordial atmosphere that embraces EQ without ducking uncomfortable or complex topics is the best way to proceed.
- Ask for views from all participating GPs: GPs often bring more than one person when meeting with LPs, and they usually adopt a division of labor approach when the meeting cadence involves thumbing through the pitch deck – it is apparent that each member is well-practiced in a pre-assigned set of pages. I try to break this routine when possible. As previously mentioned, I prefer an informal discussion to a straight-up pitch session. Breaking a manager’s routine by asking all team members for their opinions on various topics can provide a clearer picture of the organizational culture and offer valuable insights into the level of groupthink or intellectual honesty within the organization. I enjoy it when GP team members have an impromptu debate in front of me about their views on the prospects of a specific deal or a portfolio company’s management team. Of course, most GPs have a process in place, and decisions are made either democratically or by central leadership; however, the common factor is that people are involved in this process, and it is instructive to observe this process in action.
- Opinions on other participants in their space: Although I believe there are many benefits to putting on blinders and focusing solely on your own race, in asset management, understanding how peers approach the market and having a sense of who you think is doing things correctly and who you aspire to be like can be a very revealing data point. In my view, a GP who does not know that their investment strategy is a dime a dozen, or has no institution in their industry (or another) that they admire, is emitting “red flag” energy. I always try, directly or indirectly, to ascertain the self-awareness of a GP and how they perceive themselves within their ecosystem. Delusions of grandeur (sometimes masked as confidence), visible under confidence (sometimes masked as humility), and outright ignorance (sometimes masked as “we don’t let outside noise affect what we do”), when answering questions about peers and competition, are signals that have led me to pass on managers.
Anthony Kwesi Hagan
Founder and Head of Research, FreedomizationTM
July 6th, 2025
