KAP’s insights on private equity investor relations and fundraising


What’s the role of each item in your marketing suite?


Clients often ask us how they should allocate scarce hours to the creation of fundraising materials. Understanding the role of the various items in your suite of marketing collateral is a first step. When do you use a one pager versus a pitch book? What should you have prepared before you embark on a raise (hint: all of it!)? After following more than 80 institutional fundraises, here’s our take on the five most commonly used and requested items:

  1.  Pitch book: It introduces your team, track record, strategy, and competitive advantages, while showcasing your value add through case studies. Your pitch book is the cornerstone of your brand, your first and best opportunity to tell your story and highlight your accomplishments. After flipping through your book, investors should understand who you are, what you’ve done, where you fit in the private equity universe, and what makes you a cut above. The body of the book should consist of 15 to 20 clean, tight, visually compelling pages.
  2. Fact sheet (or One Pager): Your elevator pitch on one sheet of paper. Essentially, an executive summary of the pitch book. A fact sheet is a perfect introductory attachment. We recommend sharing one with prospects in advance of an initial meeting. Include the principals’ experience, high-level historical performance data, and a succinct description of the strategy and offering. Use the remaining real estate on the page to highlight unique attributes of your platform or vehicle (e.g., your view on a niche investment opportunity, rationale for unconventional target markets, or points of differentiation vis a vis competitors). 
  3. PPM: Primarily a legal document including a concise upfront section that describes the team, strategy, market opportunity, and historical track record. By the time an investor requests the PPM, they are likely more positively inclined to move forward with a commitment. The “marketing section” should be well-written, professional, and consistent with messages conveyed in the pitch book, but it need not be a tome. The “legal section,” which should be drafted by reputable fund formation counsel active in your space, includes a summary of terms governing the GP / LP relationship. Don’t worry about information growing stale over the course of a raise; updates to performance and market data can be conveyed via other materials and communications. Counsel will guide you when the need for a supplement to your originally issued PPM is warranted.
  4. Standard DDQ: Comprehensive set of FAQs about the manager and fund to share with prospects following initial meetings. The standard DDQ, typically shared with LPs after in-person meetings, presents an opportunity to frame your own questions and respond strategically. The first task is starting with a comprehensive list of topics on most LPs’ checklists, which range from company history to cyber security. You’ll dive into greater detail in your standard DDQ – and have more opportunity to demonstrate thought leadership – than you will in your other materials. Your standard DDQ also serves as the repository of stock answers from which you’ll pull when LPs and consultants follow up with their own questionnaires. Starting with a broad collection of considered replies will serve you well during a raise.
  5. Track Record: Table(s) containing complete deal-by-deal and cumulative fund or vehicle performance information for the manager’s past investments. While your track record will be included in your pitch book, PPM, and DDQ, it merits special mention. Prior to diving into other materials, invest significant time in preparing your returns both through business plan and at liquidation value. Plan to repeat that process at least semi-annually. Use the data that your deal-by-deal track record provides to showcase your strategy and strengths as an investor. During diligence, LPs will dissect performance patterns and return drivers; extra points for managers who do some of that work for them by conducting their own attribution analyses. Be sure to have counsel and your compliance department or consultant (if you are a RIA) review prior to sharing with investors.