E201: Top 10 Things LPs Look for in a General Partner w/Matt Curtolo

What does it take to be a truly great limited partner? In this episode, I spoke with Matt Curtolo, a veteran LP who’s worked with some of the most sophisticated institutional investors in the world—Hamilton Lane, MetLife, and Hirtle Callaghan. Today, Matt advises both LPs and emerging GPs, offering a rare perspective from both sides of the table. We dug deep into what separates elite LPs from the pack, how institutional incentives shape decision-making, the paradox of humility and self-promotion among GPs, and why the best partnerships are built on trust, EQ, and long-term thinking. If you're raising a fund—or allocating to them—this episode is a masterclass.

Episode Transcript

(00:00):
You've worked at some of the top limitedpartners in the country, MetLife, Hertel

(00:05):
Callahan, Hamilton Lane.
So welcome to the How Invest podcast.
Thanks, David.
Super excited to be here.
So you spent seven years at Hamilton Lane.
We previously had the CEO of Hamilton Lane onthe podcast.
Tell me about your experience.
I was the first seven years of my career, andI'm happy to date myself was 2004 when I joined
there.

(00:25):
A really different company than it is today.
It was about 50 people.
In 02/2004, it was really a great opportunityin the market, right?
Private markets were really starting to boom.
There was this industry consolidation.
There were some of the players, particularly onthe consulting side that, went away for one
reason or the other.
And Hamilton Lane had emerged as the leader.

(00:45):
So in within nine months of me sitting in thatseat, I was afforded a ton of latitude and
opportunity to try new things as the companygrew.
So I started and I can say this looking back, Iwas in roles and in rooms that I had no
business being in at that point in my career.
And of course, as a young professional, Istubbed my toe a ton, but it was an incredible

(01:10):
learning environment.
And I think those those challenges inretrospect, they built me into the investor
that I am today and and probably even more sothe person.
We oftentimes on the podcast talk about theskills that make a great general partner.
What are the skills that makes a great limitedpartner?
First, it's defining your purpose.
Right?
It's it's what what is my role as an LP?

(01:32):
Who are the constituents that I serve?
And really starting at the very top of justoutlining the goals and what I'm trying to
achieve because a lot of people start bottomsup and I think people want to be stock pickers,
people want to be know find the next hidden gemall very important but I feel like the best LPs
are the ones who understand their position inthe market, understand the mission that they're

(01:56):
trying to achieve on behalf of the the capitalsource that they have and being able to execute
that in a pretty clean way.
So let's say you have a specific mission.
Let's say you're running a Yale type endowmentstrategy.
Double click on the exact skill sets, both EQ,IQ, and other that makes up a truly elite LP?

(02:20):
It's it's a good question because I think in inthat capacity, let's use keep pulling on Yale,
but as as one of the most revered institutionsin the country, one of the most prolific
investors.
Right?
The the skill sets that you need at a placelike that you obviously maybe you have to do
less of the outbound marketing, have to tellyour story a little bit less but what you

(02:41):
really do need is the ability, and I think thisgoes with every institution is that partnership
mentality is the ability to work with folks.
I would lean more heavily to the EQ of beingable to map out the goals, understand what
you're trying to do but really figure outwhat's the best way to navigate this, how do I
work within the communities that I serve boththe constituents as well as the investor base?

(03:05):
And then thinking about all of the things thatI need to do to manifest.
I'm not going to downplay IQ because you ofcourse need to understand the markets, be on
top of trends, be in the right circles, a lotof reps making sure that you're seeing enough
in the market particularly as you're usingexternal managers.

(03:25):
But the EQPs is I think what's going todifferentiate the very smart LPs to the elite
LPs to use your term because I think that's abig part of when you break up what being an LP
means, right?
The representation, the fiduciary nature of theLP role and then the investment process, all of

(03:50):
the structure, all the governance, all thethings to make sure you're doing everything
right, and then all of the other things to makesure your position in the market is viewed
positively favorably?
Previously interviewed John Merrill, who was atGrove Street at the time, and we talked a
little bit about this unique blend of skillsthat David Swenson had.

(04:10):
So he had David Swenson as a professor at Yale.
One of the paradoxical skill sets that DavidSwenson had is he knew how to partner with the
way with the GP to provide a lot of value tothe GP, he knew how to get a lot of value for
Yale, and also he knew how to create anecosystem where other co investors with Yale

(04:32):
also got the benefit of the deal and the fund,so it seems like a paradox, it seems zero sum,
but he somehow structured deals in a way thatall three parties would get value.
What are the best practices when it comes tobeing a great LP in the ecosystem?
You you can absolutely run it one way.

(04:53):
Right?
And with with that mentality of I'm here tomaximize the goal the outcomes for what who my
constituents are and what my portfolio needs todo.
I I don't think anybody looks at that and says,you're not doing a good job.
You're not doing the right thing.
But I think of the folks now having been inthese seats for over twenty years, it it

(05:14):
becomes a really interesting playbook of, okay,who when I find a manager, and I'd spend a lot
of time in the emerging space, so I'll use thatas an example.
My goal is to be able to introduce those folks,manager if I find them really interesting to my
peers who may think similarly or may thinkdifferently but I know them well enough that

(05:38):
this is gonna peak their interest as well.
So this constant flow of idea sharing back andforth with LPs, we use ecosystem, but I think
it's even more so it's this network of folkswho know and trust each other where the idea of
warm intros, the idea of a peer who youunderstand how they think, maybe you've

(05:58):
invested together in the past, how can you makethat in how can you give that investor some
value?
The way I always find to do that is thisnetwork of idea sharing.
The number of WhatsApp groups, Slack channels,all those sorts of things where we're
constantly trading ideas.
You also get leverage on diligence.
Right?
If you're if you're looking at something, I mayhave a a very formal process, a lot of things

(06:22):
that I'm looking for that are relevant toeither my institution or the way I think and my
framework, but other folks are gonna look at itdifferently.
And I always use the phrase, nobody is smarterthan everybody.
So that's one of the places where you canreally get the value of the community.
And and that's just talking about bringingvalue to the LP.
Nobody's smarter than everybody, meaning crowdwisdom on average is a top quartile or top

(06:47):
decile investor.
Let's put it this way.
I'd say if if you're just sitting by yourselfgoing through ideas, digging through a lot of
this stuff without any external feedback, Ithink you're you're gonna be prone to miss some
things.
Right?
Whether the the crowdsourcing or the groupthink or or those sorts of approaches, having

(07:08):
good inputs, but having making sure they'revetted.
I think that's the risk of how many people doyou want?
When is enough enough.
We always have this debate of when you're doingdiligence on a manager, what's the right number
of reference calls?
And to say you know when enough is enough isjust is a little bit too loose, but also
putting a fine number on it saying it's it'sfive or seven or 20.

(07:33):
It's not gonna be the same, but making sure youhave enough inputs that you've hopefully seen
around all corners.
And we can never get to a 100% a 100%conviction on things, but getting to the level
that you feel comfortable enough to pull thattrigger.
The power of AI let me look up on who wants tobe a millionaire, how often the crowd answer
was right.

