I attended the Private Banking Latin America conference in Miami last week. The most informative panel I had the opportunity to listen to was a panel of fund of funds who spoke about what they are looking for in terms of Hedge Fund Managers they are currently looking to invest with.
The panel consisted of representatives from fund of funds ranging from $1 billion-$8 Billion AUM and the major themes that were discussed were the following:
1. Talk freely with investors who you meet with about the stocks in your portfolio. Be able to give reasons why you are long in a particular company and why you are short in another company. They want to know if you are doing your own research or just reading print outs that other firms distribute.
2. Be able to pitch your fund without your pitch book. All of the fund of funds on this panel agreed that they are now making Hedge Fund managers put away their pitch book during meetings in order to get to know them on a more personal level. They want to hear more about your fund’s competitive advantage in a way that is less scripted. Plus, they all agreed that the majority of funds that come in to pitch them have the same companies do their pitch books.
3. Do not lie about anything in regards to your fund/business. One of the fund of funds on this panel said that they have now begun making all of their employees go through an FBI body language training program. This program gives these fund of fund employees the skills to be able to tell if you are lying within the first 10 minutes of the interview.
4. Have some if not all of your personal money in the fund. Investors love to see that you have your own money in the fund which shows them that you have confidence in yourself and your business model.