What do your IC Memos look like?

Seems like our IC memo's are so detailed and end up being 150+ pages for, at times, small check sizes. Serious overkill.

 

At times I can't see the practicality of such a long memo for the IC members - hard to believe that they read it all....

 

What do IC memo's look like at your firm?

 

Comments (28)

 
Feb 11, 2021 - 1:34pm

Jeez that does seem like overkill. Ours are 30-50 pages and even in the 50-page memos there seems to be a lot of repetitive information. I'm on the debt side though so I'd assume ours wouldn't be as extensive as equity ICMs.

 
Feb 11, 2021 - 4:39pm

When I used to work on the debt side, 15-25 pages max including appendices (financial statements, etc.). 

 

Now on the investment sales side, CIMs are about 25-50 pages max. Biggest one I've seen is 75 pages but that one had a full page picture every other page.

 
Feb 11, 2021 - 5:56pm

At my firm around 10-25 pages depending on the complexity of the deal. Anything more than 30 is overkill in my opinion unless you are hard equity and need a detailed breakout of everything. What do you even put in pages 50-150? 

I've had OM's sent that are less than 10 pages lol

 
Feb 12, 2021 - 11:09pm

30-50 is what I had most experience with, though my latest was 60 also.

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.

 
Feb 13, 2021 - 10:31am

Totally agree. Love that your firm does that. I think (in my humble opinion) the problem is three fold. 
1) Firms feel the longer the memo, the more flushed out the thesis is. 
2) Proving to LPs the firm is analyzing the investment properly. 
3) Bloated middle management trying to prove their worth by increasing the number of analyses and thought processes in a memo which creates longer memos.

 

At my previous firm, we were acutely aware people only read the first 2 pages of the memo, and so would spend the most time here. However, it was always interesting to see the politicking at play in writing and designing the memo. 

 
Feb 13, 2021 - 8:01pm

I'm a big proponent in spending your time on things that actually add value and as little time as possible on things that do not. It sounds simple, but you'd be amazed at how controversial that can be at some firms. 

 
Feb 13, 2021 - 8:03pm

40-80 pages depending on deal complexity. I've seen a few push close to 100. 

They are mostly a waste of time, but senior management takes the perspective that if you didn't put it in writing you must not have done the work. Always hilarious when those same people complain about the length of the writeups...

 
Feb 13, 2021 - 9:53pm

We just moved from a 15 page word doc (of pure text) to a 20 page powerpoint with one slide for summary info, one for thesis + key bets/opportunities. one for risks, and the rest is standard boiler plate stuff (aerials, financial projections, underwriting assumptions, capex budget, supply overview, rent comps, sales comps, and floorplans).  We're trying to get the meat if it onto 2-3 pages.  We've prescreened our markets and trust that our teams are capable of identifying good real estate (debatable since I work there...), and we've got a lot of money to put out.  That means we have to do volume and can't spend 2+ days cranking on a 20+ page memo when everyone knows half the shit in there already, focus is on digging deep on the business plan and being transparent about risks, most everything else is just noise.

 
Feb 14, 2021 - 4:38am

Ours are pretty short PowerPoints. Most of our developments are city centre office/hotel/residential/build to rent/serviced apartments.
Structure tends to be:

Page 1 - image, address, opportunity summary including all key financials I.e purchase price, development costs, end values

Page 2 - information about existing building, size sqft/number of rooms if hotel etc, current use class, another image of key building elevations.

Page 3 - location map marked up with all relevant surrounding uses I.e. major office occupiers, leisure/tourist attractions etc.

Page 4 - connectivity - busses, trams, airports, train stations.

Page 5 - existing and proposed floor plans if re-use or new build plans and massing if new build.

Page 6 - any info on end values research i.e. comparable rental or sales evidence or covenant information of potential pre-let tenants, term sheet with hotel brands etc

Page 7 - screenshot of development appraisal including sensitivity analysis

Page 8 - (if sending to funders) would be funding terms sought and exit strategy.

 
  • VP in RE - Comm
Feb 14, 2021 - 2:03pm

80% is copy and paste from broker OM, so basically all the info on the local economy data, nice little paragraphs about the market. The remaining 20% is our DD for analyzing comps, underwriting, etc. So basically imagine that we gut the broker OM and delete anything related to financials/proforma and then put our own underwriting in.

 
Feb 14, 2021 - 10:59pm

From the LP side, and from two competing firms...

First firm I worked for was about 100 pages single spaced in Word.  The seniors at this firm were some of the best I've known, and a decade later I still use the memos as reference for what professional institutional IC memos should aspire to be.  Second firm I worked for was about 100 PowerPoint slides.  The memos were like a junior high science fair project, and there is no reason to ever refer back to them.

I don't think it matters whether it is done in Word vs PowerPoint. The structure and basic content can still be the same.  But if I had never worked for the first firm, I wouldn't know what I would be missing.

I think the difference is what firms leave out of the memos hoping people will miss (or expect to ask during the meetings), versus making the memos something you can use years later (either to refer back to the deal or for future ones).

 

 
  • Associate 1 in PE - Other
Feb 16, 2021 - 10:55pm

Sorry - re: comment about not knowing what you were missing if you didn't work at first firm - just curious - what type of critical information made it into the 100 page single spaced doc that didn't otherwise get into the 100 page ppt decks? Feel like a 100 page deck is a lot of space to work

 
Feb 17, 2021 - 3:14am

That'd take at least 5 thumbs of whiskey to get thru. Fucking obscene. Whoever circulated that should be taken out back like old yeller and promptly shot in the back of the head.

"In order to be a really good investor, you need to be a little bit of a philosopher as well." -Dan Loeb

 

 
Feb 17, 2021 - 3:22am

Anywhere from 10 to 20, maybe 25 pages if it's a real fucked up deal. Appendix with additional exhibits/figures on top of those included inline throughout the body of the text. No slide deck. Model can be anything from pretty basic cash flow models to absolute clusterfucks with thousands of revenue driver inputs (only seen one like that and it was a catastrophe to work on, it was a niche manufacturer with tons of SKUs and very specific applications for each in overlapping industry end markets, company was near insolvent and we want to sensitize for specific revenue cases, painful process, but very satisfying when the model finally worked perfectly) but usually somewhere in between and with plenty of opportunity to repurpose parts of somebody else's model (sell side or sponsor if there is a sponsor involved).

"In order to be a really good investor, you need to be a little bit of a philosopher as well." -Dan Loeb

 

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