emerging managers

“Because venture has such a long feedback loop, that you're going to be on the third fund before you really even know, and that gets back to, like, how are you going to size if you do decide to do some emerging manager? How do you size it so that you're not, wh…”

“The way that we have structured the compensation, all the way up to about fifty million, basically you take 30% of the profits, and there's no hurdle. Over fifty million, we start to impose this logic of a hurdle, and the reason is because at that point, the q…”

“So a lot of emerging managers tend to go to market way before they're baked. And it's interesting because structurally the industry propels them to do so. So for instance, in public markets, you have, you know, cap intro teams and private markets, you have pla…”

“When these investment firms fail, they don't actually fail much. There's many ways to protect downside across asset classes. And when failures occur, it tends to be pedestrian, uninspiring performance, or it's related to the team gelling Or it's really not ver…”

“I don't understand, by the way, how people who are building new programs today, and they fly out from Ottumwa, Iowa, and go to the Raise Conference, which is one of the big showcases of emerging managers, and make bets. I don't understand how you can do that w…”

“And I think that dynamic is something if I were an emerging manager would want to be all over studying that, but then bringing new strategies to market and being able to convince LPs what that would have to translate to is larger firms potentially that have ac…”

“They can invest in smaller managers, emerging managers. That's harder to do with a giant consulting firm”

“Your managers get big, you develop multiple products, and over time, you might not fully terminate them, but you'll reduce their size in the portfolio, and then try to layer in more emerging managers, which has been a big theme of ours, is constantly looking f…”

“One of the counterintuitive things in private markets is I have invested a fair amount with emerging managers. Now, the irony is empirically, it says it makes sense. Like on average, even though they have a lot less in the way of assets, they outperform, but i…”

“The only disaster fund, really, truly disaster fund I ever invested in was not an emerging manager. It was a high Roman numeral fund that had a murderous row of great LPs invested in it.”

“About a third of our capital across different and different parts of the portfolio went to firms that would really reasonably be considered emerging.”

“Plan for zero plus five. Don't plan for today. Plan for five years ahead, because infrastructure needs are not going to decrease. They are going to increase.”

“And also, don't build in-house. I always say, buy the best of breed of something and work from that.”

“The truth is, this business is such a long sales cycle. You can come here and have 20 or 30 meetings. You may not get an allocation from any of those investors for years. If you're a really big, well-established manager, it's probably less than 12 months. If y…”

“Of those 180 managers that we funded, we've had 12 graduate to full-fledged allocations in the portfolio.”

“As a general rule, we'll do three funds with an emerging manager, and then we have to make a decision. Do they graduate, or are we done with this relationship? Because at that point, we no longer consider them to be emerging.”

“We would often do a deal alongside a manager before we'd invest in their fund, set up an economic structure, That allowed us the optionality to not go in the fund if we didn't like what we saw. So the economics would stand on their own and then they would fade…”

“We back a lot of these emerging managers. I can tell you they are inundated with offers from folks who are saying, I'll give you a hundred million for your fund one, and I want one to one co-invest. What those folks are really saying is I want half off the rac…”

“I was surprised as I looked at the industry data to see that in many cases, there was much wider dispersion at that earlier phase of a manager's life cycle, that fund one, fund two type era, but it was dispersion in both ways. The average was better than mid c…”

“We think that as a general rule, we need to have an opinion on the firm you came from to have an opinion on you, because almost all the folks that we evaluate on the emerging manager side are a product of wherever their apprenticeship occurred.”

“Some of the pods don't really lend themselves to emerging managers. They're really scale games where technology and systems and access are more important.”

“When we back any emerging manager, we don't put a bridge or a floor under them because we think that discourages risk-taking behavior. It sets the wrong mindset and doesn't educate them on how hard it's going to be in most cases.”

“20% of each of our platforms that we raise every two years are emerging managers.”

“Where those things align, you can de-risk it, and you can own a piece of the GP going forward. That is where you can find more structural alpha.”

“When I joined partners, we rarely underwrote emerging managers. The view was our job is to take investment risk. You're also taking on a business risk when you underwrite a new manager.”