GPs’ Five Blind Spots on the Fundraising Trail


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Nick Donato: Hi, folks. Welcome to today’s webinar, where we’ll be talking about GP’s blind spots on the fundraising trail. I’m Nick Donato, an industry specialist here at Navatar, and I’m going to be your moderator.

To give you more background on really what’s the goal of today’s presentation, what we’re talking about here are the small missteps that private fund managers still make out there on the fundraising trail. What we’re not talking about are the big-ticket items, like having stellar performance, or showcasing your top talent. What we’re talking about are those smaller factors, or easy-to-miss blind spots, that may not seem like much, but they could actually be the difference maker in whether an investor makes a commitment or not.

And some of these things are really simple, like, did you make sure to ask a direct question in one of your emails to an LP? Or during the LP meeting, did you make sure to have a conversation with the investor, instead of delivering a 35-slide dull presentation, where it feels one-sided. Right? And look, even if you feel that some of these things are already being accomplished on your end, you may be surprised to learn where there’s scope for improvements.

But first, some quick housekeeping. First and foremost, if you have any questions at any time during the presentation, by all means, send them our way. You can use the GoToWebinar tool on your screen there to submit them. I have reserved time at the end of our webinar for our speakers, who I will introduce you to shortly, to field them. Secondly, because this comes up a lot, a recording of today’s presentation, including the slides, will be emailed out in the coming days, so just look for that in your inbox.

Moving on then, how does Navatar fit into this picture of blind spots? Well, we are a cloud provider for the alternative assets industry. What we do is we provide fund managers a platform. In fact, we’re calling it the industry’s first connected growth platform, that ties together all their workflows and communications onto one system. In this context, on investor relations, what the system does is it captures all of your communication touchpoints with LPs, including your emails, your calls, your record notes, and even offers specific workflows for nurturing different types of LP relationships. So, whether it’s an existing investor, a prospective investor that seems warm, or you’re looking to meet someone new, really in a nutshell, what we do is provide you with your very own LP intelligence center. And pertinently, here, we help you avoid the blind spots that we’re going to be talking about shortly, so that you can raise funds faster. You’ll see some of these workflows, what I’m talking about, throughout the presentation.

Now, let’s meet today’s speakers, who can help me talk about these blind spots. I have with us here Erik Mayo, who is Managing Partner and Chief Investment officer at Terra Incognita. Terra Incognita is a private debt firm based in San Francisco, and Erik offers us a unique perspective today, because he has served as both an LP and GP in his career, so he’s seen it from both sides of the table.

Also with us is Paige Uher, who is Director of Investor Relations at Zeo Capital Advisors, a hedge fund also based in San Francisco. Paige has 14 years of experience as a skilled investor relations and marketing professional, so I appreciate her being here today to give us her expertise.

And thirdly, we have Ketan Khandkar, who is Navatar’s COO, who is really our expert on the specific workflows and procedures that you need to follow in order to avoid the five blind spots that we’ve identified.

So, let’s get to it, then, by learning a little bit more about Erik and Paige, our two guest speakers. Erik, I’m going to start with you, and then we’ll hear from Paige. Erik, if you can provide us some richer background on you and your firm.

Erik Mayo: Sure. Terra Incognita is, as you said, a private debt firm. Mostly what we do is, we focus on investing by JV-ing or lending to people who do factoring, or otherwise known as ‘invoice discounting’ or ‘trade finance’, which really what we consider to be invoice discounting across markets. We tend to focus most of our investments, either here in the US or in Latin America.

Probably a little bit of broader background on myself, as you said, I’ve been a GP and LP. I started really in the hedge fund land, investing for Stanford University and then was a founding partner at another fund of funds, Fintan Partners, so I’ve had a lot of investors come to me and seen a lot of pitches from the other side.

Nick Donato: Thanks, and Paige?

Paige Uher: Well, good morning, and… Or I guess afternoon, if you’re on the East Coast. As Nick said, I’ve spent my entire career on the investor relations desk in some capacity, and that’s been the bulk of my career at hedge funds. But I’ve done four years in private equity, and today, I sit at a fixed income mutual fund, which seems a little disconnected, but still working with institutional LPs and an institutional only share class product.

And so, a lot of the things, regardless of who you’re speaking with, whether it’s one of the biggest public funds in the country, or it’s a community foundation or a 401K plan, the key person sitting on the other side of the desk is evaluating you and evaluating your product and team and process in all the same light. So, hopefully, things that we share today will be helpful, and hopefully I’ll have some stories of what to do and learn from my mistakes along the way.

Nick Donato: I encourage any war stories. They’re always entertaining, Paige.

Paige Uher: Yeah, I will fill myself on the tracks.


Nick Donato: And then Ketan, if you could give us 30 seconds on your background.

Ketan Khandkar: Yep, thanks everyone for joining. I appreciate it. My name is Ketan Khandkar, I am a COO and I head all our product strategy here at Navatar Group. We have a whole suite of products that we have developed to the private equity, hedge fund, investment banks, M&E industries, and look forward to today’s webinar.