(07:54):
I have to I have to admit I was surprised.
UK is 91 to 95%, and US was 95%.
I thought it would be closer to, like, 75, 80.
We systematically underappreciate how smart thecrowd could actually be.
Is referencing one of the last things that yougive to somebody junior, in other words, is it
one of those critical success factors that'svery difficult to train and teach somebody to

(08:17):
do?
It it is.
Well, I I think a lot of things in thisindustry come from reps.
Right?
Just used to joke the junior folks that I wouldhire and work on our teams, they should wanna
give money to the first 10 managers they see.
Right?
Because it they don't have necessarily a bodyof work to compare them to.
Right?
The first versus the second, the second versusthe tenth.

(08:40):
You then start to get a critical eye on that.
And at the same thing with references, I thinkone is understanding what you're listening for,
crafting the right questions, and listening tosay, okay.
Were they did they hesitate?
Did they use certain words?
So I I would always follow the shadow process.
Right?
Sit in, listen to how a reference call goesnowadays.

(09:03):
You know, in the virtual world, right, it's alot easier to have multiple people on calls and
things like that.
So I think that's something from a we alwaysused to try to get those junior folks to see as
much as they could review as many decks as theycould and then sit in on reference calls before
you let them go and really do that because youare relying a ton on EQ and investment

(09:24):
judgment.
Right?
It's true that most references end up beingpositive.
The on sheet references, we all know this,they've been they've gotten the the call
beforehand.
Hey.
I'm putting you on the list.
Make sure you say nice things.
Now is is that the only reason they're sayingnice things?
Probably not.
I I don't wanna assume that the world is isrunning this shell game where people are just

(09:48):
saying things for the sake of raising capital.
But I do think when you dig a little deeper andare talking to folks in a pointed way looking
for specific answers as well as talking offsheet, right, you have to make people
comfortable with what they're hearing, whatthey're talking about, who you are, and how
you're gonna use that.
There's a little bit of that.

(10:10):
I'd say there's a little bit of trust building.
There's a little bit of the digging deeper andunderstanding the nuance conversation.
Let's say you're hiring somebody and you createthis criteria and you're talking to people.
Once in a while, you get somebody, you're like,this is awesome.
Everybody in your team is like, this guy'sawesome.
This girl's awesome.
We should hire him.
And once in a while, you're like, well, there'snothing technically wrong with them.

(10:32):
They check all the boxes, but there's not thiskind of drive to hire him or her.
There's not this excitement.
Mhmm.
Does that is that where LPs make mistakes wherethey can't necessarily verbalize what's wrong,
but it's not a hell yes?
Think that is that is true.
Right?
It depends on the program.
Right?
If I have I'm making one investment a yearversus a 100 investments a year, the bar is a

(10:56):
little bit different so every incremental GPI'm looking at is maybe looked at it in a
different way.
I was a tennis player growing up so we alwaysused to say if 99% out it's a 100% Right?
So you just need it to be it's the flip side ofwhat we're talking about.
You really do need to be 100% of the way thereto say that this is the thing that's gonna I

(11:20):
have that gut feeling.
There's some of this where it goes back toreps.
It goes back to kind of knowing what the rightfit is and what the right model is.
We talk a lot about when we look at managers,is it a conviction based or a consensus based
decision making process?
So do we have to get everybody around the tableto say yes?
That may be a little too obvious, little bittoo that's going to weed out some of the things

(11:44):
that look that are more difficult to quantifyand more difficult to articulate.
But that conviction base is more about I havethat drive, can feel that connection and that
energy from the person or the manager or thefirm that makes you wanna drive forward.
There's almost like these two different typesof pits in your stomach.
One is the consensus base where, yeah, theythey went to Harvard Business School.

(12:07):
They were at this firm.
Something's off, but I can't I can't highlightit.
I can't figure out what it is, and they checkall the boxes, and but I still have a pit in my
stomach.
And then there's the exact opposite, which isthis person was a top engineer at SpaceX, has
never made an investment, but he's gonna investin all his SpaceX peers, but he may not even be
able to file a quarterly update or do theserudimentary.

(12:30):
I have a pin in the stomach to the upside.
So there's this kind of asymmetric downside andupside bets.
You you're spot on.
Right?
And it's it's back to the point of you cannever know a 100% of everything you need to,
especially in blind pool investing.
So all of this is a leap of faith, and it's acalculated leap of faith.
And whether that's the that's I feel like thisshould be great, but I don't feel it or there's

(12:54):
really no reason on paper where this is goingto be a driver.
You get a lot of this non consensus orcontrarian.
A lot of these terms come out when people talkabout investing.
I think you have to look a little bit deeper ofjust what that feeling is as an allocator.
I don't think that happens in year one or two.
It happens down the line because you're lookingfor certain qualities.

(13:15):
There's interesting discrepancy between how GPspick top startups and how VCs pick GPs or or
underlying startups.
And that is that the most experienced GPs andand really LPs will jump on my podcast and will
say the biggest mistake I made over the lasttwenty years was I underestimated the upside.

(13:37):
I underwrote a co invest to a $500,000,000valuation.
It was $10,000,000,000.
A a from Vintage previously said that.
If you look at first principles from the LPside, they should be much more gung ho.
So if they have 10 portfolios of 25 companies,any one position is 250, and they should be
really pressuring almost the GPs to take thesekind of crazy asymmetric upside power law bets.

(14:02):
But it seems like, ironically, the LPs are moreconservative in their approach than the GPs.
Is that kind of a feature or a bug in thesystem?
And and shouldn't LPs be more risk tolerantgiven that they're more diversified?
100%.
Definitely bug in my mind.
Right?
And I'm gonna go on a soapbox for a little bitnow because I think there's this concept of

(14:28):
misaligned incentives with a lot ofinstitutional LPs, a lot of groups where there
really isn't a benefit to taking a lot of risk,perceived or otherwise in manager selection
because I always say look compensationstructures and I can tell you how people are
going to manage their portfolio.

(14:49):
So if there's not a benefit to putting yourneck out and investing in something that may be
perceived as more risky or may inherently bemore risky by the metrics, there's not really
that motivation, right?
Other than finding something new andinteresting, you have to have that inner
intellectual curiosity to want to dig forthose.
But there's organizational structures thatwould much more drive the LP to make a decision

(15:14):
that is more about preservation thanmaximization of returns.
Preservation, I say job preservation, becausemaking a smart investment that outperforms in
three, five or seven years, that's great.
I don't necessarily know if you're going to geta lot of credit for that both on the bottom

(15:34):
line or the top line in portfolio.
I think the flip side is I hate using itbecause I feel like everybody's talking about
it, but you don't get fired for buying IBM.
So there is this there's more of a pull forfolks to be investing in things that feel
safer.
I say the perceived safety of larger brands,bigger firms, things that may be more

(15:57):
diversified because you're right, David, theembedded diversification within institutional
portfolios, any single position, we run thenumbers, it's going be quite small.
So LPs maybe need to think a little bit moreabout the flow through of a single investment
and how you want managers to operate.

