Limited Partner (LP) Investing Lessons

Limited Partner (LP) Investing Lessons

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Minimum Viable Capital Call
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Minimum Viable Capital Call

A checklist before investing (or asking for) more money

Aleksey Chernobelskiy's avatar
Aleksey Chernobelskiy
Aug 22, 2024
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Limited Partner (LP) Investing Lessons
Limited Partner (LP) Investing Lessons
Minimum Viable Capital Call
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  1. Last premium post: Will a rate cut(s) save distressed investments?

  2. Last free post: LP Investing Digest #43 & Full Article Index By Topic


Announcements:

  1. LP Cohort: I have space in the September cohort. Please reply to this email if it’s of interest. Review 4 deals with me (4 consecutive weeks) and other LPs to learn what to look out for in deals. I recommend doing this before the LP Topics Seminar.

  2. LP Topics Seminar: an ongoing biweekly 1 hour meeting with other LPs where we'll go over investment decks, capital call and distressed situations, and modeling. This is meant to provide a deeper look into existing LP investments. Please reply to this email if you’re interested.


Minimum Viable Capital Call

Happy Thursday! 👋

I received a call a few days ago from an LP who wanted to hire me to advise him on a capital call decision.

Shortly thereafter, he mentioned that the GP has not provided any financials to date and he only has occupancy numbers.

I proceeded to tell him that I don't think I can help and it doesn't make sense to hire me either - it's impossible to evaluate a capital call without a basic foundation, and the GP not willing to provide basic information is likely in and of itself a directional answer.

It's impossible to evaluate a capital call without a basic foundation

 

But what is that foundation?

What I set out to do today is explain what the minimum components should be of such a capital call communication, without which it is somewhere between difficult to impossible to make a logical investment decision. 

Reasons to read this:

  • GPs: to ensure that you're providing enough information to LPs to make a decision

  • LPs: this article will provide you with a checklist of necessary information in order to make a decision on a capital call

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