Nick Donato: Well, thank you to all for that. I want to also quickly lay out what we want to do here today. I’ve asked Paige and Erik to join us to really identify the exact fundraising challenges or the blind spots that a lot of GPs are still tripping out over there in the fundraising trail. So given their expertise and their experience in the field, they can talk about both the fundraising blind spots and the solution at a high level and also identify for us some best practices to follow, in order to, not only to avoid those blind spots but maybe fine tune your investor relations and fundraising and marketing strategy.

And then Ketan as our technical man, who has helped really hundreds of private equity firms and hedge funds actually put the processes in place to follow these best practices. He can show us specific examples of work flows and procedures that your firm may want to consider implementing. We want this presentation to be both informative and also helpful in a way that you can take some actionable items away from it. So without further ado, Erik and Paige, what is the first still too common blind spot that fund managers are tripping up over there in the fund raising trail?

Paige Uher: I think it’s self-perception, Nick, to be quite honest. A lot of fund managers out there they start a fund because they think they’re doing something different than everybody else and something that everybody wants. And then they get out on the fundraising trail and they find that it’s much more difficult than they originally thought it at the onset. So, it’s knowing your appropriate target market for your product. If you are a $20 million fund out the gate, going to talk to the largest public funds in the country is a waste of your time. That is not the place or the time or the energy, money, resources. You’re a small firm. You need to be very strategic. Think of it as a surgical strike.

So it’s really is about self-perception. And for those people that are in the investor relation seat, it’s your job to educate your manager and manage internal expectations as much as external expectations and putting together that marketing plan and roadmap. And knowing where you want to be in five years and then backing up to define what those incremental milestones are. Are you at a stage where you’re looking for seed funding? Are you willing to give away? And bringing these questions to your investment team, and forcing the answer. Are they willing to give up economics? Are you willing to put together a founder’s share class? Are you at a stage where you’re really looking for accelerator capital? That’s a really different LP base you should be targeting and talking to and conversations to be had along the way. Or are you actually seeing things are good, you’re running your strategy, you have a great time three-year track record, the typical three-year, 100 million, you’re in a good place, and so now you’re looking for opportunistic growth.

But I encourage everybody to stop and say, “What do you want… If you look ahead in your firm, in your strategy, what do you want your LP mix to be?” And then be very strategic on how you get there. If you want to be solely focused on public funds, then you need to work the investment consultant channel. You need to talk to the emerging manager or managers if you’re a smaller firm. If you’ve already proven yourself and you already have the track record, start going direct, leverage your current investor bases for others. If you really don’t want to take a public fund dollar, which is completely acceptable, know where you’re going to fill those coffers from. Is it going to be from the nonprofit world? Endowments are highly sought after as Erik can attest to at his time at Stanford. Hopefully he’ll share some of that with us.

And a good way to even start this conversation with your investment team, who probably just wants money regardless of where it comes from, is to educate them on the value of a dollar from different LP bases. And what I mean by that is, can you take on the reporting burden, the travel burden, the client servicing burden that comes with a dollar from different LPs because they’re not all alike. And then the second question that I always pose is, who would you say no to? Is there somebody you’d say no to? And everybody should have a no list. I think it’s a rarity. But if you’re really building a sustainable business and you’re in this to align yourselves with your investor base, which we all should be but I know that’s not the reality. I’m fortunate to be in a firm now that we have this conversation a lot and our no list is pretty long. Because we’re just very realistic about how we want to build our business and be very deliberate it. Erik do you have anything on that front?

Erik Mayo: On that point I really think, especially if you’re starting out, your point around being flexible about what do you want to do around your vehicle, your fees, giving up and having a founders share class. Whether you give up some equity in firm. Have those discussions and know immediately, and I’d say actually be willing to be flexible around all of that. I’ve been amazed when I talk to people and have said “Yes” as we where going out. We’ll be flexible around some of the stuff they’re like “Wow you’re realistic about this.” And I was like “Well, dollars are hard to get.”. It’s not 2006, 2007 where money is flowing. Right now, I had friend that we were talking yesterday and he was like “It doesn’t take more than 24 hours to see another article bashing hedge funds on Bloomberg.” And so you really have to do something to bring those dollars in and be flexible.

Paige Uher: So jumping to the second point about what your end goal is. I mean, we’ve touched on that a little bit already; but I think it’s staying true to that even along the path. Obviously a marketing plan is irradiative and it’s a living document and it should be in writing. I’m a firm believer in that. That way you can always bring it back in front of the team. You can have buy-in, and you can change course, of course correct as need be. But what’s really important again is always that five-year plan. What’s the end goal? And are you spending your time, spending your resources, using peoples talents internally to get you where you want to be?