(16:18):
Because when managers operate on thatconviction basis and they're not spreading a
bunch of chips across the board because they'renot a 100% sure or they don't they haven't
built the conviction in the areas they'reinvesting, That shows me a little bit of
weakness in their strategy.
It's not to say diversified strategies can'twork, but I think that in a portfolio context,
if I'm an LP and I'm underwriting to maximizemy return, I want more of those concentrated

(16:43):
portfolios.
Almost think of the hedge fund pod model whereI want the smartest people to operate with an
exclusive focus on the one thing that we knowreally well.
And if you're successful, you're gonna continueto get capital.
If you're not, it goes away.
Now you can't do that in an institutional multiasset portfolio necessarily.

(17:03):
But that's the way I think about it because ofthe compensation structures and the alignments
alignment aren't necessarily putting pokes infolks in the position to be able to make those
hard decisions.
And yet we've seen some LPs almost supersedetheir incentives in their search for excellence

(17:24):
and alpha.
What are the characteristics of those LPs thatsee the incentives?
Yes.
I I don't get fired for being IBM, but I'mgonna supersede them.
What are some car common characteristics ordrives behind these LPs?
I think that there's there's something aboutabout the point in your career that you're at
as well.
The the comfort the the cruise control versusthe revving the engine.

(17:47):
How much do I have to build in terms of my owntrack record, things that I believe versus is
most of my track record built as an investor,as an LP.
Some of those LPs are a little bit furtheralong in their journey, whether that be the
institution itself has the bandwidth to take alittle bit more risk, and they have the support

(18:10):
of the governance body.
Right?
So that might be a, an endowment or afoundation where the board is willing to take
some of that goes back to setting it at thetop, setting out what you're able to do, and
what the tolerance is of that organization.
And I should couch it by saying most of thesefunds are not going to lose money, right?

(18:32):
When you look at the numbers and the averages,they underperform what other assets are going
to be.
The opportunity cost and the Sharpe ratio isprobably low on some of these, but you're not
talking about full impairment of capital wherewithin the private markets in particular.
So I think some LPs need to frame it in the wayof where where are we in our journey as an

(18:54):
institution and an independent investor?
Do we have the governance structure that allowsus to take some of those risks and afford that
wide band of potential outcomes.
And I think, you know, I'm I'm a big peopleperson.
Feel like are the people aligned personallywith trying to push that envelope in terms of

(19:14):
supporting the next generation of managers,thinking about the overall ecosystem and
environment.
I think a lot of folks now in the space that Ispend a lot of time in with emerging managers
are thinking about how do we fund that nextgeneration?
How do we bring that next generation into, intolight?
So I think there's it's a confluence of a lotof those factors.

(19:35):
I obsess over these long term games thatorganizations or people play, and there there's
also a long term game on the LP side, on theboard side.
Whereas if you fire a CIO for taking the rightbet at the wrong time, other top CIOs, you're
gonna have a trouble recruiting.
There there's a sports analogy.

(19:55):
One of my, close friends, Mike Brown, justbecame the Knicks head coach, and he got fired
from the Kings a year after being unanimous NBAcoach of the year because of a player dispute,
and it was done in a poor way.
Now the Kings are gonna have significant issueshiring the next top top tier coach.
So oftentimes, if you don't think many yearsout, you're gonna come across these kind of

(20:18):
repetitive games where you start to lose, andthe opposite is true too, which is the
institutions that could see past the headlinethat actually do the diligence, that do the
references on the top LPs are able to becomethese cultures that attract the top tier
talent, not just at the CIO level, but at everylevel of the organization.
100%, David.
The average tenure, I did a little research onit, of US public pension CIOs is about six

(20:42):
years.
So that is, I mean, obviously that's anaverage.
So there are some with much longer tenure,others with less.
So I think it goes back to you need the rightgovernance structure in place where yes there
are things that are inevitably not going towork throughout that cycle.
It's the carrot and stick analogy, right?

(21:05):
Is there a reward in place or are we avoidingpunishment?
And you could argue that those two things arerarely aligned in our market.
It's often a lot more avoiding the stick thanit is the carrot but you have organizations
that can maybe not have that be thecompensation structure but the leash or the

(21:25):
latitude to be able to go out and experimentand find new opportunities and take on more of
that perceived risk whether that be throughmanagers or strategies or whatever it be
underlying.
But yeah I think that's exactly the case iswhen you start seeing a lot of churn and you
see this with some of the biggest publicpensions where there's a ton of external

(21:47):
pressures or politics that play into it, thoseare ones where yes they're very high profile
jobs, they represent a ton of capital, It givesyou the potential springboard to do some of
this creative stuff, but the governancestructure tends to turn a lot of the top talent
away.
What are some advantages that largeinstitutional investors have over their small

(22:09):
institutional peers?
What the large institutions lack in, let me saynimbleness, I think they make up with the
benefits of scale.
So they can be a little bit more creative inthe way they structure.
Think of it as like access to best ideas.
So you can go to a large manager, a large multistrategy manager, if you have a 9 or 10 figure

(22:33):
check that you can deploy within them andcreate a a fee optimized.
So a lower overall fee, potentially crosscollateralized collateralized incentive access
to all the top talent within that organizationto create a best ideas portfolio.
So that's something that as a smaller investorcan't do, because the scale buys you into those

(22:57):
rooms and allows you to to build that structurewith the groups that have the capabilities
resident within their firms.
Can you give me an example of that?
I wanna say it was the state of New Jersey,really pioneered this with some of the larger
GPs I'm gonna blank on it was one of the largemulti strategy GPs maybe it was Apollo or TPG

(23:18):
or one of those at
the
time But when you can deploy the size ofcapital, I want to say it was in the hundreds
of millions of dollars to create a separateaccount to be able to then build a portfolio
that maps directly to your investment needs andyour goals at a lower cost that's something

(23:38):
that really gives you that leverage point.
Obviously you have to be with the rightmanager, you're getting the right support, but
that is just something that's not available toan institution that can only write you know 7
or eight figure checks.
I had professor Steve Kaplan from University ofChicago arguably the the top researcher on
private equity and venture capital.

(24:00):
One of the things that he said that althoughlarge organizations oftentimes are limited kind
of to these second, maybe third tier funds,where they do benefit is from the co invest.
And just to give you an example, if a fund is25% gross, that's roughly 19% net.
So that's roughly 6% in in fees that you'repaying to, the two and twenty essentially

(24:24):
equates to about a 6%.
Said another way, if you could have half ofyour portfolio being co invest, half of it at
19, so half at 26, half at 19, you'reoutperforming the median fund by 3%.
So what you lose and maybe your ability to getinto the emerging managers or earlier stage
funds, sometimes you get back and co invest andthat could be pretty meaningful as well.

(24:46):
The ability to do some of those things, right,it just opens doors with that size.
Some of those things, it doesn't have to be atthe the co investment doesn't have to be at the
largest, the very largest.
I think a lot of the mid market managers arelooking for investors who have that appetite
and can deliver on that.

