Hey all,
We're launching our next fund and presently standing up our data room. We're a boutique firm -- ~$300mn AUM/$100mm EUM, first fund $40mn, targeting $100mn for fund II. First fund was raised primarily from personal network, obviously need to expand beyond that for larger target size.
Regarding Data Room: Didn't even have one for first fund, targeting more family offices and RIAs for this fund and have determined having one is a critical component of raise. Seems like a countless number of items could be included in a data room -- obviously will have PPM, LPA, Sub Agreement, Marketing Materials, sample reporting, org chart, company bio etc. We know having a DDQ is a crucial component; have heard a few folks mention having a Fund Model also important. With that said:
- Any thoughts on developing/implementing a DDQ for a REPE fund? Reviewed the ILPA DDQ, seems way too overboard for what we are -- we're not raising billions nor really targeting institutions given fund size, most of the questions are non-RE related, and something like 70% of the answers we'd just mark 'N/A'. I've come across the INREV DDQ which is RE focused, and we're inclined to just delete out the irrelevant stuff and make our own DDQ from there. If anyone has advice on a different way to approach/different DDQ we could just drop in and implement, I'm all ears.
- Fund Model: 1) for anyone with experience fundraising -- how crucial really is this? Seems like a lot of busy work to build out that we're going to buy 6-10 deals over the next three years. 2) Re developing it: Would be great to not build from scratch. Found a 'buyable' model from REFM for a few hundred bucks, may go that route, but curious if anyone else has resources they could share on this along with understanding of how important or not important this ultimately is.
Fundraising Generally: As we all know, phenomenal time to be out in market fundraising as an emerging manager (sarcasm). Quickly determined our audience not institutions given fund size; we're targeting predominantly U/HWNI, Family Office, and RIAs. Any experience that can be shared re success penetrating these sources (primarily the latter two) appreciated as well. Also pretty blind on the Broker Dealer channel, if anyone has experience there or suggestions of other trees to bark up.
Thx!
Hi sjd9178, any of these topics helpful:
More suggestions...
You're welcome.
1) One good way to develop a DDQ is to aggregate the common questions you receive from your current and potential LPs. Some FOs/RIAs will send over their own DDQs/ODDQs, which should help you anticipate and refine your responses. Don't worry about answering too many "N/As" either because the LPs aren't tailoring these questions to specific sponsors. At the end of the day you'll have to answer investors' questions even if it's already answered. That's just part of raising capital.
2) I would caution against too much detail in models and projections. Regardless of CYA disclosures, investors will hold you to the projections you provide. That being said, you should be able to talk through all assumptions, so I don't recommend buying a third party model, or at least "make it your own".
I'm part of the fundraising process as well and it's definitely difficult to get those checks in. Larger FOs/RIAs are still in a "wait and see" approach. If you've exhausted your rolodex, you may have to engage a capital raising firm.
super useful—on both fronts—thank you.
re ‘buying a model’: would certainly be making it our own and be 100% comfortable walking thru the assumptions…just me being lazy/not wanting to build a new model out from scratch / have our associate do so if it’ll be far off from what’s expected/market. we don’t presently have a fund level pro forma model and will either build from scratch or source a template from somewhere. latter just saves a few hours. i hear you on not getting too specific…frankly, would prefer to not do at all, but am not sure if it’ll be required or expected.
and per your comment on engaging a placement agent — we’re more than open to doing so but have had difficulty finding the right fit. at $100mn our fund is a bit of a ‘tweener’ - too small for most institutions, larger than a friends and family raise. we’ve spoken with a few placement agents, have found most of their relationships are in the institutional space, and that their typical threshold for engagement are $200-250mn+ funds. if you have recommendations for a few firms on the capital raising side who you think would be a fit for our product, that too would be incredibly useful.
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