Two minutes please

A partner at a buyout firm who had been heavily involved in a successful fundraising recently recounted to PEO the amount of work that went into preparing for the presentations to prospective investors.

Huge amounts of portfolio company data was gathered and digested in order to evidence the team’s track record. Photo copiers expired. Ring binders groaned at the seams. The reference network was pages long. And the pre-meeting practising was intensive: what other funds was the investor already in? What allocation strategy had been adopted? What was the person taking the meeting like? “Do we know their hobbies?” You get the picture.

Though the preparation for each meeting took considerable time, the meetings themselves were often disarmingly brief. “These are clearly very busy people,” commented the GP, “and you’re left wondering how some can cope with upwards of 30 existing GP relationships.” The presentation clearly had to be short, sharp and to the point. More telling still was the later disclosure by several investors who joined the fund that the decision whether to go forward or not was taken very quickly indeed. How long in fact?

Two minutes.

And it wasn’t the last couple of minutes of the meeting either. What a number of the LPs were saying was that they had taken a view on the fund, the firm, the people – the whole proposition – within the first two minutes of the presentation.

Which is a pretty good reminder of what makes private equity unique. For sure the due diligence guys will feast on the numbers, and the need for total veracity with regard to structure, operational set-up, let alone past performance of a GP group is a sine qua non. But it’s still an industry shaped by people, perceptions – even instinct.

That is why we at PEO look forward to our annual poll of readers  so much. It’s a unique opportunity to find out how the people in the industry perceive their peers. Which firms are esteemed in which markets? Which individuals are regarded as having been the most significant during a year? Is it the best fundraiser, dealmaker, exit winner or something more intangible?

Or, to put it another way: who would you put your money with in two minutes?

The poll for the 2004 Global Private Equity Awards is opening with this newsletter so we’d like to invite you to cast your votes now. There are three regional sections and you can vote in some or all of the categories in each. Here are the links:

Europe
North America 
Asia

Please do vote: this is the only poll where there are no short lists, no judges, no sponsored categories. It’s just you and your votes. And it will only take a couple of minutes.