(25:08):
You'll start entering into what does a coinvestment program look like, how do you make
the decisions, are the deals where co invest isavailable the best deals alpha drivers within
the portfolio?
So it's beyond just the fee arbitrage.
I think you have to then think about theselection criteria that flows through there.
But it absolutely can be the case, right?

(25:29):
If you can dollar cost average into a fund andget the same exposures, you absolutely will
have a benefit at size.
So you spent twenty two years across some ofthe top LPs in the world, Hamilton Lane,
MetLife, Hurdle Callahan.
What is the best in class co investor programlike?
LPs need two things.
One, a clear point of view of what they want todo with co investing and a process that is

(25:54):
streamlined and efficient so they don't, sothey can provide clarity to the GP.
So one is what are we looking to capture here?
There are things about a co investment programit could be I want that dollar cost average,
want every deal that I'm offered because Ibelieve this manager is a quality manager and
the deals that I'm going to to access at alower rate are ultimately going to drive

(26:20):
returns higher.
That's one method.
It could be I want particular exposure tocertain sectors or partners or whatever it
might be.
So I can take a little bit more of a pick andchoose approach, a bottoms up diligence
perspective to co investments.
And I'm going to overweight some of those.
So I'm going to introduce some idiosyncraticrisk into my program.

(26:40):
Both of those are reasons why you can run aprogram.
They have to be staffed differently.
You have to think about the underwriting, thedollars, just the overall fit in the portfolio.
And then on the other side, I think the processis even more important because the number of
GPs that I talk to that say every LP raisestheir hand and says they want co investment.

(27:01):
Being able to have a process where yourunderwriting is not going to slow down that
manager, you also want to be able to give theGP clear guidance around, I need to, you know,
we need a week to review the data room, a weekto do legals.
Want to have a call with management, we want totalk to your deal team, then we can give you an
answer and we'll be done.
So you think you just need to streamline thatin a way that works for the GP and for you.

(27:27):
I want you to brutally critique my back ofenvelope analysis.
So mine is how much of the fund is investing inthe co invest, how much of the partner the GP
commit in the opportunity.
Third one is which partner?
So I think there's huge variation in qualitywithin a fund in terms of the partner.

(27:49):
And then who are the co investors on theopportunity?
What are the things that I miss, and what wouldyou remove from that criteria list?
I don't know if you gave them in rank order butI think the number one that I would look at it
is alignment with the strategy.
Am I investing behind the partner who has theright healthcare experience to do this with a

(28:10):
track record doing this?
Half or 65% of my analysis is the sponsorreview.
Is it aligned with their strategy?
Is it looking at is it the right partnerinvolved in it?
Yeah, I think those are the ones that you cankind of start with.
I also like the the first one you mentioned interms of how much of the fund is going into

(28:31):
this.
And a second step of that is at what point inthe fund is this co investment being made?
Right?
If it's the last deal out the door before theycan start the fundraising clock on the next
fund, not that that's a guarantee, but that'ssomething to think about the first deal versus
the last deal in a fund.
I'm sure there's some analyses that could bedone, whether that is there's better or worse

(28:52):
performance.
But if it's that first deal, if it's a deal midfund, if it's a deal later in the fund, what
are the incentives behind that deal?
And what are the reasons why I'm seeing that?
That's something that I I love as a coinvestor.
You know, what how did this get to my desk?
What are the reasons why the GP isn't takingall of this or they aren't bringing in other co

(29:12):
investors?
So those are the types of things.
I do like to see who else is in the deal.
It gives you a point of reference, and it alsotells you, okay.
The other groups who may have been thinkingabout this same space, that point of nobody
being smarter than everyone get the benefit ofhow other people are thinking about it.
So I worry less about in a particularinvestment context, I worry less about the GP

(29:38):
putting incremental capital into the deal.
But I do think about just how it fits from anoverall portfolio perspective.
If we're talking about a continuation vehicleor a co investment in that context, I
absolutely wanna see alignment with the GP'sdollars going into that, rolling their carry,
whatever it might look like.
But in a regular way, co investment, I'm a I'ma little less focused on that, more the

(30:00):
alignment within the firm with the people andstrategy and then where it happens in the fund
life.
How else do you suss out the GP's conviction ininvestment?
What are some nontraditional ways to understandhow much conviction the the entire team or a
specific partner has on the deal?

(30:21):
You can use the the traditional metrics wouldbe like, how much is this a max position in
your fund?
But I I think too, that's gonna come from oneto one conversations.
I don't know if you can references, of course,but I don't know if you can end around that
really in any way.
You really have to talk to the GP about whatthey've seen in this.

(30:41):
And maybe you can intuit some of that from theway they write about it in their memos and what
you're gonna see in a data room for that deal.
But I think most of it is gonna be asking themrelative.
Every GP will tell you, you know, they don'tpick their favorite children.
Every deal they love, every deal theyunderwrite to great outcomes.
But really, I I think having that conversationand knowing enough about the rest of that

(31:05):
portfolio that you can juxtapose the deal theydid, you know, prior year versus this one.
Why is this better?
Why is this different?
And then back to that point of why am I seeingit?
That's the thing you want to suss out too is ifthere is co investment available, what is the
reason why?
Is it a conviction based?
Is it a portfolio construction based?

(31:26):
Is it a time?
Is it a deal size?
So all those sorts of things not that that'sgoing to give you the flashing light the why,
on the level of conviction, but they're allpieces that could go into that puzzle.
The way that I look at it is I do look at it asbasically like intelligence gathering, not to

(31:48):
be skeptical, and to your point, everybody,every GP is gonna say this is their their
favorite kid, so I think if you're doing thediligence just in time, I think you've already
lost.
Have to be building a mosaic of information onthat GP, on that fund, and that's why I think
when LPs look at co invest, it's smarter topick a couple managers that you could go deep

(32:11):
on understand their how they think aboutthings, understand the cadence, build the
relationship with them, relationship is notbuilt just in time either.
And then you'll have a better sense for there'stwo ways to find out if this is a max deal or
if this is the right size.
You could ask them for that deal, which theymay give some reason, oh, yes, but there's less
reserves, etcetera.

(32:32):
Or you could look know their last 10 dealsizes, be up to date on it, and then just ask
them for the check size.
So kind of do your own homework versus askingthe GP to kind of narc on themselves.
You really do have to pick your GP partners andyou have to pick your horses, and this is where
having those relationships come to fruition.
This David is how we started our program atMetLife is we identified who the partners were

(32:57):
that we had the most faith in and I'll take astep back, not who we had the most faith in,
where we were seeing co investment flow, wherewe like the nature of it, where we had
partners, where we could shortcut some of that,that whole prepared mind idea of we know what
we like, we know what we believe this manageris really good at and the deals that we would

(33:17):
wanna co invest with them, on.
So that was a way to, one, help us build ourown process on the ground versus just opening
up the top of the funnel and saying, everybodysend everything, and then we're left scrambling
and trying to meet deadlines and do a lot ofthose things.
So I think that is that is a critical point.
It's like knowing what you're looking for andbeing as prepared as you can.

