PFM_Logo copy

January 2018

Every manager that we work with at Perkins Fund Marketing asks us hundreds of questions during a marketing assignment seeking advice, tips, best practices, etc. The following are just a few helpful tips for managers to consider during fundraising.

1. You are Asking the Investor for their Money so… Be Prepared! (a) There is no excuse to not being able to answer standard alternative investment questions. (b) Know as much as possible about the investor, beforehand. (c) Be conscious of how much political capital the investor may need to use to invest in your fund.

2. Investors own the Bat and the Ball. Investors expect transparency and some give it – but some may not. A potential Investor may not tell you that: (a) they know your major competitor (b) they just met with someone who convincingly pitched them the exact opposite idea (c) they do not have any fresh capital. Sadly, some investors will simply waste your time for a myriad of reasons.

3. Ask “How Much Time Do We Have and what specific ideas/topics/points do you want to make sure we cover in this time?” If you are not considerate and aware, this will be your last meeting.

4. Make your Meetings Interesting. Many Investors take hundreds of meetings each year. Most of their meetings are boring and go nowhere. Make their day.

5. Keep It Simple. Stupid. If the investor cannot easily repeat your pitch to his/her boss and colleagues, game over.

6. Answer the Question. When a manager takes a long time to answer a question, or does not answer it directly, the investor thinks the manager is lying or unprepared or both. This is unforgiveable.

7. Let. the. Investor. Speak. If you are doing all the talking, the meeting is bad. People (including investors) love to hear themselves speak. And hey, you may just learn something.

8. Everyone has a “Good First Meeting”. Seriously. Investors are generally polite – even when they think the manager is an idiot. The goal is to get to the next step. The Investor may finish the meeting by saying they enjoyed the presentation, the strategy is interesting, etc., yet never returns your call again. Sorry but this happens.

9. End the Meeting with Next Steps. You should wrap up the meeting in a way that the investor can repeat your story. Importantly, however, you should attempt to know what you and they will do next.

10. If the Investor likes your pitch, it is just the Beginning. Institutional investors will need more information and materials than are needed to understand the strategy and how it fits, etc., but as the carpenter says, “measure twice, cut once”.

Do these well and you may be off to the start of a long- term relationship.

J. Douglas Newsome, CFA
Managing Director, Director of Research
Perkins Fund Marketing LLC