What makes a private equity fund stand out with investors? At SuperReturn Emerging Markets in Amsterdam yesterday, a panel of experienced LPs and advisers shared their advice to help private equity funds stand out when fundraising.
Their top tips included:
1. Why fit in when you can stand out?
LPs may see 100 different funds for each one they invest in. That’s a real challenge for GPs. You need to see things from the LPs point of view and rise above the noise. You want to be in the top 1% of funds they see. All the tips shared here will help you be seen as a Top 1% Fund.
2. Clear Communication is Key
Many GP marketing materials are too complicated and too hard to understand. Top 1% Funds have simple, consistent, clear communications. That includes the messages about the fund, the marketing materials and the communications that follow a meeting with the LP. Top 1% Funds communicate succinctly and clearly. They make it easy for the investor to understand what makes this fund different.
3. You Must Know Your LP
Top 1% Funds research and study their LPs. They know the LP’s investment mandate. They take time to understand the LP and to track changes at the LP. In that way, Top 1% Funds adapt their pitch to those they are talking to. Both LPs were clear that the most important communication you have with an LP is when you are NOT fundraising. “That how trust is built”
4. Show How Your Team Will Help Deliver Returns
It’s all very well to have a blue chip experienced team. But Top 1% Funds are clear on explaining how their team’s background helps deliver great returns. You need to make that connection for the LP and show what it is about your team and their experience that makes you a Top 1% Fund.
5. Listen More Than You Talk
Top 1% Funds have high emotional intelligence. They listen carefully to their LPs. That’s not just listening to what is said, but also hearing what’s not said. Top 1% Funds will listen to non-verbal clues as much as verbal clues.
At Benjamin Ball Associates, we have been helping PE and VC funds be seen as Top 1% Funds for 10 years. We do this by polishing how they pitch themselves to investors. We help refine investor messages, clarify pitch documents and coach pitch teams so that investors are impressed.