(33:39):
Wait.
Are you saying that at MetLife, you had morefavored managers versus less favored managers?
Just like GPs have GPs have more favorites?
That can't possibly be true, You're
never picking your favorite children, ofcourse.
You almost knocked on yourself as well.
Oh, no.
So before you went to MetLife, you went tohurdle Callahan.

(34:02):
We had the CIO, Brad Conger.
What was the main difference between hurdleCallahan and Hamilton Lane?
What was the stark differences between thosetwo organizations?
Yeah.
Obviously, type.
Right?
One being an asset manager consultant dealingwith large institutions and the other being an
OCIO where the core market is high net worthindividuals, family offices, and small

(34:25):
institutions.
All the things I got to do at Hamilton Lanefrom back office, front office, research,
product, investor relations, legal, all thethings that I touched, I actually was
responsible for when I ultimately took over therole leading that team.
I felt closer to the money, which, you know,you're talking to the individuals, you're

(34:46):
really seeing the impact that you're having onthose what we called good works organizations.
So a lot of the institutions were foundations,charitable organizations, hospitals,
orphanages, things like that.
And those were, you know, there's just a deeperconnection when you can see that and talk to
the folks there.
And you mentioned you had more interaction withLPs in the seat and hurdle.

(35:10):
How did having daily or weekly conversationswith LPs affect the way that you went about
investing the portfolio?
Did that make a change?
It did.
It's like this lens of stewardship of justlike, okay.
I can see I can talk to the principals at thefamily offices.
I can talk to some of these charitableorganizations and and see the great things that

(35:31):
they're doing.
That rightly or wrongly gave me the the greatersense of connection to the dollars.
But I also got to hear the challenges of whatthey were going through.
So we had taxable and non taxable clients.
For the first time in my career, was learningabout after how to think about after tax
returns, K-1s reporting.
It helped bring a lens into the ODD, into theoperational due diligence of how my

(35:56):
conversations with managers went.
And also thinking about like efficiency ofcash, right?
How do we use the credit facility?
How do we think about capital call timing whenyou are trying to not just maximize return, but
be more efficient for these clients?
And David, I'd say the other thing too, workingdirectly with these folks, each of these
annual, semi annual or biannual vintages, wehad about 200 discrete clients in each of those

(36:22):
pools.
And the level of understanding of the marketwas kind of up and down the spectrum.
So it kept me on my toes, but it also forced meto distill what RIC said.
So when we did our underwriting, how can webring that then?
This is a fantastic investment opportunity, buthow can I put that across in clear, concise way

(36:43):
to the clients so they can see the value inwhat we're
Hamilton Lane is approaching a trillion dollarsin assets?
I think hurdle Callahan is over 20,000,000,000.
So this is extremely large and ex and by nomeans small pool of capital.
At the same light, it is a 50 x difference.
What are some challenges with being on thesmaller side as an LP and as an allocator?

(37:07):
The the the smaller size generally meanssmaller teams, which means less resources to
canvas the market and oftentimes less capitalto command attention.
Right?
Everything we just talked about with the largeinstitutions where scale can be a weapon, you
don't necessarily have that as a smallerinvestor.
Now we had the beauty as an OCIO.

(37:29):
The model is to aggregate even smallerinvestors and look and feel like a
$20,000,000,000 institution.
So operate with that heft in the market.
So we were able to, one, I think get moreaccess than what we could have, what any of our
institutions could get on their own.
But we also had the level of flexibility to dothings up and down the size range.

(37:54):
If you're deploying 9 figures a year, billionplus a year, that's gonna be something that,
you know, the small end of the of the manager,horizon is really hard to do in an efficient
way.
So as a smaller institution, not only could we,you know, could we look at some of those
managers, but we're also of a big enough sizethat we could attract the attention of some of

(38:17):
the larger folks.
So by and large, smaller investors face thosechallenges.
Sometimes they can't get direct exposure, sohave to use platforms, fund of funds,
intermediary intermediaries.
But when you're when you're sort of where wewere at at hurdle, that size was was optimal
because you could still do the small thingsthat were interesting, but you also had enough

(38:39):
punching power to get, you know, to getexposure to some of the bigger names.
I've been doing my own intelligence gatheringaround what is the optimal LP size, and
everybody wants to give me a differentnarrative.
But it seems like somewhere between five to tenbillion and 10 to $20,000,000 check is kind of
like the ideal for both getting access andgenerating alpha.

(39:01):
Would you agree with that, or what would beyour optimal size?
I think you could go even a little smaller thanthat.
We talked about the moving the needle, right,the efficiency of capital.
If I'm a billion dollars, I can't write a 10 or20 or $50,000,000 check and have it matter.
But when I am of, I would say the 1 to$5,000,000,000 range is also a place where you

(39:23):
can do a lot of things, be impactful in thesmall and emerging space.
So where I think the true alpha exists in themarket, but then you also have the ability to
do some things that are a little bit larger.
So I'd say as small as a billion dollars interms of total assets and then that can go all
the way up to you know, I I think I'm biasedbut what we had at Hurdle was a great a great

(39:49):
size that gave us that latitude that I couldsee firsthand.
While at hurdle, you would get about 300 GPpitches a year, and you would say yes to only
10.
Tell me about what would make you say no veryquickly.
Is it just returns, or is there something elseoutside of returns that would be like, no.
This is a no pile immediately.

(40:11):
That 300 were ones that I think we we actuallylooked at with any level.
So the in the cold inbound pitches, there'sanother tier above that where I think there is
a blunt instrument that you say this is justnot a fit from size, structure, whatever it
might be that that you've predefined.
Right?
Say, we won't do first time funds.
Okay.
That's an easy disqualifiers.

(40:31):
But but once you get into, you know, that firstconversation, our program at Hurdle had
autonomy over all alternatives, but the programhad the specific need to fill within the
client's asset allocation.
So not only were we putting together our ownpuzzle in each individual pool, but generally
clients were participating on an annual basis.

(40:53):
So it all had to fit in not just their privateequity allocation or private assets allocation,
but also in their overall asset allocation.
And so because of that, I had very fewdisqualifiers at the top, but the one thing I
would try to suss out as quickly as possible, Imentioned it before, but is this lack of
partnership mentality.

(41:13):
So I was focused on the relationship buildingshort and long term.
And I was willing to hear almost anybody outregardless of the source or the strategy.
So we took inbound from our clients, from oursales folks, from placement agents, from
wherever it was.
My goal was to see as much as I could makequick decisions on does this even have any

(41:35):
potential, but because we could go pretty muchanywhere, I tried to be as open minded.
Then after that second call, that's when youreally had to start thinking about what is the
real fit here, bottoms up, tops down, and thinkabout that.
Perhaps a very odd question, but why does thepartnership mentality matter?

(41:56):
In other words, if you had a best in classcrypto or venture investor, and let's say he or
she was not a very likable person, but just agood investor, why would that be a problem?
It's it's partly the way I was brought up andpartly the way I think about the world.
Like, the I think it was Seth Alexander whosaid like, it's don't don't treat relationships

(42:19):
as if they're transactions, right?
If, if I'm buying and selling a security,great.
Like that's, that is a transaction.
That's a trade.
Sometimes get uncomfortable when people talkabout investments they make as bets, right?
Because it's inherently you're investing inpeople and what they're building and the flow
through is either a founder who's buildingsomething, a company that's creating something.

