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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.

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

A quick note on how successful fund managers differentiate themselves to investors: information.

Investors seek clear, detailed information on fund managers from the very beginning of a prospective relationship. In fact, a lack of clarity in fund information early in the process is a red flag regardless of a manager’s history. Investors know you’re a potential partner when they are able to review details on fund strategy, track record, team and terms easily.

Make it easy by adhering to standardized methods in communicating fund information.

For real estate managers, INREV provides detailed guidance on presenting your track record.

For private equity funds, AltExchange has done a remarkable job of boiling down key metrics.

Use these templates to signal your ability to be a true partner to your investor.

Finally, take a look at the graphic by data provider Preqin: active investors appreciate proactive managers.

fundraising private equity real estate

Investors describe their preference for originating investments to Preqin.

Employing current technology to better communicate and organize yourself during the fundraising process will be appreciated by potential investors. Making a strong impression matters, and technology can make that simple to do.

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

 

By now it is not much of a surprise to hear how the focus from international investors has returned to European real estate.  What is somewhat surprising is the pace and magnitude at which this shift has occurred.  A glance at the headlines these days typically illustrates a refreshing return of liquidity to the European landscape.

In fact, over the last few years, many equity players were hoping at the outset of each year that those next twelve months would become “the year.”  That is, “the year” where debt was finally sold or re-balanced on underwater assets, enabling trades to occur.

Thus, by the time asset and portfolio trades began to happen in earnest in the second-half of 2013, the latent demand from equity buyers had been building for years.  Now, built-up demand finally evinces itself as a great wave of activity in early 2014.

Last Friday, Property EU produced an interesting editorial about “agnostic investors” being the primary force in the return to Europe.  Of course, agnostic does not mean “indifferent.”  Investors are looking for the best risk-adjusted returns in real estate and, as CBRE Capital Advisors notes, investors have four quadrants to choose from: public vs. private and equity vs. debt.

The massive amounts being raised for private debt funds give some indication of where investors are expecting to find those returns.  The existence of fewer traditional lenders (writing smaller tickets) has also enriched the opportunity for shrewd debt investors.

Institutional investors still need to find exceptional partners for their capital.  Investment managers still want to diversify and expand their investor base.  Both sides need access to a broader base of suitable partners.  Both sides need to close their partnerships quickly to take advantage of current market opportunities.

As we proceed into this fast-moving but propitious environment, managers and investors alike will benefit from deploying quality resources to craft the best partnerships.

Technology is a great accelerator. Sharp investors will use technology to their advantage in keeping pace with the current burst of excitement for European real estate.  Clever investors will use data to stay ahead of the market.

Winners in this terrain (among both investors and managers) will be organized and data-rich in identifying the best partners.  For all sides, effective execution of partnerships will hinge on proper communication.

How will you make sure the best managers are on your radar?

How will a judicious investor find you?

This is the Sterlinks blog. Access Sterlinks tools for your capital formation process by visiting http://www.sterlinks.net.

 

Software and technology offerings to the private equity industry are evolving rapidly.  A disparate set of choices exist for you, the intrepid investor trying to maximize time spent on accretive core activities (such as investing) while minimizing time spent on predicting software failure.  Often, you never know whether a solution will work for your platform until you try it, and by then, it’s too late – your team has spent hours in training learning to navigate complex input and output mechanisms. Time has already been spent accommodating finicky technical capabilities.  Some members of your team may opt out entirely, creating a rift in the flow of information.

Our ongoing chats with the global institutional investment community – investors, operators, and managers alike – make it clear: everyone needs better technology to advance mission-critical functions.  From Tokyo to London to San Francisco, and cities in-between, the institutional private equity industry is ready for good software.

Pick ten of your peers and ask them what kind of technology they use to manage capital partnerships.

Chances are, one or two of those ten will have adopted software to facilitate their partnerships with investors, operating partners and/or managers.  Typically, this is a “CRM” system, data room and/or portfolio management software.  (If you travel exclusively with those who do a relatively good job of keeping ahead of the pack, closer to six in ten of your peers may have adopted software of some sort).

You may find it interesting to inquire exactly how many of those folks are actually happy with their software choice.  You may want to ask whether (and in which use cases) the software adequately performs for them.  It is worth the investigation if you’re considering purchasing a system yourself.

We won’t deny that we’ve heard some horror stories.  And yet, to avoid technology at this hour is to play fast and loose in a highly competitive, increasingly sophisticated business environment.  Rodney June of the $21.8 billion Los Angeles City Employees’ Retirement System pointed out to us that technology decisions are an important component in evaluating a manager.  Tom Lopez of the $16.7 billion Los Angeles Fire and Police Pension Plan advises: don’t let technology get in the way of communicating quickly and effectively with your potential investment partner.

The fact remains that software for the PE industry is relatively new, highly fragmented, and broadly untested. However, smart investors will pick a horse and start moving up the learning curve sooner rather than later.

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