If you’ve been watching this space, you know that over the last several weeks, investors on Sterlinks offered us general feedback on what makes for good meetings with investment managers.

Here is the final installment advice as you prepare for your next meeting.

Third in our three-part series, this is feedback you don’t always get to hear directly from investors after you meet with them:

  1. Don’t spend 10 minutes trying to get hooked up to the overhead projector while everyone waits. Time is too valuable, and unnecessary delays set a bad tone for the rest of the meeting.
  2. Don’t devote too much time to finding out personal information.
  3. Being overly familiar can make for an awkward or uncomfortable meeting.
  4. When speaking, be organized and conscious of time. Present properly.
  5. Avoid going off on any obscure point.
  6. Show that your platform brings a team, not just one ego.
  7. Related to #6, don’t dominate the conversation away from the rest of your team.
  8. Name-dropping is generally a bad idea, avoid it as much as possible.
  9. Fictitious urgency is easily detected. Real urgency sometimes does not matter.
  10. Investors often know each other and may chat. Their discussions may cover conversations they have had with you.

One final pro-tip from successful managers: practice with mock questions and answers. Video-tape mock question-and-answer sessions to refine your team’s verbal clarity and body-language.

Rest assured, the investors who provided this thoughtful feedback are eager to identify and forge relationships with the best partners they can find.  They want to know about you.

We hope you enjoyed our collection of feedback on investor meetings. Even as we conclude this series, investors continue to offer us nuggets of wisdom regarding investor communication. Stay tuned for more on this topic.

This is the Sterlinks blog. Access Sterlinks tools to maximize your in-house resources by visiting http://www.sterlinks.net.

real estate private equity fund raise capital

Source: New York Times

 

Over the last several weeks, investors on Sterlinks offered us their thoughts on the best meetings they’ve had with investment managers.

We took their feedback and put together a list of key takeaways for you to keep in mind as you prepare for your next investor meeting.

This is the second installment in our three-part series on how to have a good investor meeting.

This time, we have some general guidelines for navigating your conversations with an investor:

  1. Know your investor: focus your resources on investors who are positioned to be a partner to you.
  2. Related to #1, understand basic guidelines around an investor’s investment policy and current investment mandate.
  3. Be able to convey your team’s strategic focus (and portfolio fit) concisely.
  4. Have a clear idea of what you plan to do.
  5. Understand what you do well.
  6. Be aware of any weaknesses in your platform and/or challenges in the execution of your strategy.
  7. Put your strategic focus in the context of your track record.
  8. If mistakes were made, acknowledge them.
  9. Where possible, explain how mistakes were fixed.
  10. Show that providing information is a priority.

Next: what no one told you about how to have a good investor meeting.

Part 3 will give you the advice you probably didn’t get from previous investor conversations.

This is the Sterlinks blog. Access Sterlinks tools to maximize your in-house resources by visiting http://www.sterlinks.net.

real estate private equity capital raising

Source: New York Times

 

 

 

 

 

 

 

 

 

 

 

 

Throughout April, investors on Sterlinks offered us their thoughts on the best meetings they’ve had with investment managers.  In turn, we put together a list of key takeaways for you to keep in mind as you prepare for your next investor meeting.

First, the absolute basics regarding content to cover in an initial investor meeting, usually with a presentation.

Below are some sections to include in a first presentation to an investor (as applicable to you).

  1. Executive Summary: Summarize the investment opportunity, including firm history, team (investment platform), high-level achievements and other highlights of the opportunity.

  2. Track Record: Recap your investment activity and performance to date. A table summarizing your portfolio(s) is best-practice here.

  3. Investment Opportunity: Provide an overview of the opportunity you are presenting, including macro/micro drivers and trends, favorable market positioning, unique aspects of your platform, etc.

  4. Investment Philosophy: Succinctly describe the strategy that guides your investment process. This can include investment criteria, targeted asset characteristics and tactics.

  5. Investment Process: Review key elements of your investment process, such as sourcing of investments, underwriting, financing, investment committee, asset management and disposition.

  6. Pipeline: Characterize representative transactions either by describing actual opportunities in the pipeline or previous investments that resemble future investment activity your team may undertake.