(42:41):
So I always think about it in, you know, whatis the long term nature of this?
So that is where, you know, the ways that I Ithink about partnership mentality are very
much, qualitative, right?
It's it's what do we start talking about?
When that first ten minutes of theconversation, are you already on page five or

(43:01):
six of your slide deck talking about yourperformance and your returns?
Are we are you interested in what this matterwhat this means to me in terms of I'm gonna be
the source of your capital?
Let's talk about what I'm looking for, and thenyou should have the awareness to understand if
if that is gonna be a fit or not and where totake it from there.
So I think there's there's like a pitch style.

(43:22):
There's a conversation.
There's how do we start?
How do we start this potential long termrelationship?
If it's just talking about a deal or somethinglike that, that's a little bit harder.
Now it's not a disqualifier, but I'm I'mlooking out for that.
I wanna see also responsiveness.
I wanna see a lot of these intangibles that,you know, go beyond what's in the pitch deck

(43:45):
and go beyond the performance numbers.
And those are the things that, you know, Ithink about a lot.
This goes back to this long term games and thedevil's in the details.
I got to pitch to Marc Andreessen when I was 25years old.
In retrospect, it was an absurd pitch.
I remember it so clearly because it was MarcAndreessen, still at the time he was incredibly

(44:08):
famous and he gave me so much benefit of doubtand he gave me so much of his attention that I
could never even if I wanted to give a negativereference on somebody Andres and I would hold
my mouth, he just endeared so much loyalty inme for the rest of my career because it was
such a such a difference in power, and he wasso respectful to me.

(44:28):
And that oftentimes plays out over severaldecades where it would be easy for him to be
rude, and that wouldn't really show up in hisnumbers maybe for three to four years.
So there is this kind of lagging indicator inhow you treat people.
And that doesn't mean that you have to investin them, or you have to even keep the
relationship.
Treating somebody like a person and like ahuman being may not show up in the numbers

(44:51):
right away, but actually can deer pretty,loyalty for a long long enough time period.
That's great to hear because I do think the thething that most people want is is feedback and
attention.
And if you can give that to someone who'spitching, you know going in 95, 98% of a 100
conversations are gonna be a no.

(45:11):
But getting constructive feedback, havingsomeone of that caliber be able to pay
attention to you, have used now for the lastsix, seven years, my favorite hashtag is people
first, right?
And that's across the board.
I feel like that's always the tiebreaker.
If you think about managers that look similar,right?

(45:32):
That may have similar returns operating in asimilar space.
How do you feel about that person?
Right?
What is, what are, how do they make you feel?
What is what is a lot of the what are a lot ofthe intangibles that they have?
Because at the end of the day, these are longterm relationships.
And it goes back to to the how do people makedecisions?
They make decisions with their gut and theyconfirm it with data and with their head rather

(45:55):
than vice versa.
I I and I don't know if that's universal, butthat's certainly the way, I I try to fight some
of those biases.
But after this amount of time, I have a goodinclination on after that first meeting, how do
I feel about this person?
Let me take stock of what was going on thereand now what can I do back to those points of

(46:16):
like what are the three or four things that arereally going to drive my decision?
If I'm questioning the character of a person ortheir ability to be a partner, I'm not sure I
can tease that out in references.
I may have more conversations, but those arethings that kind of stick with.
It's interesting because in your seat atHamilton Lane, also at Hurdle, you're probably
in situations where you could make somebody'scareer.

(46:37):
You're a kingmaker.
And I think oftentimes about this, it's like,are the people that other people want to king
make?
There's almost opposite stories on this.
I'll I'll give you two stories.
One is there's a a startup founder.
I invested a small amount in his company.
Made the introduction for him to get acquired.
He made, you know, tens of millions of dollars.

(46:59):
And I was happy to do it.
I wasn't looking for fear or anything.
But then a year later, he told me the storyabout how he reached out to the person.
It was such a compelling story that I had tocheck my email to see, like, if I was
misremembering, but he had literally deletedthat story that I made the introduction to that
person, which I was happy to do at the time.
That's that's one extreme.

(47:19):
The other extreme is you see these people andsometimes you see these subtle signals.
Sometimes they could be they could seem kind ofcocky or overconfident, but they keep their
fund the right size or they they do the rightthing with LPs.
You're like, this person's not only a goodsteward of capital, but this is a humble
person.
This is somebody that checks their has theirego in check.
And my theory is that those are the type ofpeople that may maybe paradoxically will end up

(47:44):
building the next great asset managers becausepeople realize that people like you realize
that if they can make them, they're not gonnago back and forget who helped them.
They're gonna be grateful, and those are thekind of people that you want to to be the next
billionaires.
And I think that's a this kind of soft part ofthe market that that goes underappreciated.

(48:04):
That that is exactly how I see it, and thatthat is great to kinda put that out in the
world too.
Hear the phrase no asshole policy from a lot ofpeople all the time.
That's that's a big word to use to definepeople, but what you can still be an asshole
and be a good investor.
Right?
But are you a good partner?

(48:25):
Does that bleed into other areas that, youknow, if that is a differential for me, if I'm
only return seeking and I'm gonna be okay tobite my tongue and deal with what might be a
less than favorable partnership dynamic, then Ithink you'll have that and you definitely have
numbers and numbers of people who might fallinto that category who are super successful.

(48:48):
But my own personal view and and this thisconcept of king making is is it's certainly
there, but it's it's one of those things wherewho who should be that next generation?
Who are you to decide?
But if I'm looking at characteristics and beingable to put those forward, I'm certainly gonna
favor those that walk in the world a certainway.

(49:09):
So today you have a very interesting seat.
So you consult both GPs and LPs.
Why did you make the choice to consult on bothsides?
I wouldn't say it was a conscious choice.
Honestly, I had after the long and winding roadat at Hamilton Lane Hurdle and then MetLife and
then most recently at a startup calledAllocate, you know, those those were all

(49:30):
experiences where, with the exception ofMetLife, were commercial roles.
Right?
I was dealing with LPs and GPs.
Ran our investment team at Allocate, led ourprivate equity program at Hurdle, obviously was
seeing a bunch of stuff at Hamilton Lane.
All of those things let me we talked a littlebit about it.
Let me see the LP lens, but also understandwhat GPs are looking for, or what LPs are

(49:56):
looking for in GPs.
So what I started doing was actually talkingwith GPs in more of like a coaching context,
where they're like, hey, I'm kinda hitting abrick wall on this.
Can you give me some feedback?
Back to your to your, analogy with MarcAndreessen, All these GPs are starved for
feedback.
In my informal survey of these groups, eightypercent of emerging GPs were getting little to

(50:19):
no feedback.
And that could be the ghosting or that couldbe, sorry, not interested.
Right?
That's not helping them get any better.
So they're starved for feedback.
So that was one of the places where I slottedin.
And I found that most of these groups,particularly on the emerging side, they didn't
know what they didn't know.
So this being able to shine a light for thosegroups, that was a great opportunity.

