How can a fund manager make a capital-raising story persuasive to family office investors?
Short answer: For a $50 million blind pool that may run a dozen years, the story has to make the commitment understandable before investors know the assets or see every exit. (Timothy, around 430 seconds)
At a Family Office Club interview, Andre Sospino asks Timothy Cunningham about raising capital from family offices and explaining a fund to investors.
Timothy on a fund's story
Timothy says investors need a story to understand what a fund is doing. He says managers have to know what the investor wants, then explain the fund in those terms.
Timothy on the investor's problem
Timothy describes a narrative as a protagonist facing a challenge and overcoming it. For a fund, he says the manager is the protagonist, the challenge is the problem the strategy addresses, and the commitment is part of the solution.
Timothy on a manager's origin story
Timothy says a manager should explain who they are and why they have a connection to the strategy. He gives the example of a Brazilian fund manager whose family and upbringing were tied to farming, but who had not included that background in his story.
Timothy on market positioning
Timothy says managers need to understand what others in the market are saying and explain what they do differently. He recommends showing a generic map of the market, such as where a fund sits by development stage.
"And you have to know what the investor wants. It's not just numbers, you know, they they need to they need they need a story to understand what you're doing."
From Richard's exclusive Billionaires.com interviews
Lessons from Richard C. Wilson's one-on-one interviews, as published on each interview page.
- Michael Lee-Chin: Learn from the best role model. Find the best role model in the world and ask how they did it. Then follow their recipe exactly without changing it.
- Serg Bell: Success comes from many decisions. He does not see business as one winning bet. He sees it as a long game, like poker or bridge, built on many smart choices over time.
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Frequently asked questions
How can a fund manager make a capital-raising story persuasive to family office investors?
For a $50 million blind pool that may run a dozen years, the story has to make the commitment understandable before investors know the assets or see every exit. (Timothy, around 430 seconds)
Who usually takes part in early manager selection?
Timothy says a CIO often isn't involved in the initial stages. Managers may first deal with investment staff. (Around 345 seconds)
Why pursue institutional family offices for larger raises?
Timothy says institutional investors may commit larger amounts, which can increase total capital raised. He describes that approach as process driven, while relationship-based fundraising tends to happen one connection at a time. (Around 235 seconds)
Sources
Quotes are copied from the video captions and checked against the transcript. Timestamps link to the moment in the video. General information only, not legal, tax or investment advice.