I was recently chatting with Eli Combs (www.axisga.com), a placement specialist that has raised billions of dollars of institutional capital for hedge funds, PE funds, direct deals, etc. He is a polished veteran.
We were discussing the number of times we have been in mutual conversations with hedge fund PMs, established and new, that are entirely naïve to the effort it takes to raise capital, nor aware of the steps necessary to improve their chances for success.
We can’t name names, however, over the last 5 years dozens of HF PMs have brazenly breezed through our collective doors looking for capital – some with hugely impressive resumes and good performance. We explain the process, the required tools, the time it takes, and the level of commitment necessary. Many PMs acknowledge the evolution of the industry and the need to be seen and heard. Interestingly, those that don’t tend to end up back at our door twelve months later, a bit beat up and a lot more humble – it is tough out there.
Can Eli and I make any guarantees? Absolutely not. The world doesn’t work that way. We can, however, dramatically increase the likelihood that a capital raise will be successful. Performance aside, all we require from a PM is a friendly ear and the recognition that raising capital requires a meaningful investment in their marketing, a comprehensive and thorough sales process, and a commitment of time.