(50:42):
And as I put it today, and this overlaps withthe LPs, it's the zero to one moment and the
zero to one can be with GPs, anyone who's juststarting out raising their first fund, that's
the most obvious.
But going to fund two or fund three whereyou're targeting institutional LPs now or you

(51:02):
need to figure out what an ODD process lookslike or fund four where now you have a body of
work and you have to figure out how to displayyour performance in a certain way or tell the
story about some lessons learned on five whereyou might have some generational transition.
So zero to one moments are happening everywherewithin the GP community.
So that's where where I plug in to be able togive them some insights on how LPs are going to

(51:25):
view that but also how to optimize that.
And then on the LP side, can imagine it's themost natural transition for me having managed
portfolios and programs for twenty years.
That's where I can lend myself into emergingLPs.
So think of multifamily offices, RIAs, groupsthat are just getting started that may not have

(51:47):
the governance rails to I work with some groupsthat are thinking about what's the what's the
right IC structure?
How should we vote?
How should we produce memos?
What are some of the milestones?
So some of the procedural stuff.
Others, it's eyes and ears in certain markets,helping them underwrite introductions, like a
lot of this stuff where I can help craft aportfolio without having a full time seat

(52:12):
within there.
So LPs more and more these days are looking forthat kind of support.
They're going through their own zero to onemoments there too.
So that's how it all kind of came together overthe last you know fifteen, sixteen months and I
would say it puts me in a very interestingposition as you alluded to where I'm seeing

(52:32):
probably more maybe more GP pipeline than I hadas a sitting LP but with my LP consultation
advice I'm also having a pulse on the market ofwhat many of these LPs are
looking for.
You mentioned 80 of GPs have almost nofeedback, that's one of the sad parts about
being an emerging manager is that it's not onlythat people are rejecting you and saying, no.

(52:56):
You don't even know why.
So there's there's not this, like, feedbackloop.
Now you obviously have this different vantagepoint and twenty two years of experience when
you look at these GPs.
Double click on why GPs that might have all theinternal ingredients, so everything's good, but
they somehow fail to raise money.

(53:17):
What are some common patterns among those GPs?
I should say every GP is a little different, ofcourse, but I think it's the fundamental
mismatch of what most LPs want to hear versuswhat GPs think they have to say.
And I'll unwrap that a little bit because mostof the GPs I'm working with are, emerging
managers, and they just don't have enoughcontext.

(53:39):
They continue to use words like unique andproprietary in this market.
And in their in their own universe, they theymay well be.
And these may be words that that aresupportive.
As an LP, going back to just my my hurdle,Kallian days, a number you cited, three, four,
five, six hundred funds a year, 10 meetings aweek.
Right?
Unique means you're one.

(54:00):
Is it an n of one?
Proprietary means you're the only person withaccess to this means those are things that I
look at with a lot of skepticism, and I think alot of LPs do that too.
So fundamentally, it's GPs are told you have tofigure out your differentiation, your edge, how
you're how you're gonna win in this market.

(54:21):
And a lot of them lean towards we're the onlyones who are doing what we're doing without the
understanding that it's not about beingdifferent in my mind, it's about being
authentic and being better, right?
It's how are you positioned to do the thingthat you're gonna do in the way that makes
sense from all the experiences that you've hadand how are gonna be able to do that better

(54:42):
than peers?
So it's less about unique proprietary, it'smore about different and better.
The analogy I like to use is analogous to theNBA.
You might be an excellent basketball player.
You might be one in a thousand, one in 10,000,but private equity or venture capital market is
the professional leagues.
And just because you're exceptionally good atbasketball doesn't mean you're gonna make it to

(55:05):
the NBA.
So having that context of it's not that you'renot good.
It's not that you're not even extremely good.
It's that the bar is that high, and let's tryto point how you could get better versus
focusing on how you're already good, and kindof reframing that could be helpful, especially
GPs could get in the stark place of constantrejection.

(55:27):
And the stakes are so high, once you quoteunquote make it, you are set sometimes for
intergenerational wealth, so the stakes and therewards are high, but having the right mindset
is also critical.
I would 100% echo that in that, you know, ofthe things, you know we talked about too is
that how GPs perceive themselves, right?

(55:49):
It's are they overconfident?
Are they not?
Like what's the framing of that?
And I feel like some GPs and unfortunate I getto work with who I regard as some of the
smartest and most accomplished people to yourpoint.
Like, have they have the reason to exist.
They have the credibility there, but theysystematically undersell themselves.

(56:14):
It's usually more on paper but even when youtalk to them like that in fundraising right
you're saying like it's not just about theskill but being able to self promote is
essential, right?
So as an investor I think you to establishcredibility and gain trust from investors and I

(56:36):
think that comes from telling LPs exactly whatyou've done and how well you've done it,
including all your accomplishments, but notjust the past, but how that's gonna translate
into future outperformance or a future way toreally pull this through.
And I think that's not that's not meant to bebraggadocious, it's meant to you do it in a

(56:59):
matter of fact way that still recognizes youknow what you don't know and that you're still
learning.
It's this combination of humility and selfpromotion, it's tough.
And you said this last time we chatted, yousaid GPs are at the same time too much humble

(57:19):
and too much bragging.
What did you mean by that?
A lot around the idea that they may lean intocertain areas that they think people want to
hear.
So in my mind you do have to pound your chest alittle bit and talk about the things that
you've done where the perception of that mightbe this person's arrogant, this person is too

(57:41):
self promoting.
But in this market, have to articulate that sopeople will understand what's happening and why
you're positioned in a way that you deservecapital.
And then on the flip side, the humility piecethat is a quality that is necessary.
To your point, one of my favorite emergingmanagers is a guy by the name of Dan Kemmerling

(58:03):
at Dessian's Capital And he wrote a piece wherehe said he went an entire calendar year without
hearing yes.
So a calendar year of hearing no's.
Talk about an industry that humbles you.
I think that is something that you really haveto put into context.
If you're not already humble, if you already ifyou go into this thinking, I'm gonna steamroll

(58:24):
through this, I'm gonna go up and down in myfundraise, everybody's gonna love me, I'm gonna
tell people how great I am.
It's a mentality.
But if you go in with the idea that, yes, I Iknow this is gonna be hard.
My first question to every GP is like, why doyou wanna do this now?
Right?
Why do you wanna run into what are a ton ofheadwinds in one of the more challenging

(58:48):
markets?
So the self awareness that, you know, I I knowthis is gonna be hard.
I believe I have the skills to do it.
But I also know that, you know, things aren'tgonna go my way in a lot of this.
So trying to keep that nice balance, but it isit's tough.
It is very hard for a GP to be both of thosethings, but you do need to be both of those

(59:10):
things to be successful.
The razor that I use on anything that I startis, do I want to do this for ten years?
Because if you commit to something for tenyears, you will be world class, especially in
the business world.
So question is, do you wanna pay the toll often years?
It's not whether you could be world class, notwhether you could be get great.