And I would encourage you to not have that in-goal to be an amount. I really encourage you to have that in-goal to be what you want your product to represent in a portfolio of allocation for an LP and to find those LPs that align with that mandate. So that you aren’t different things to different people. And it also is being realistic about what your strategy is. Where’s your sweet spot in terms of capacity? And what is your phrasing around that? And how can LPs get comfortable with you as a firm, knowing that the product they’re invested in has a capacity constraint? Or that your sweet spot’s around 500 million to a billion. Because then you’re going to get the question of “What’s next?” Which is why that always having a five-year outlook from any point in time is important because they’re going to want to know “Is this your kind of one and done product? Are you going to expand? And what’s going to be the natural evolution of that expansion?” And always having those talking points in the back of your head.

Erik Mayo: Yeah. And you’re building a brand. So as Paige said, if you’re going out and talking and telling LPs different things around what you’re doing. They all talk. And the message will then get confused because they’ll talk to each other and one will be like “Well they told me this.” And the others like “Well he told me this.” And then everybody’s a little confused about what you’re doing and that’s often why you see limited partners come back and ask you questions they’ve asked you before multiple times. It’s either because you’ve been somewhat unclear or kind of fuzzy about that message or when they’ve gone out and done their own sort of offline due diligence with other people, they’ve gotten different answers as to what they’re doing. And so they’re trying to check to really make sure they understand what’s going on inside your firm.

Paige Uher: Absolutely. And not knowing your target market, this is all internal. So then test your assumptions before you hit the road. And this is what our networks are for. It’s talking to other marketers. Talk to LPs that are friendly to you and test your assumptions and to say “Listen are we being too creative? Is this coming across insincere, unauthentic, or too cute?”, for kind of lack of a better phrase. And that way you can… And, obviously doing research on competitors. What’s made them successful? What’s been kind of their key milestones? Not that you need to mirror that, be your own firm, be your own identity. But again, it’s having a clear path forward, testing that in the market before you go out, kind of full-court press, and then get surprised with a down side that messages aren’t being received as you thought. Due diligence questions that are coming back at you, you’re not prepared for. Or that your kind of gross expectations should be managed one way or the other. Whether that’s “Money’s going to be flowing in and how much can we accept?”, which wouldn’t that be a lovely problem to have [chuckle] for many of us. But more or so, is “How can we have a funded infrastructure so that we can scale as money does come in?”

Erik Mayo: And as Paige says, use the people in marketing and other teamsto really test your pitch. And especially, if you are doing something a little bit different, you have to remember that the investors, this is not what they do every day. And so it’s also going to be an education process, because no one is handing out money in hand doing something strange and different. And you don’t understand it, but trust me, they want to have a real idea and understanding of what you’re doing. And so use other people before you run out and do a giant road show to test and see if you can really educate people, and if you’ve got children, or cousins, or someone else, I’d say, test your marketing pitch on someone between the ages of 16 and 25. And if they can’t understand it, you’re not done yet.

Paige Uher: That’s a great point. I think it’s just a matter of remembering it’s about them; it’s not about you. You’re there to solve a problem that they have, and it happens to be through an investment product. But if nobody wants what you’re selling, you need to go back to the drawing board and again start internal reflect to get everybody on the same page before you go out.

Ketan Khandkar: Great. And this is Ketan here. So I think it’s a good time to maybe talk about how technology could help.


Paige Uher: Yes, so I can launch off from this one. So using the one-size-fits-all approach with prospects can be a problem just by getting their attention alone. And this isn’t saying that your messaging should change for the LP base. Although be educated. If you’re sitting across from a public fund, they have very different concerns of under-funded pensions obligations than an endowment that is over-funded, or a children’s hospital plan that has more cash flow than they tend to know what to do with, because people love to give to children hospitals. And so, these… And a foundation with a 5 percent annual giving rate. Each LP base has different concerns, and you need to be aware of those going in. That doesn’t mean that you need to change who you are for them, but just speak their language. And just speaking their language knowing they… Let’s call it the ‘taxonomy’ of that LP base, will have you stand out from the crowd, versus you going on auto pilot, and just bulldozing in.

But that’s saying that you even got the meeting. How do you get their attention to even get the meeting? And again, it’s not mass email. It’s not a phone tree and calling all the time, and just bombarding them week after week. Erik made this point earlier, we’re all busy people, we’re all wear multiple hats above and beyond what our titles might suggest, and investors are the same way. They have internal meetings, they have board presentations that they’re putting together. Believe it or not, they’re not just sitting by their phone waiting for the next fund manager to call, for the next hot idea that they can deploy capital to in a week. And so it’s using the acceptable methods of communication… And I say “acceptable” because I’ve actually heard from LPs that people are starting to get creative, and they’re starting to text, or they’re starting to find personal email addresses and G-chatting and that is, in my opinion, completely unprofessional, and not how most of these LPs want to be communicated with today.

Will that change in the future? Yes. Technology’s constantly changing, but today for the most part, email, calling, old fashioned mail, those are the official professional forms and acceptable methods of communication. But how you use them can really have you stand apart from other marketers. How much research have you done on that entity? Right? And there’s this balance of doing too much research before an initial reach out, but then if you actually get them on the phone and you know nothing about their organization, that was your one chance and they’re never going to talk to you again.

