20VC: Why Now is the Best Time to Invest in Emerging Managers, Biggest Mistake Emerging Managers Make When Fundraising & Investing Lessons from Investing $1.5BN Per Year and Being Early Investors in Thrive, a16z and Founders Fund with Peter Lacaillade
This podcast episode covers a wide range of topics related to private equity investing, including manager assessment, co-investing strategies, venture capital considerations, liquidity management, and emerging fund manager fundraising. The experts discuss the key challenges, opportunities, and best practices in each area.
Takeaways
• Look beyond track record and focus on factors such as team quality, opportunity attractiveness, and interests alignment when assessing manager ability.
• Embrace a barbell approach in fund portfolio diversification, including both large groups and niche targeted focus funds.
• Patience is essential in venture capital, with four years required to gain clarity on underperformers and outperforms.
• Barbell approach is vital when investing in emerging venture capital managers, involving investments in established and upcoming managers.
• Co-investing offers investors access to better deals, stronger portfolio company connections, and a diverse portfolio.
• Invest in lower middle market companies as a possible strategy for steady returns.
• Emerging managers need to understand varying LP types, especially endowments, and aim for a stable, growing capital base aligned with their values.
• Focus on building relationships with LPs and sustainable returns over multiple funds.
