Last premium post: Spotting GP/LP misalignment - 7 examples of what happens when interests are misaligned. I don’t usually say this, but I highly recommend reading this if you suspect that your deal is underperforming.
Last free post: LP Investing Digest #27 & Full Article Digest
Announcements:
May LP Cohort - 1 spot left, but I need to know today since we’re about to launch. Review 4 separate memos together with me and other LPs to learn how to vet LP investments. If you’re interested, please reply to this email.
New Podcast Appearance - I touched on IRRs, vetting GPs, capital structure, and the importance of return of capital. You can listen on Apple or YouTube. As always, my appearances aren’t an endorsement of the host. I look forward to your feedback and hope you enjoy the conversation!
Happy Friday and welcome back 👋
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This has a lot of truth in it - psychological games tend to happen, so make sure you’re grounded and realistic in your expectations. This should help with strategy/communication.
Useful to understand the relationship between cap rates, LTV, and interest rates as it relates to DSCR (lender) requirements
I’ve written on this multiple times and I think this was well put - don’t be the LP who filters purely on one metric (IRR being one example), you’re doing yourself a disservice
Reminder who much macro expectations can change over a short period of time
Incentives are part of any sales process but always try to decipher between marketing and facts that objectively make your investment better. Sounds silly, but grammar probably matters too… and be careful with assumable loans that are OVERsold in a deck.
An interesting discussion that got a lot of engagement, and obviously not investment advice as always
Can’t agree more on this, more detail here on this topic
Have a wonderful weekend!
Thank you for reading! I genuinely hope you found this helpful - the best way to say thank you is to spread the word.
I advise LPs on existing and potential positions and write articles here weekly on what I see in the marketplace that could help you invest better. You can find me on LinkedIn or Twitter.
Whether you’re an LP, want to learn to become one, or affiliated with LPs (GPs, Attorneys, CPAs, Wealth Advisors) I hope you’ll consider subscribing and sharing this post to help others make more informed investment decisions.
When you’re ready, I could help you in 3 ways - simply reply to this email if one is of interest:
Limited Partners:
Potential positions - you’re considering investing and need an independent opinion
Existing positions - there’s a lack of communication, you’re concerned about fraud, or perhaps you got a capital call request and you’re not sure how to proceed. I have also helped LPs with a “post-mortem” analysis on deals that didn’t work out - it’s important to learn these lessons as opposed to just blaming the GP.
LP Cohort - review 4 separate memos together with me and other LPs to learn how to vet LP investments.
LP Investing Lessons Podcast - learn from others investing lessons here. if you're an LP with lessons learned from a successful or unsuccessful investment, consider replying to this email to share your knowledge with others. Both the LP and GP in the recording are kept anonymous.
LP Community - join my free 2,000+ member LP community on Twitter
Find GPs in unique asset classes/geographies on my monthly intro post (see LinkedIn’s post as well for more)
General Partners:
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
Investment review - I’ll provide independent feedback on an opportunity you’re pursuing
Capital call advisory - you suspect that you’ll need to make a capital call, but aren’t sure how to proceed or communicate the message.
Other - anything from waterfall/fee advisory to disagreements between co-GPs on the proper path given a set of circumstances
General Consulting: modeling, strategic advisory, underwriting training, etc.
If you’d like to speak on the phone, you can reach out to me any time at aleksey@hey.com