So do enough that you’re informed, you can have an applicable dialog to their needs, while highlighting the benefits of your strategy and how it can help solve their problems. Go back to the first takeaway, it’s about them, and keeping it simple. And quite frankly, all you’re trying to do in an initial reach-out is to get, “Are you interested, are you not? Do you go in my pipeline? Or you go into a hold pattern? Or are you never going to be a fit?” So in order to do that, Nick said this in the premise, “Do you know how many people don’t ask a question?” You send an email and you say, “Let me know.” I’m never going to reply to an email on the receiving end of that that says, “Let me know.” You didn’t ask a question. Is this something of interest? That’s a question that I can reply with a three-letter answer or a two-letter answer, ‘Yes’ or ‘No’. And no’s are just as valuable as yes.

And don’t drown the prospects, when trying to get a meeting. A perfect example, I was reaching out to an institutional consultant in advance of a trip to New York. And they didn’t reply. And I reached out probably once every two weeks leading up to that trip, they didn’t reply. I sent an email at the end saying, “Sorry we missed you on this trip, let me know if you’re ever in San Francisco. How can I best stay in touch?” Didn’t reply. I kinda put them on the back burner for a little while. Saw an article came out, said they were looking for emerging managers for their nonprofit client base. I reached out to a contact again using your network who I knew was on the board of this particular nonprofit that had enlisted the help of this consultant. Asked him to verify the story, I got it verified. Reached back out to the consultant. Cited the story that I saw and got a reply within 30 minutes and said, “Yes, we absolutely want to talk to you.” And then he came back later that afternoon and apologized for my five unanswered emails from the previous spring.

And it’s because I wasn’t going to pester him. I didn’t have any carrot to really dangle to get his interest, until they had a client really looking for managers in the space that we could neatly check the box, and we’ve been talking to them now for over a year and a half. And again, timing is everything about these communications. They had other needs, they had other responsibilities on their plate, and priorities, and this wasn’t one, until I highlighted that I knew what they were working on, we fit that mandate, does it make sense now to have a conversation? And the answer was yes.

Erik Mayo: And so to that point, if you’re sending email, don’t automatically add people to your performance email and especially not weekly estimates. Because what does that really do? Having been a person who sits on the other side, I ignore and delete almost everything you send, because it’s like, “I don’t care, I don’t want to look at this, this is just another thing filling my inbox.”

So like Paige says, reach out when you really have something specific to do, you’re helping them fulfill a need. Get that personal introduction, because I’m sure the person she reached out at that entity, then reached out back to the consultant and said, “Hey, they contacted me, you should really talk to them.” And that’s part of the reason that Paige got the quick reply. And so it is coming in, you don’t want to try to do an end run around the consultant, but if you can get the entity you’re trying to get in front of to give a warm introduction for you to the consultant, it can be helpful in a lot of this.

And don’t leave the 20 minute phone call outlining your strategy. And accept ‘No’. I had too many times, sitting on the phone, telling people, “We’re not looking for this, we don’t do and invest in long short equity.” And I would get 30 minute pitches. You’re wasting your time. We’re not going to do it. I may sit there and, pump you for information because well there may be another reason. You know, I’m looking for color on something else, but if I’ve told you no, it’s generally a no and sitting there and trying to convince me to stay on the phone or, that it’s different, is a waste of your time.

Paige Uher: Absolutely. This is where technology really has changed the game in terms of broadening your network to get those introductions and, being able to ask other marketers. I am a huge proponent of being friendly with, competing funds, and even people who aren’t competing. Because if I’m calling Erik… If I’m at the GP, and Erik’s at the LP, and I call Erik and he actually gives me the time, he tells me no, I’m going to respect that he said no but, I’m also going to ask “How can I be helpful to you? What are you looking at in this space?” If he says he’s looking at peer-to-peer lending strategies, I have three companies that I would just say “Listen, have you… I have not due diligence on these. Have you? Are these on your radar? I’d encourage you to reach out.” You’re giving them value for taking the time to talk with you, and you’re still, respecting the fact that, what you are representing today is not a fit for their needs today. Those things can change over time but you need to listen to the feedback you’re getting and move forward with other prospects. And Erik will remember that you provided him three referrals, of companies that you’re not even involved with, or associated with.

Erik Mayo: Yeah, yeah, okay. Yeah. Those… You’d be amazed. Those people who are helpful, you pick up their phone calls, because you know they’ve been valuable to you over time. And so, you know… Through multiple firms, through other stuff, and it makes me more likely just to say, “Oh, you know, they’re giving me a call. Let’s talk to them. Let’s see what’s going on.” You tend to actually, I would say, follow those relationships through firms more then you may even follow the firms. And so, especially if your marketing being somewhat valuable to them is really about you establishing a relationship and the rapport. As much as everybody says this business is about returns and everything else, it’s really, really, really about relationships.

