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Advice for fund managers –

If you’re going to try to raise money from Hamilton Lane, make sure you know who your competitors are. Hamilton Lane CIO Erik Hirsch says he and his peers are often amazed to hear managers say, “We don’t have any competition,” or “We don’t know any other firms that do what we do.” Even if you’re bluffing, the message you’re sending is that you’re unaware of your own industry.

And don’t bother trying to convince Hirsch that your deal flow is “proprietary.” He’s heard that one too many times.

We asked Hirsch to give us some examples of where fund managers typically make mistakes in their presentations. “Most people are generally well prepared for their meetings with us,” he says. “One of the times when things fall apart during presentations is when people insist on sticking to a fixed script for a presentation.” For example, a Hamilton Lane team member may want to drill down into a point made on the third page of a PowerPoint presentation, but the fund manager refuses to deviate from the PowerPoint. A related mistake is coming in and expecting to do all the talking. “We tell people that we want a dialogue when we meet with them-that we’ve read the PPM already,” Hirsch says.

Another area where Hirsch sees a breakdown is analytics. “Either they’re untruthful or they’re in a gray area where the presentation is being made in a disingenuous fashion,” he says. For example, a manager might say that the track record data being presented reflects all of his firm’s deals, but then “we look at all of a firm’s cash flows and we find 15 deals that were not in the track record,” Hirsch says. “When we ask why those deals weren’t in the pitch or PPM, we’re told it’s because those failed deals are not part of the direction of the firm in the future. It’s a classic mistake for a GP to think that the LP is not smart enough to ask for the details or to think that an LP won’t ask for all of a GPs numbers after a presentation.”

The key to a successful meeting at Hamilton Lane is not necessarily the pitch. “We don’t back the best pitch,” Hirsch notes. “[We back] people who make the best investments. It’s our job to look beyond the well-designed PPM and the gifted speakers.”