The fundraising process: Marketing & differentiating your fund Internationally

Here are some key elements of the Institutional Marketing Process

  • Scope – Unless you have a “hot” fund, you will have to contact a large number of potential prospective institutional LPs
  • Professional materials – You will only get one opportunity; use it wisely
  • Disciplined process – You need to have a disciplined process to interact with hundreds of institutional LPs
  • Preparation – Be prepared for the breadth, depth and time required in an institutional diligence process; document everything to ensure follow-ups are done in an appropriate and timely manner

Positioning the Narrative

Investors will have preconceived notions about your investment opportunity; the goal of your narrative is to shape their thinking. The key elements to differentiating your narrative lies in the following factors:

  • The Opportunity – Is the market large enough to support this strategy?
  • Investment Strategy – Is your team’s investment strategy attractive on a relative and absolute basis?
  • Team – Is your experience of your team relevant to successfully executing your investment strategy against the market opportunity?
  • Track Record – Does your team have an applicable historical track record?
  • Fund Size – Is your proposed fund correctly sized for the opportunity and strategy?

Marketing Materials

Presentation – The following sections are key to a strong presentation

  • Executive Summary – An introduction to the opportunity, strategy, team, track record
  • Investment Opportunity – An overview of the opportunity and its attractive qualities
  • Investment Strategy – Why is your strategy well-positioned to execute against the opportunity?
  • Performance – Detailed summary of the firm’s investment track record
    • During the presentation, verbally discuss expected future liquidity and/or valuation changes
  • Team – Backgrounds of the team
  • Case Studies – Detailed descriptions of transactions that are representative of the strategy
    • Try to strike a balance between winners and losers Other key marketing materials include track record, case study of a portfolio company, PPM, data room.

Other key marketing materials include track record, case study of a portfolio company, PPM, data room.

Managing meetings with investor

  • Begin by asking time allotment
  • Prepare to give a 30, 45, and 60 minute version of your presentation
  • Confirm the agenda of the meeting
  • You may have delivered the pitch many times, but this is the first time the LP has heard it; create a dialogue—not a monologue
  • Use anecdotes with actual portfolio examples; be specific about value-add
  • Acknowledge your failures—cite the lessons learned and how you will
  • Implement these lessons moving forward
  • Do not disparage the competition; emphasize your strengths instead

To understand what questions to expect from LPs during the fundraising process, what elements are important in marketing materials, and how to plan your conversations with investors, read the full article here >