Paige Uher: Yeah, it’s that access that’s important, and you keep those throughout. Yeah, even today… So, in my career, I’ve worked with the majority of the 20 largest, public pensions funds here in the US. I took this job two-and-a-half years ago and I basically turned off that network for professional use because we don’t market to public funds here and we probably will not, but I still have a lot of friends in that industry. I have a lot of marketers who are working those channels, still know a lot of the investment officers, know a lot of the consultants that work in that space. And stay friendly with them because this is a long life. I don’t know when our paths are going to cross again, and this industry is ever evolving. So, that network is dynamic and it’s your reputation. Especially if you’re sitting in the investor relation seat, because you will move firms, and you will represent a different product, and your sincerity, is what will be remembered.

And I know those of you sitting in investor relation seats, and those of you who are in the investment seat at different GPs. We’re in a, quantifiable industry. And so we always want to quantify our outreach effort. I mean, I’ve been told before that the difference between a good sales person and a bad sales person is that a good sales person made the 100th call, and the bad sales person, stopped at 99. I think that is an archaic way of looking at it. I think if you’re smarter with your network, if you’re smarter with your reach-outs… There is obviously a numbers game here. If you’re doing nothing but cold calling, yes. The more cold calls you make, you’re going to have a larger, absolute number of hits, but on a percentage basis compared to spending the extra effort and time to leverage your network and get very creative on how to gain access because what you’re asking for is an audience, right? You want to be able to tell your story. And the cold call is dead. We’re inundated with communication, personal email, work email, twitter, slack, LinkedIn messages, we have phone calls, text messages.

I mean I turn off my devices when I’m at work and my husband gets upset that I don’t reply to a text message in the middle of the day, but I just need to focus my energy on this channel and being very, cognizant of kind of working this professional network and giving back to that network, as well. So, for those of you who are getting pressure internally to measure your success, that’s part of your initial marketing plan that you need to have that conversation upfront. Before you ever take a job, I would encourage you to ask what the expectation of success is? How it’s measured? What it would look like? And be realistic. Again, it’s educating internally. How do we get there? Can we agree that these are important milestones? This is an appropriate time horizon that is realistic for the product, for the environment today, for the number of competitors in a certain space. Those are all things that need to be discussed and manage internally. Because you’re not getting call backs doesn’t mean that your product is not sellable. It’s probably something to do with your approach or that at least needs to be a consideration.

Erik Mayo: Or I’d say it is doing that vetting to find the right investors. People who actually want… And your network because they talk to a lot of people, will know. So, if you can cut down the amount of time you spend looking for things and people. People use the databases and other things and the Preqins of the world and they’re great, but they’re often wrong or dated. I sat on the other end and the Preqin people call you and they want something very specific. Sometimes that quarter you’re really not looking for something. You’re happy with your allocation, and you may be doing some general meetings, but they push you for an answer. And then you give one and you start getting calls on things and you’re telling people, “Look, we’re just not going to do this right now”. You have to accept that occasionally even these databases that are supposed to be up to date are wrong. But they are an additional tool in a toolkit you should probably be using.

Paige Uher: I agree.

Ketan Khandkar: Okay. So from a technology perspective, think maybe there are couple of points that we could touch upon related to this.


Paige Uher: Thanks and so moving on here. So, you know your target market. You’ve reached out to that target market in a very smart, deliberate manner. And so you actually now have a meeting. Somebody was interested. They want to meet and so, now you’re going to go face to face with them to kind of present your product. And how it sets within their investment goal. I’d say a lot of people go into these face to face meetings on auto pilot as well. Because you follow a pitch book, that’s been predetermined. If you’re at a big shop sometimes you have a separate marketing team, from your sales team that’s going to be on the road using the materials. And because of compliance, they want a one size fits all. And so you walk in with a pre-bound presentation, and you think “Well, this is just going to answer all their questions”. You don’t even know what their questions are, before you meet with them. Unless you ask. We don’t ask enough direct questions of each other anymore. The worst they’re going to say is, “We’ll figure it out when you get here”, or “Whatever you want to cover.” Or… The worse, is they just won’t reply. All of that’s fine, but at least make the ask. To make the most of their time, what would you like to cover in this meeting? And send the materials in advance. Erik, do you agree on that?

Erik Mayo: I agree. And I’d say send them twice. Send them when you schedule the meeting, and then send them the day of or day before. So that the person, they get to read it. And maybe they’ve read it three weeks ago, and then they’ve got the meeting, they can refresh themselves before they go into the meeting. And I think this comes to a point, I forgot to cover a little bit earlier, is you may even have two slightly different presentations, or the order may be a little bit different of your slides in the presentation you send, when you’re sending that e-mail to them the first time, to make that first contact. And what you’re really going to go through when you see them in person.

I used to hate getting the presentation where they’re like, “Yes. We do long/short equity” in the first couple of slides, and then you’re waiting and waiting and maybe in slide five, or seven, it’s like “We do long/short tech.” Or how do I find out why you’re different than the 20 other long/short equity managers who hit my inbox today? As to why I should talk to you, and even look at it to take a meeting? And so you have to understand, what that presentation and what the goal is for it to do. And so those two presentations should be structured differently. And God forbid, if you can, don’t walk through it page by page in the meeting. Pick out pages that you think are important and do certain things, and skip to them, and go to them. Don’t just walk people slide by slide. They’ll get bored, you’ll get bored, and they’ll be looking through your presentation for other stuff they think is interesting and not paying attention to a word you say.