(59:30):
It's are you willing to put in the suffering?
I'll give you an distinct example.
I started a newsletter probably about a yearago, and I actually got to a thousand
subscribers pretty quickly, which is goodmetric.
Mhmm.
And every week, would sit down, and it would beit's not it wasn't fun.
I didn't love it.
I didn't love it like our conversation.
And I asked myself that simple razor, can I doit for ten years?

(59:53):
First answer was immediately no.
Can I do it for one year?
Probably, I'd hate it.
But if you look at everything as the value ofcompounding, if you ask yourself, is this worth
it for ten years?
And frankly, you know, a lot of people shouldbe should quit more tasks more often if they're
not aligned with them, if they're not naturallygood with it.
People think quitting is bad.

(01:00:14):
I very happily quit the newsletter, and I'mvery happily will talk about it because I think
it's something that's under undershared interms of the virtue of quitting, guess, for
lack of a better
word.
It's a great example, right?
It's investing a fund too.
I mean, that's your time, that's your energy,that's something that I'm sure you could have

(01:00:35):
gritted your teeth and gone through it, butit's about where you get energy.
I take it a step further with most of themanagers that I'm talking to that want to
launch a first time fund.
We do the math, right?
Do you understand raising a $10,000,000 fundnow and charging 2% management fees?
Right?
What what does that mean?
Are you in a position where financially that'snot gonna bring any stress to you?

(01:00:59):
And that that's taking aside all the otherfactors of how you're gonna execute, what
you're gonna build, do you know everything youneed to know?
But just looking at it from a pure dollars andcents perspective, a lot of people don't.
And I think we're probably past that now fouror five years ago when money was cheap and
flowing freely.

(01:01:20):
You saw your friend do it, you wanted to do it,you did it and then coming back and raising
fund too it's a completely differentenvironment.
So now think people have seen some of thecarnage of what's happened but I do have to
give advice to people where I tell them justtake a beat maybe don't do this right now.
Think about the implications of keeping yourjob for another year continuing to do some

(01:01:45):
angel investing, build a track record, thinkmore about this right and that's it's hard to
give that feedback because you feel like you'repopping a balloon for somebody but it is much
more of a you know it's just being realisticand pragmatic about what I see that idea of
context and letting people know it's okayright.

(01:02:06):
I heard a great quote too where it's the quoteis I'm in the middle of the ocean now and it's
gonna take me just as much time and energy toswim back to shore as it is to go out.
So those are that's something where I think youdo have to be thoughtful about when you first
commit, know that, you know, you're you'regetting deeper and deeper into that.

(01:02:30):
So when do you pull the rip cord?
How do you continuously assess this?
All the things that you said.
There is virtue in it, but I like the ten yeartest for sure.
And there's also some some stuff should stay asas a hobby.
Actually, I'm a big, big proponent for top CEOsdoing angel investing on the side.
I think that really betters people being CEOs,but that doesn't mean that you have to go into

(01:02:52):
a fund.
I was listening to Alex Ramosy.
I just had a three hour sit down with him,which will be released in a month or so.
He's, I think, one of the most underratedthinkers, and one of the stories that Heath
tells is he used to be really into ping pong.
And so his so he asked, how do I get better asa ping pong player?
And he looked at it, and he realized it's likedoing 500 forehands a day.

(01:03:14):
And he's like, no.
Thank you.
I'm good being an amateur.
I don't wanna take away the joy from my pingpong playing.
I get that that's really what it takes to getto the next level, but it's not a price I'm
willing I'm willing to pay.
Yeah.
It's all about the the joy and the energy.
Right?
If you can is it sucking it out of you, or areyou putting it back out?
Those are the things too where it's gonna betough.

(01:03:35):
Let's let's, think think about it.
So you also we talked about on the GP side, youalso advise some of the top emerging LPs for
lack of a better word.
Mhmm.
What are the characteristics of these LPs thatyou advise, and how do you help them?
For the most part, the the label emerging meansthey're relatively new to the asset class.

(01:03:57):
They also tend to be understaffed, right?
They may there may be a CIO and a juniorresource that are maybe doing other things as
well.
So they don't have the resident expertise onprivate markets.
So I'd say early on in their in their journey,I will say it's it's self awareness and
humility as well in this case that they willself select into working with me because I

(01:04:20):
think there's a lot of this.
We need to be the ones going out and findingthis and owning relationships and things like
that.
When you put it back into the framework of whatis my institutional organizational goal, how do
I best achieve that, it's the idea of somepeople are afraid to use fund of funds because
they feel like they're outsourcing some of whatthey should be doing internally.

(01:04:42):
The groups that I'm working with and the rightfit for me are groups that have that understand
that they can't do everything on their own andthey need some of that time and attention from
an expert.
And I use this phrase adult supervision wherethese are these are not kids by any means, but
these are groups that, you know, they theywanna push the envelope, they wanna continue to

(01:05:03):
do things internally, but they also want asecond set of eyes who can help them, you know,
avoid the landmines that might be there.
I I coach them through a lot of things in, youknow, just investment due diligence frameworks,
operational due diligence, marketing of a deal,all those sorts of things.
So you seem to have this great skill of selfselecting for the right people in your life,

(01:05:27):
the right GPs and the right LPs.
Maybe you could coach me on this.
How do you signal or set the right intention inthe market in order to select self select into
the type of people that you want?
But you kiss a lot of frogs.
Right?
I think part of it is making sure that that youare out there enough.
Right?
You're it's not a funnel analogy, but it's it'sbe putting yourself in the right places.

(01:05:51):
You know, about six years ago, I startedthinking in public, writing a lot, you know,
whether that be long form, short form.
I found my voice and I think that's somethingwhere I'm curious what you think about it but I
see so much content that's AI generated thatfeels generic so I think there's this concept

(01:06:11):
of authenticity.
I have no problem sharing my background, thethings that I've done, the things that I've
failed at, how I think I can be valuable and ifI can't be I'm happy to tell you as well.
I find now having gone through this you get abetter ear and I think about it in the lens of
how can I help you?

(01:06:32):
In our first thirty minute call if I can'tidentify one way that I can help you and I will
talk to pretty much anybody on that contextthen I'm not to try to sell services or things
that you don't need it's understanding whereyour value lies and how you can bring it to
folks.
Having that authentic voice, the interactionswith folks thankfully I've had this good

(01:06:58):
fortune of now having worked with a lot ofgreat folks and having great experiences with
them so that's my method.
I don't know if that's a playbook or a or acoachable point, but definitely the way I'm
thinking about it.
To use a Tim Ferriss quote, cut fire yourcustomers.
You could go upstream of that and just beingexplicit about this is what I do.

(01:07:18):
This is what I don't do.
I'm not just gonna do this for you because Ibelieve, you know, if I'm working on the wrong
task for you, I feel like I'm being adisservice to to the LP.
So setting those expectations up frontAbsolutely.
I think could be powerful as well.
Matt, this has been absolute masterclass on LPGP emerging.
Really appreciate you taking so much time and Ilook forward to continuing the conversation

(01:07:39):
live.
Absolutely.
Thanks, David.
This is great.
Thanks, Matt.
Thanks for listening to my conversation.
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