[Advice Needed] Sourcing Strategies as an Investment Professional (junior) at a Large Cap Fund

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Hello - 
 

I have done angel investing on the side and it is an easy way to piss away 10-15k checks here and there: founders that have yet to be recognized by any accelerator program to prepare them for their seed rounds are desperate for cash, and are generally pretty easy to find.
 

However, I am now in my investment professional program at a large cap fund, and I am realizing that I miss sourcing aspects of work that I once had. I feel the need to finish my current program to develop hard skills, but would like to source and get credit while I am here. I am looking for advice on how to source as an associate in a politically acceptable way(it is not usually the role for my level to source at my firm). 
 

I am aware of a few leads: (1) "banked deal"; (2) "competitor deal", and (3) " prospective deal". I am aware of these because I have a strong network in one industry in which they all play.
 

  1. Banked deal is a deal that my firm is unaware of. I know who the banker is but do not have a relationship with them. I know there is lots of competitive interest in the asset. I know the asset pretty well, and have talked briefly with management, but nothing substantive. Do I...
    1. Reach out to the bank, get the CIM once it becomes available, whip up a model, and present it to the relevant team?
    2. Reach out to management, remind them of our conversation, and ask them where they are in the process? (I have changed banners since I first spoke with them)
       
  2. Competitor deal is a non-banked process in which one of our competitor firms has been foaming at the mouth to get a deal done, but has not been successful.  I know the market like the back of my hand and want to try my hand at intercepting the deal because of the intel I have. Do I...
    1. Reach out to the asset's management team to try my hand at developing a relationship myself?
    2. Ask permission from the relevant team to reach out to management? My firm is hierarchical, to note
    3. Elevate the lead to my team without directly sourcing
      1. I worry I will not get to actually do the sourcing myself with options 2 and 3
         
  3. Prospective deal is a company that I am aware of is trying to break into my home country's market but has not had success. I have good knowledge about this market (7+ years) and have the same questions as competitor deal. Do I reach out myself, ask permission, or elevate?

 

Thank you for any advice. What makes this difficult is I have no experience sourcing large deals. I have had a lot of good advice from @compbanker and @APAE in the past and so will tag you here if you are willing and free to respond.

Comments (4)

 
Sep 16, 2020 - 2:08pm

You're killing me. I get a notification each time you edit your post if it contains an @mention ....
 

I am aware of a few leads: (1) "banked deal"; (2) "competitor deal", and (3) " prospective deal". I am aware of these because I have a strong network in one industry in which they all play.
 

  1. Banked deal is a deal that my firm is unaware of. I know who the banker is but do not have a relationship with them. I know there is lots of competitive interest in the asset. I know the asset pretty well, and have talked briefly with management, but nothing substantive. Do I...
    1. Reach out to the bank, get the CIM once it becomes available, whip up a model, and present it to the relevant team?
    2. Reach out to management, remind them of our conversation, and ask them where they are in the process? (I have changed banners since I first spoke with them)

Either strategy here will work. It really depends on your connection to management. If you feel comfortable reaching out to management directly, then I think option 2 is superior to option 1. Management will likely just refer you to the banker running the process, but the banker is far more likely to give you the CIM if given a referral from management.

  1. Competitor deal is a non-banked process in which one of our competitor firms has been foaming at the mouth to get a deal done, but has not been successful.  I know the market like the back of my hand and want to try my hand at intercepting the deal because of the intel I have. Do I...
    1. Reach out to the asset's management team to try my hand at developing a relationship myself?
    2. Ask permission from the relevant team to reach out to management? My firm is hierarchical, to note
    3. Elevate the lead to my team without directly sourcing
      1. I worry I will not get to actually do the sourcing myself with options 2 and 3
         

You should never really need to ask permission from your team to reach out to management UNLESS they are actively courting the management team already. Consider doing the following: reach out to the management team directly and setup a call. After the call is scheduled, invite your team to join if they are available. Tell them you know the space and the management team and will drive the conversation.  My guess is they won't want to participate but even if they do, you should be the one who gets the sourcing credit because you were the one who established the relationship and brought the team to the table.

  1. Prospective deal is a company that I am aware of is trying to break into my home country's market but has not had success. I have good knowledge about this market (7+ years) and have the same questions as competitor deal. Do I reach out myself, ask permission, or elevate?

If it is your home country, reach out yourself and try to build the relationship. Even more so if your home country is one where the management team will struggle to make inroads or find an alternative "connection." For example, if your home country is Norway, you will be more valuable than if your home country is India where there is no shortage of professionals in India working in the industry. Make sense? Either way,  I think reaching out directly is the way to go.

CompBanker

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