LP Digest #74
Vertical integration, GP mistakes, emerging managers, and more
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I think this isn’t talked about enough - I was speaking with an allocator this week and he (verbatim) said “If a GP can’t give a real answer to the largest mistake they’ve had and it was a real mistake, I’m out”
Perhaps this deserves it’s own article, it’s understandably an intricate topic - but my point for now is twofold: (1) sophisticated LPs want to know how GPs react to challenges, and (2) giving a weak answer to this is not only similar to saying your weakness is working too hard in an interview but also makes you miss a huge opportunity to form a relationship and show the “human” part of investing.
I haven’t gotten a chance to write on this more deeply, but will likely do so soon. The short version is that while vertical integration makes a ton of sense for many firms, I think LPs (and GPs) over glorify the concept … many times at the expense of their own returns
This was sort of a joke, but the truth is that I speak to so many people on both sides who think the grass is greener on the other side. If you’re on the side of being an LP thinking about being a GP, I’d read can you teach me to be a GP
An interesting study, I also previously wrote on selecting emerging managers in the real estate space
We’ve been busy over at GP-LP Match, if you’re a GP who didn’t previously register (one common reason being not doing 506c deals) this would be the time - LPs will be able to search for very precise parameters in a few days and your firm will show up on this list. Register here in 2 minutes.
When you’re ready, I could help you in 2 ways - my email is aleksey@gplpmatch.com:
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General Partners:
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Deck review - I’ll look over your marketing materials from the perspective of an LP and provide slide by slide commentary to improve your pitch and how your terms compare to market