Fund Manager

“One thing we've learned is if we're going to step into a burning building, it's helpful to have lived in the neighborhood before. We've had great experiences stepping into burning buildings in our portfolio, less good experiences stepping into new burning buil…”

“One of the things that we do with all the managers that we work with, we'll share our memo with the managers before we invest. We'll have all the work done. We'll run it by them. We want them to fact check our work.”

“No one gives a when a big fund manager or a big bank or some kind of dark pool of capital loses, loses money. But when it hits the consumer, when it hits the individual, then there's this rush to protection.”

“This idea that, oh, woe is me. I can't raise a third fund. I've never returned any capital. Tough luck, right?”

“Trying to find people where the answer is not just they had money is really important. That's true across the private investment world is there are tons of people with money. There's tons of money out there. You need to ask why the people that are making the d…”

“I think at the end of the day, when we talk about behavior, if you're being paid the incentive off of your gross return, that's what you're going to focus on.”

“And having scarcity sometimes gives me more confidence in the manager because they're not overextending themselves”

“What I appreciate is when folks come in when they're not fundraising, it sets up a fundamentally non-transactional relationship, or can, obviously not always.”

“The other thing that's important to think about as a fund manager that I don't think is obvious is that even if the best strategy is to invest in pre-seed, seed, and post-seed, there is a lot of value to, at least from the external perspective, having a really…”

“When I contemplate why the combination of high active share, concentration, and volatility tolerance yields alpha over time, it's simply because it's too damn hard for most people in our industry to actually invest that way. It's too damn hard for managers to …”

“A lot of times managers that are willing to negotiate With you on fees are not managers you'd want to invest in.”

“And I think the LP base can be a source of edge for managers, depending on who's in there.”

“I think one of the downsides today interviewing and vetting managers is that you come to the manager's office, you're walked into a conference room, sitting by yourself, they come into that conference room, they control the environment totally, and Back then i…”

“Be different. Take risk. Don't play it safe. Have a deeply held thesis and just put it out there. Be shocking. Don't be a sheep. Don't follow the playbook.”

“For a fund, you want to meet with an investor who's running at least a hundred million in order for it to make sense, because at that level, you can get a large enough allocation from them that it's worth the time and energy, because this is not a quick sales …”

“I think, again, a big red flag is somebody who almost religiously sticks to the process over time, even when market conditions have changed.”

“We definitely don't expect a new manager to necessarily be focused on these issues, the point of investment. I think many of our managers are quite small boutique type fund managers. I think what's really important to us is that the manager is receptive to the…”

“I think every successful fund manager has been selective about who they accept as clients or LPs. And that's really what it is. It's the stability of your investor base that's going to give you that endurance.”

“And I think a lot of fund managers, when they get into problems with their investor base, with their LPs, it's because they have given their LPs, their investors, a false definition, a false sense of what the risks are going to take. You might have a fund mana…”

“If you get money from endowment A, endowment B, endowment C, endowment D, that all, like, are very close to each other and talk to each other, and then one of them leaves, Then they might all leave. So having diversity of, like, mindset”

“If you're asking me, you're raising a fund, I think you don't want to have too many LPs, but you also want to have diversity. So I think probably max out ideally at least at scale at call it like 20% would be a lot.”

“Usually that hunger dissipates after success, and you probably want to be off manager before that hunger dissipates, but it takes an incredible amount of fortitude to say, To someone across the table, hey, I know you're getting rich, sloppy, and lazy. You're n…”

“The ones that you have today will not be the people who take you to the next opportunity for five years from now. It just won't be the same people. If it is, great, but it probably won't be.”

“I think the biggest mistake I made at Yale over the years was managers that had some strategy drift in their portfolio, and because they had done very well in a different strategy, we gave them a little bit of too much of the benefit of the doubt, and I wish w…”

“Money is more about, I would actually index trust more than returns.”

“A lot of them make their money out of management fees and not so much on carry.”

“I think, and history's shown me, that it's very hard to get an investment committee to agree to firing a manager when their performance is stellar, or to not re-up With a manager when they've got absolutely shoot the lights out numbers, but in our view, they'v…”

“The idea is for a lot of fund managers, To take some lessons from a fundless sponsor, leaning into taking more co-investments so your fund dollars go longer, you're buying yourself more time of capital deployment, while at the same time, you're also increasing…”

“Now, the single biggest mistake I see fund managers make is they go out to fundraise with too high a target fundraise.”

“Some of the best time to add to a manager is when they're down, as long as they haven't gone dumb overnight.”