Paige Uher: So, I’ve stopped using presentations altogether in meetings, and it’s been so freeing I can’t even tell you. I go into a meeting, and I send materials ahead of time, so they know what we’re going to be talking about. Sometimes they’ll have them printed out. I will have them in my briefcase as reference, but they stay in my briefcase. I also travel with my Surface Pro, that I can use as a tablet. And I always have it loaded, or materials that I might want to reference. And so to the extent that we’re talking about something relevant. Again, it’s a custom conversation to their needs. How can I put together a presentation that is customized to their needs, when that conversation is happening live? I can’t. What I can do is pull out relevant pieces of information to use as a visual aid specific to where our conversation goes. So I travel with a folder full of my materials, plus kind of individual handouts, plus everything is on my iPad or my Surface Pro, so that I can use that to re-enforce points.

And to Erik’s point, they’re not looking through an entire presentation, they’re not looking through a folder of information, while we’re having a conversation. And it’s much more engaging, we’re making eye contact, we’re having a dialogue, questions are being answered in a very direct fashion. And to the extent that a question can be answered, with a visual support I have the flexibility to do so.

Erik Mayo: And I started going around, and I’m a lot like Paige. I won’t use the presentation to have that conversation. But I’ve started walking around with just a few iPads, so I don’t have to print out presentations. because one, they get thrown away and two, they’re really expensive to print, and three, it’s a lot easier to have multiple pieces of information that I can then display. And so I use iPads, and an application where I can essentially control the presentation an what everyone is seeing as the presentation is going on and so I can specifically pick out, “Oh, you asked a question about this”. I can pull up a specific slide or handout and show that, so I can really drive the conversation. And then I used to love it on the other side when people at the end of the presentation, they’d just hand you a pen drive. So, if you haven’t filed the presentation or haven’t done one everything, it’s a quick and easy way of, “I can load it back up into my system with maybe some additional information”. And “Hey, now I have a little present”. because we all need pen drives and we all use them to go and do anything, when I need to pull something off or run and actually have something printed, I’ve got this little present that’s branded.

Paige Uher: Yeah, another way to stand out. So, in that conversation, you’re sitting across the table with the LP now, addressing their questions head on, and then they ask those awkward questions that you hope nobody asks. Or you’ve been asked those questions enough and you just cross your fingers that maybe they won’t bring it up. Those questions are about fees. Those questions are about liquidity, those questions are about employee turnover, asset flows. What was that big redemption last year? What’s your LP concentration risk? Do you have one LP that’s making up 40 percent of assets?

The reality is if you think ahead in this relationship, they’re going to find that information out eventually. They probably already know it if they’re serious about your product and your firm because they’ve already talked to their network as Erik pointed out. LPs talk to other LPs. So they already know it. And part of that is you’re being tested. How honest are you going to be? And bring those things up, because if you don’t address those issues head on in that meeting when you have the opportunity, the LPs going to draw their own conclusions from it. They’re going to go based on rumor, they’re going to say “Well, this person didn’t address it in the meeting, so I assume they don’t want to talk about it, so probably what I heard is true”. If there’s anything that you want to sweep under the rug, you need to roll that rug up and expose it early on, because there’s no need to waste anybody’s time. And to be quite honest, the LP is going to really appreciate your candidness.

And the other thing that point that is so often glossed over, if you’re in a meeting listening to somebody talk and you’re furiously taking notes, what are the easiest things to write down? That’s numbers. Any time you give out a number about your fund, about your firm, about your product, that goes on permanent record. If you put a caveat around that number, that’s probably not going to go in the notes. If you say that “We are an 8% to 10% performing product in a normal market environment. Today is not normal, we can probably expect some sort of standard deviation around it”, none of that went in the notes except 8% to 10%. And so when you under perform at 6%, you’re going to get a call. “Why didn’t you hit your target? What’s going on?” You have a couple of years of 4%”. “Yeah, not what you told me. I’m looking back here at my notes. Somebody came in three years ago and said it’d be eight to 10%. That’s what our expectation is, that’s why you got the allocation. You’ve had two years at 4%”. And then somebody’s left back pedaling. So, be very careful about numbers, whether it’s head count, whether it’s tenure, whether it’s performance expectations, risk expectations, number of expected positions in a portfolio. I mean, to say that you have 30 positions today with the expectation I’ll never be over 60 and then you come back two years later and you have 100 positions, that’s a problem.

Erik Mayo: And go with that also with your investment examples. If you talked about something with them last time and it didn’t go well, talk about it because if you ignore it, they’re going to note that down. Everybody keeps notes and people are actually better at keeping them and going back and checking against them than they have been in the past and so people take note of that. They’re like “Oh”, they’re not truly open and honest and there’s not full disclosure with me because they only want to talk to me about the good things.