  7. Case Studies: Offer a sampling of historical investments that demonstrate your team’s skill and experience.

  8. Offering Terms: Outline the essential points of your investment offering, such as the targeted return, commitment period/term, expected leverage, distributions and fees.

  9. Team Biographies: Condense the bios of senior management team members into relevant experience and achievements. This level of detail can also be provided in an appendix.

  10. Appendixes: Extra detail on any section can be provided in an appendix.

  11. All of the above should be kept to a concise and bulletized format.

Next up: best practices for any investor conversation.  Part 2 will address common wisdom for communicating with a potential investor.

Part 3 will get into the feedback that you probably never got from an investor.

This is the Sterlinks blog. Access Sterlinks tools to maximize your in-house resources by visiting http://www.sterlinks.net.

Sterlinks subscribers can read more about how cloud technology is changing the game for real estate investors, in my piece for the PREA Quarterly this month.  PREA subscribers will also receive a copy of this piece.

Not a Sterlinks member? Visit http://www.sterlinks.net and request login details.

 

Last week Norges Bank Investment Management (NBIM) – the entity that controls Norway’s $890 billion wealth fund – announced that it would be ramping up its investment into global real estate.

The fund has been permitted to invest into real estate since 2011 and at the end of 2013 held 1% of its portfolio in real estate. However, because its target allocation is actually 5%, it will seek to invest 1% of its fund in each of the next three years.  Yes, $27 billion looking for real estate investments during the next three years.

There are a few interesting components to their strategy.  First, NBIM staff dedicated to real estate will increase to about 200 people – a lot more eyes, ears, and hands to source and manage their real estate investments.  Geographically, most of NBIM’s recent investment has focused on the US and Europe and they will now look at other major markets in Asia and “global cities outside Europe.”  This could include a more direct stake in emerging markets.  Finally, NBIM will be doing fewer JVs and looking to manage fully-owned properties, plus an increase in active involvement with development.  Part of this strategy will also be seeking public-to-private transactions.

Not only does this story underscore some of the trends identified in our earlier posts in this space (e.g., Capital Surge), but it is also interesting to think about its impact on the marketplace.  NBIM’s activities could be seen as a significant competitive presence to other buyers and sellers of real estate investments. Plus, the weight of capital in the more attractive markets may affect pricing and risk-adjusted returns.

NBIM, as stated before, plans to increase the number of staff dedicated to real estate to approximately 200 professionals.  Regardless of the number of staff dedicated to an investment strategy, the ability to manage information between team members and coordinate intelligence-gathering is critical.  While investors continue to seek ways to automate paper-based processes and access broader data, they are also looking for ways to quickly and efficiently distribute updates within their own organizations, no matter how small or large.   Accordingly, transparency and communication is the hallmark of the most adept fund managers. Today, cleverly designed technology infrastructure can go a long way in supporting highly effective investors and investment managers.

This is the Sterlinks blog. Access Sterlinks tools to maximize your internal resources by visiting http://www.sterlinks.net.

Previously in this space (“Capital Surge” and “Capital Surge: Part 2“) we’ve discussed a couple of interesting conclusions from the Cornell University’s Baker Program in Real Estate & Hodes Weill study the “2013 Institutional Real Estate Allocations Monitor” in relation to more recent news.

A third key take-away from the survey that caught our attention is the shift towards an increasingly global, cross-border investment strategy for many institutional investors. One of the more revealing stats is that Asia-Pacific investors are currently under-invested by 130 bps and also plan to raise their targets by 140-150 bps (i.e., almost 300 bps of their portfolio’s total size will be newly invested in real estate in the near-term).  So, don’t be surprised as this set of investors ramps up their investment quite rapidly.

In addition, despite being not as under-allocated, 38% of North American investors (compared to 24% of investors from Asia-Pacific) revealed their intent to increase their investment into private real estate during 2014, according to data-provider Preqin.  So whether capital placement is driven by need or want the conclusion remains that capital placement certainly will be on the rise, and not only in investors’ back yards.  For instance, of the North American investors seeking investments in the next 12 months, 38% are targeting Europe, which is up from 17% a half-year ago. 60% of Asia-Pacific investors are aiming at Europe, versus 39% a half-year ago.  Those are impressive jumps.

