I’ve been doing a bit of work with the fundraising team lately. Just small stuff so far, but I’m pretty sure I’m turning heads. Thing is, the Shop has always been very keen on getting its deal guys out on the road talking to potential LPs. It’s a brilliant strategy. How can any investor fail to be impressed when someone like me – a rainmaker, a guy with his finger plunged deep into the financial pulse – shows up and tells them where to spend their money? It’s a no-brainer.
My guess is that all this stuff about tough fundraising conditions is just an excuse made up by firms that rely on their IR people to do all the hard work. (No offence to IR people. But they’re basically just glorified PRs, right?).
As you’ve probably realised by now, I have absolutely unique people skills. So this kind of thing comes very easily to me. That’s why they were so thrilled when I volunteered. Or as my boss put it: “Fine, if you must. But please don’t speak unless you absolutely have to.” (LPs like it when you’re enigmatic, I guess).
Of course, I’m starting small: UK local authorities, which in terms of both sophistication and chances of success is basically one step up from trying to borrow a million pounds from your Gran. But I know that I’m just serving my apprenticeship; I’m already looking forward to the day when I get to jet out to the US with the Shop’s top guys, and make nice with the big pensions.
If I had my way, this fundraising lark would be a pretty easy game, especially for the big boys: just find the right shockingly underpaid public officials, take them out for dinner to a restaurant so disgustingly expensive that they couldn’t afford a bowl of soup between them, furnish them with a few free laptops or something, give them a cursory look at the pitch book for your latest megafund and BOSH! – they’re signing off on a few hundred million bucks before you can say “illegal inducements”.
However, I’m told the regulators take a dim view of this kind of thing nowadays (killjoys), and you basically have to declare it to the SEC if you give one of them a breath mint. This is clearly idiotic. Surely decent freebies are the main attraction of working in the public sector? I’m not suggesting these people could do my job or anything. But I’m sure we could find a place for them in Compliance or something. Maybe IR.
That said, none of that stuff would probably help if, like me, you’re trying to woo Scottish government types – since the Scots’ idea of extravagance is putting batter on their Mars bars. And there’s no point taking a box of iPads up there to dole out as they’d only get pinched anyway.
More disappointing is that some of these prospective LPs always seem to miss the point. They have a unique opportunity to quiz Nicholas Pye on the nuance of what’s really going on in the big buyout world, and all they ever want to talk about is fees. Frankly, they should count themselves lucky that they still get 2 and 20. Given our absolutely unique value creation record, we could really be charging a lot more than that for the privilege of being in our fund.
“I just don’t see how you can justify 2 percent on a fund that size. It’s ridiculous. You could have your LPAs carved into gold for that money,” one particularly small-minded official told me the other day. I just smiled sympathetically, and made a mental note to suggest that to IR.
I think part of the problem is that when they look at me, I just scream glamour. OK, so I dine regularly at Claridges, enjoy regular trips to continental European conference venues and wear a watch that’s bigger than most of their heads (and twice as valuable). And yes, their management fees are effectively financing all this. But hey, that’s the price you pay to get in the Shop. Besides: I’m worth it. Trust me.