Paige Uher: And while you’re in that meeting, the meeting’s concluding and you kind of have this warm, fuzzy feeling because they asked a lot of questions, they seemed really engaged, but unless you bug their offices or have friends, you really do not know how that meeting went. And so I always recommend to ask the direct question at the end of the meeting.

It’s like if you’re interviewing for a job and you really hit it off with one interviewer in particular, you don’t just walk away and say, “Okay, well, call me for next steps”. You specifically ask “What are the next steps? Do you see that I could fit in this organization?” And you were basically in a job interview sitting across the table from an LP if you’re representing a product. You are asking to work with them, for them to solve their problem. And you need to ask the direct questions. How should I follow up? When should I follow up? Do you want to be added to our distribution list? To Erik’s point, if they say, “No,” respect that. But you can still forward things along on a quarterly basis just to stay in front of them. And citing the fact that, “Per our conversation I have not added you to our distribution list but here are our latest reports in case they are helpful. Is there anything else you need from me at this time?” Always ask the question. And then, what you really need to gauge is, is there mutual interest to proceed because again, nos are as helpful as yeses. It’s beneficial for everybody’s time in the process. Anything else Erik?

Ketan Khandkar: Excellent. So from a technology perspective, I think we’ll just quickly focus on a couple of points there.


Paige Uher: Yes, thank-you. So now over-promising, under-delivering is pretty self-explanatory. But people fall into the trap all the time. Deliverables are not more important than being honest. If they ask for an attribution report that you know you don’t have, do not end the meeting and say, “Yeah, we’ll send that right to you.” Go back to your home office knowing that that doesn’t exist, and say, “Hey, we have to create this.” Just be honest. Tell them, “We do not have that report as you probably would like to see it today, but is that a necessity in moving forward? What can we provide in the interim?”

Work with them. Collaborate with them. Sometimes, LPs ask for things just to pretend that they’re still engaged when they really aren’t really… They don’t really need the information. And if you’re honest about what capabilities you do and don’t have… If you over-promise and you then you go back and you can’t get them something for a month, what do you think the LP is evaluating on that slow delivery time? They know you didn’t have it. They know you lied to them. And they know that while you’ve got it, they’ve lost some momentum. They have other priorities now.

Erik Mayo: Yeah. And this is really, really important, because they’ve got other stuff to do and so they’re not going to just pick up your stuff when you said, “I’ll get it to you next week,” and it comes three weeks and you call. They’ve got four or five, six other things to do and you’ve lost momentum in your process. So the key is to have as much of those things. Again, going back to using other marketing people, figuring out all the questions, figuring out what you’re going to need, and creating your own little data room so that when people make those requests, it’s quick. It’s easy. You can deliver. Because some of this is all about service, it’s not just about performance, and so that’s also what you’re selling. And that’s what the LPs kind of think they’re buying, especially the large ones.

Paige Uher: Erik, why don’t you tackle due diligence?

Erik Mayo: I sort of love this. And it falls into this be prepared. When somebody actually, really gets serious. And you get that, “No we want to move forward and we think we want to invest”. Or you’re a part of the bake off, make it easy for everybody. Imagine you’re the analyst on the other side. Guys who get into the bake off or the guys who make it easy, where they essentially answered all the questions that have to get into somebody’s investment recommendation.

And so as you’re talking to them over time, ask them about those things. What are the questions they have to ask and fill out? What gets worried about? What gets discussed at the investment committee? So, that you’re ready and you can hand them a document or an answer that they can copy and paste into their report. So, it’s the full DDQ, it’s having your set of marketing materials, it’s having the risk materials, it’s having a couple of investment examples written up because that is definitely something that is going to go into their report. So, that it makes it short, quick and easy and manages to use technology where it’s up in some kind of shared file and you can just give them access and you can give them access to it all. So, they’re not constantly asking you in the process, “Well, I got this, but we’ve got questions about that. Can you send me this information?” All you’re doing is slowing the process up until they’ll actually make the investment by handing the information over in piecemeal fashion. This is about getting the dollars in, so, make it easy for the person on the other side.

Paige Uher: And be sure to have references included with those standards materials. And then avoiding a communication vortex? In short, no, you can’t avoid a communication vortex with a prospect. It’s going to happen. An investor can be hot and then become unresponsive. They can also over-promise and under-deliver if they’re not the ultimate decision maker. Things that you need to find out in the meeting and you don’t know what their priorities are. Since you’ve met they could have five other things on their plate. But don’t lose hope, especially if it was a good meeting and you got all the positive reinforcement and they said “Stay in touch” and they gave you a timeline to do so. Just keep a steady direct drip, but don’t drown them.