Furthermore, CBRE released a report earlier this week regarding Middle East capital flows into real estate (“In and Out – Middle East”). This research report anticipates a substantial amount of capital flowing from that region over the next decade.  CBRE estimates $180 billion will be invested by Sovereign Wealth Funds (SWFs) and private investors from the Middle East in Europe (80%), the Americas (10%) and Asia-Pacific (10%). The domestic markets don’t have nearly enough volume to absorb the SWF’s investment targets, hence the capital predominantly goes internationally. By comparing this amount to the $45 billion invested between 2007 and 2013 we can begin to understand how significant an increase it is.

Therefore, in order for these investors who are escalating their investment volumes internationally to invest further and further from their front door, it requires technology to bridge that geographic gap.  Evolving technology will allow institutional investors to use their resources effectively from a central base – for both identifying & sourcing investment opportunities as well as organizing multiple due diligence processes efficiently.   Moreover, investment managers can benefit from the same technology by being able to extend their marketing reach to capital partners further afield.

This is the Sterlinks blog. Access Sterlinks tools to maximize your internal resources by visiting http://www.sterlinks.net.

For Immediate Release

For Immediate Release

CalSTRS Adopts Sterlinks Due Diligence Technology and Joins Sterling Analytics Advisory Board

Sterlinks software platform offers California pension plan investment team broader market data, enhanced transparency with investment managers, and longer-term visibility on potential investment partners

SAN FRANCISCO, June 10, 2014 — The California State Teachers’ Retirement System (CalSTRS) this week adopted Sterlinks, a cloud-based utility that automates due diligence and analytics on investment opportunities. Sterlinks is the flagship technology product of Sterling Analytics (http://www.sterlinganalytics.net).

In addition to adopting the Sterlinks platform to expand and improve CalSTRS due diligence capabilities on global real estate investment opportunities, investment officers Josh Kawaii-Bogue and Kevin Bassi will represent CalSTRS on Sterling Analytics’ Advisory Board.

CalSTRS is interested in leveraging technology and data to improve its investment process.

CalSTRS expects to use the Sterlinks platform to augment internal resources and reduce costs related to travel, document retrieval and administrative tasks.

“We believe Sterlinks gives the CalSTRS investment team access to a broader set of data and analytics related to investment opportunities, fund managers and operators.  This will support our investment staff in navigating complex global real estate markets where access to the best local expertise and market data can be an advantage,” said CalSTRS Director of Real Estate, Mike DiRe.

“We hope to use the data and analytics gained from the Sterlinks platform to supplement our research on major investment decisions related to our $22.4 billion real estate investment portfolio,” said Investment Officer Josh Kawaii-Bogue.

“CalSTRS leadership is charged with steering the second-largest pension fund in the U.S. We look forward to supporting them with technology to achieve their investment objectives effectively,” said Meera Balakumar, Director of Sterling Analytics.

The Sterlinks platform will offer the CalSTRS real estate team the following principal tools:

  • Partner Due Diligence hub: to centralize and automate due diligence on global investment managers and operators;
  • Sterlinks Notebook Client Relationship Management (CRM): to track and manage new and existing investment relationships; and
  • Network Builder: for desktop and mobile-enabled networking with global real estate investors, managers and operators.

About Sterling Analytics

Sterling Analytics provides institutional investors with technology tools designed to help them identify investment partners, build intelligent partner relationships, and manage partner due diligence. Sterling Analytics’ flagship next-generation due diligence software, Sterlinks, is tailored to the needs of the institutional investment process. The Sterlinks platform integrates client relationship management (“CRM”), networking, due diligence and analytics to strengthen and build capital partnerships.

About CalSTRS

The California State Teachers’ Retirement System, with a portfolio valued at $183.8 billion as of April 30, 2014, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. CalSTRS serves California’s 868,000 public school educators and their families from the state’s 1,600 school districts, county offices of education and community college districts.

Contact:
Sterling Analytics Press Team
+1(415) 868-5391
info@sterlinganalytics.net
www.sterlinks.net
www.twitter.com/sterlinks

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