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Analyze Your Competition Before You Pitch an Endowment
Adapted for fund managers pitching endowments from Chapter 1 of Capital Raising by Richard C. Wilson.
When you pitch an endowment, the staff on the other side of the table has probably met a dozen managers who sound like you this year. You are not being judged alone. You are being compared.
The first step in my capital raising system is analysis. Of your competitors, your investors and yourself. Skip it and everything after works at a fraction of its power.
Questions to ask about competitors
From the book, adapted for an endowment raise:
- What are similar funds offering on strategy, terms and fees?
- How strong is their positioning? Can you say what they stand for in one line?
- How credible are they in reality, not just in their deck?
- How transparent are they on track record and risk?
- How professional is their brand and material?
- How do they build relationships with allocators? Conferences, consultants, research, referrals?
- Which investor type do they raise the most from?
Pick three to measure against
Choose the three competitors with the strongest materials, research and reputation with endowments. Study them. Hold yourself to their standard and then above it. Having someone to measure against raises the quality of everything you send.
Then analyze the endowment side
- Which endowments already invest in your asset class?
- What size do they tend to be? A $300 million college and a $20 billion university buy very differently.
- Do they use an outsourced CIO or a consultant who screens managers first?
- Which ones would realistically give you a meeting?
Public filings help here. Many endowments publish annual reports with their asset allocation. The directory on this site lists 100 large endowments with sizes and links to their reports.
Then analyze yourself
- What can you do that a much larger firm can't, because of its size or bureaucracy?
- Can you offer something specific, such as lower fees, capacity or co-investment?
- Which group of endowments could you win by focusing only on them?
Frequently asked questions
Where do I find what competitors charge?
Allocators, consultants and placement agents hear terms all the time. Ask them what is common in your strategy.
Should I name competitors in my pitch?
Usually no. Show your edge directly. Staff will make the comparison themselves.
How often should I redo this analysis?
At least yearly, and before any new fund launch.
Sources
- Capital Raising, Chapter 1, Richard C. Wilson .