I had one prospect that I met in a September, asked for a DDQ, sent that over directly. He looked at it, had some follow-up questions in October, he went radio silent until February and I reached out to him directly probably every other month. So, February was a natural reach-out time. But because he was our monthly distribution list and we use a mass email system we saw that he’s clicking on reports. So I knew he was still active, he was still engaged. I didn’t have to clutter his inbox or leave him a voicemail to know that, and I knew he was working on his own timeline. And it just so happens when I reached out to him in February, he wanted an update, the timing was right, took the call, made an allocation the next week. And sent an email to my boss the next month saying how much he appreciated not being bombarded and that it was extremely rare for marketers to be disciplined and listen to what the LP was saying and sit back and wait for them. And I did not pay him to send that email to my boss either, [chuckle] he did it on his own accord. But it was really reassuring to know that people do appreciate this, we’re all people in this business. And we got the money.

Erik Mayo: Yeah. In my experience, if I have to fight you off I stop returning your phone calls. So, you lose that relationship in a lot of ways. But also make sure that when you’re talking to people that we’re not just using you on the other side to suck out information. because I have to admit, I did this all the time. I’m interested in staying up on something I’m interested in but the firms not interested in at all. And because people just really, really want to have meetings. You just take meetings so that you’re like smart on a subject, but it’s not helping you and your firm move forward. It maybe just sort of helping that individual fulfill their curiosity so make sure that’s not going on and you’re not wasting your time.

Ketan Khandkar: Yep and from a technology perspective again, you can augment this as you’re going through this process.


Paige Uher: Moving on. Well, if you go into your sales and distribution process with a win-at-all-costs attitude, the firm is being set up for a long-term disappointment. And it’s hard to wait for two cookies tomorrow when you can have one cookie today, and I understand that, but it’s the difference between the firms that are in this for the marathon. And you have to set your sales process up so that you have a positive client servicing experience. That’s transitioning the relationships from sales to client service if those are separate. If you’re the same person doing both, how are you being incentivized? It’s so costly to bring on a new LP. Firms really undervalue the retention of those LPs in lieu of new money, and I think that’s really short-sighted. If I’ve spent the time grooming a new relationship, I want them as a client, and I want to work with them. Why would I ever put that in jeopardy of a new relationship that I don’t know how well we’re going to work together or if my product even solves their problem?

And so it’s really kind of instilling that mindset within your organization, making sure your practices echo that so that LPs know that they’re valued. The worst thing that could happen is you become a headline in three years, and, in the interim, those LPs that have been unhappy are talking. So if you’re in private equity and you’re going out for another capital raise and your first fund has been okay but you haven’t really treated your LPs with respect, they haven’t talked to a partner in the three years they’ve been invested, how do you think you’ve set your firm up for a successful fund raise for your subsequent funds?

LPs know what’s going on with other GPs. Again, they talk. It’s a small community. There is kind of this club mentality over certain firms and certain funds and getting access, and maybe you’re one of the privileged that there’s a waiting line, that there’s a velvet rope access to your investment team, but for the vast majority of people out there and firms out there, that is not the case. And so it’s how do you differentiate yourself but make sure that your promises are realistic and that you can meet those expectations, so that you can go back to the same LP base as your private equity fund and grow and expand and ask for referrals? If your sales process brings in aligned LPs and you service them correctly, it’s going to be a self-fulfilling machine of referrals that keeps generating new, aligned LPs along the way.

Ketan Khandkar: Yep, and from a technology perspective, what we also find is, again, making sure that they have a good experience.


Nick Donato: Yeah, we’ve got a few coming in, but I’m being conscious of time here. I’ve cherry picked two of the best so if I could get people’s responses in quick, concise answers. Someone is asking if, “Do you have a set target for how many LPs are met per week and, if so, how is that determined?” So, maybe Paige or Erik?

Paige Uher: No. It’s all custom. [chuckle] You wanted concise. No, it’s customized. Why am I going to assume they want to talk to… Why do I assume that any of my LPs want to talk to me on a weekly basis because nothing’s changing on the fund? Some of people don’t want to talk more than once a year, and I respect that.

Nick Donato: Yeah, that makes sense. And then another quick one. Sometimes information on an LP is hard to find. How do you typically achieve these insights? How do you stay on top of them?

Erik Mayo: This is where things like LinkedIn and other things really work for you. Use your network. Figure out who’s worked for them? Maybe you know a fund that they’re already invested in, so they’re talking to them. Use those capital introduction groups. Those people tend to talk to everybody on a fairly regular basis, and so they’ve got a pretty good idea. You can’t be lazy and just go to Preqin. You’ve got to really do a lot of other stuff before you go and find and talk to somebody.

Nick Donato: So that just about does it for time here. I want to give a really big thanks to both Paige and Erik for what I think was an incredibly insightful presentation. And thank you Ketan as well for showing us some of those specific procedures. As mentioned at the start of the webinar, a recording of today’s broadcast, including the slides, will be emailed to you in the coming days, so look for that in the inbox. And if you’d like to learn more about Navatar, and the suite of products that we offer, including Navatar Private Equity, and Navatar Hedge Fund, and how these products can help you fine tune your investor relations or marketing strategy, please do not hesitate to reach out. You can see my contact details on the slide there. So, on behalf of Navatar, I’m Nick Donato, and enjoy the rest of your day.