“What is hard is that you're always looking at managers who have done well recently. That's why they're raising capital. So you have that behavioral bias, you want to get in, And you're willing to overlook things that in retrospect were always there.”

“I think understanding the person Is as important, if not more than understanding their investment strategy. And I would argue in some ways, the core characteristics of the person are more likely to stay the same than that of markets.”

“Research that shows that, for example, managers, founders from poor Backgrounds tend to outperform managers from richer backgrounds, or managers that lose a parent young, or have divorced parents, or face adversity young, are better performers.”

“Once you're successful, you go from competing on performance and self-improvement to competing on status or legacy. And that's all great for humanity, but I'm not sure it's great for performance. In your day job.”

“I think one of the things people get wrong in trying to pick managers is they try and argue with a manager about a particular stock pick. And if the manager agrees with them about the stock that they've got, then they're a good manager. And if they don't agree…”

“It's an intensely human business investing. And the pattern recognition that comes from doing it for a long time is to be able to sort of dive underneath what you see initially. And you can learn this through references, but you can also learn it just through …”

“One would be misalignment, which is unavoidable, but something that drives me crazy every time I see it. And two would be when managers promise something and then five years later forget that they made those promises and do something else.”

“The incentives are there and LPs at the end of the day, if someone is making them money consistently, Are going to continue to give those funds money and somebody's going to, there's no question about it. No matter what amount of bad behavior there may be, if …”

“Recently, there was a fund manager who was prosecuted and is going to prison for six months for a criminal infraction in a bankruptcy case.”

“I don't know any manager that has successfully traded around a long-term compounder and really juice the returns by buying it 12 times earnings and selling it 25 times earnings.”

“My view is that most Managers, few managers have more than 10 or 20 high convictions at any one time.”

“Getting a strategy that makes money is different from getting a strategy that is relatable by you as a fund manager and repeatable by you as a fund manager.”

“There's a lot of time we observe their stewardship team or like engagement manager go to meet their CEO without even knowing whether their fund actually owns that company because the fund manager trade in their own discretion.”

“I'd like to see more diversity in fund managers, and the reason for that is simple. It drives better returns”

“In a time like this where things are rapidly changing and we're going to be required to communicate with our committees and asset owners, time is too precious to have a manager meeting.”

“I think our space has been one of the biggest problems or challenges with our space is very few fund managers have actually been successful in giving back money.”

“If you really want me to read your email, summary bullet points at the top. Not five paragraphs.”

“It's actually funny because one of the rules of thumb is, oh, if somebody's going through a divorce, go ahead and submit your redemption, but in reality, a manager getting married has a worse impact on performance than divorces do”

“If you don't have the people right, everything else doesn't matter at all. In fact, in some cases can be worse for you.”

“The only way to really know if somebody's good is to dive into a stock. And so you have to be up on what's going on in these stocks to be able to really have deep analytical conversations.”

“And so our pitch is, we were once in your seat. We know what it is to be in your seat. And we really believe in your ability to generate returns for us. And we are longstanding partners, and we are here to help.”

“LPs do look to new fund managers to commit a certain percent of their own capital to the fund. So if someone's trying to raise a fifty million dollar fund, for example, that could mean that there's this expectation of a one to two million dollar GP commitment,…”

“What I might have done differently would be to introduce The dynamic that this might be a difficult conversation. This is sort of unexpected. ... Unexpected, difficult, with no judgment about you personally, or your business, or just try to get them on the sam…”

“When people are thinking about investing, they need to think about what they're doing, how it correlates to the rest of the portfolio. Is this really what we think it is? And really look at the quality of the returns, and it's a much bigger thing than that. Do…”

“The three things that will kill you are ego, speed, and leverage, right?”

“When you're sitting across from a manager and they're trying to explain their very fancy strategy, using all these buzzwords. That mean nothing. It's like, no, let's talk about this. I'm going to give you a dollar. You're going to turn it into more than a doll…”

“For us as a direct secondary buyer, just for our model, we're more interested in buying typically from employees or departed employees just because for us as an investor in funds, if your fund manager is selling out into a secondary, it's not a great sign for …”

“Usually just using more debt gives the LPs more risk and more upside for the manager. But with a lot of downside risk”

“The vast majority of fund managers, not surprisingly, show evidence of loss aversion around exit timing when prices have been on a negative trend, or a positive one if they're short. So when the price is moving against you, the tendency is to hold on for too l…”

“And the first two, while they're about deterioration, the last one, liquidity deterioration, is about being in business. And it's the only fatal one of the three choices. And so, for example, I've yet to see a manager that has experienced a significant liquidi…”