Is this really the right move? The right firm?

Based on interviews with 12 senior alternative investments marketers from private equity, private credit, real assets and hedge funds. Contributors took on newly created Heads of BDIR roles within the past year to over a decade ago and are primarily based in the United States. All were incredibly generous with their time and insights.

The appeal of joining a growing firm as its first Head of Business Development is understandable but there is a lot to consider.

“I was attracted to the opportunity to have a bigger impact, to get in early with a firm poised for growth, where I could build the business as more than a marketer, and where I could participate in the economics of that growth in a meaningful way.”

“I wish you wrote this article a year ago. If I knew then what I know now, I would have asked a lot more questions.”

Universally, everyone interviewed for this article stressed the importance of making a measured, thoughtful decision through spending many hours with the hiring firm, asking tough questions (of yourself and the firm) and doing off balance sheet references.

“There is a reason these interview processes play out over many months and, sometimes, years. As you become more senior in IR, you only get so many moves.”

“Don’t be shy about doing deep diligence. You can trust the MPs are doing the same on you. It’s a risk with confidentiality, but you have to take it.”

“I would say a key takeaway of your article should be to educate people on how wildly different these roles can be.”

The aim of this Ask Me Anything is to help marketers explore these roles with eyes wide open.

Contents:

• Questions to ask yourself
• Questions to ask the hiring firm
• What to look for
• Red flags

Finally, I offer a ton of direct advice from the 12 professionals interviewed for this piece and close with an unconventional idea from yours truly.

Questions to ask yourself:

• Do I just like the idea of doing something more entrepreneurial? Do I know enough about the reality of what exists beneath the enticing title etc. to make a sound decision?
• What is my honest level of knowledge and conviction in the platform?
• What is it that I really want to learn from this experience?
• What do I have to give? What experiences have I had throughout my career to prepare me for this role? Do I really have the skills to deliver on expectations?
• What is it that I truly love to do? How will this role satisfy or deviate from that?
• When faced with a lack of structure, how do I respond?
• Do I have a strong enough foundation of solid tenures (and success) in prior roles to risk what might be a quick move?
• How can I diligence these opportunities while maintaining confidentiality? Who can I trust?

Questions to ask the hiring firm:

• Why are you hiring a dedicated marketer? Why now?
• How are you thinking about the path for this role? How do I fit that?
• How do you define success in this role 1, 3, 5 years from now?
• What are the firm’s plans for launching new funds / strategies? What role do you anticipate the marketer will play?
• How has fundraising and IR been handled in the past? What will their involvement be moving forward?
• Where have prior marketing efforts succeeded? Where have they failed?
• Can you walk me through an LP meeting you were in? How did it go?
• What has allocator feedback been historically? How have you adapted?

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What to look for:

• A sweet spot where firm leadership has enough fundraising experience and battle scars to “get it” without being so overly invested they won’t give up the reins
• Transparency with marketing materials, recent investors letters and market feedback
• How have they been telling their story? How has it been received?
• How do people treat each other across every level of the organization; how supportive or competitive are they internally?
• Are the senior investment professionals willing to travel? How commercial are they? How coachable?
• Does firm leadership understand the intricacies of becoming an institutional player?
• Have they demonstrated a readiness to commit the required resources?
• Are those resources in line with their capital raising expectations?
• Do they have an understanding of the timeline for raising institutional capital and reasonable expectations?
• Is the marketer being set up for success?
• Do the investment professionals see marketing as additive or as taking profitability from them?
• Will the marketer be able to hire a team? What support exists in the interim?
• Is there consistency across the firm for this hire?
• A clear understanding of what differentiates this firm from its competitors. Do they acknowledge the landscape is crowded? What makes them exceptional?
• Joint ownership for success and challenges vs. a culture of “if the marketer raises capital it’s our performance but if they’re struggling it’s their fault.”
• Interest among LPs that is fresh and on an upswing
• Is there a disconnect between what the hiring firm is saying and actual inflows coming in? ?

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Red flags:

• Lack of transparency around marketing materials, recent investor letters and/or the existing client base and retention. *offer to sign an NDA
• High level of turnover, particularly among junior staff (stability among senior ranks is less indicative given handcuffs and, potentially, inertia)
• The hiring firm isn’t asking tough questions of you (e.g. capital raising track record, depth of relationships)
• Being asked to create a business plan at very early stages of the process
• Historical marketing efforts that sound something like “we’ve just called our buddies and gotten them to invest” and an assumption that cultivating a more institutional LP base will be a similar experience
• Overly aggressive compensation (indicative of potentially unrealistic expectations, a short term / transactional dynamic)
• Under market compensation (raises questions about how they value the function and if they’re willing to commit the resources to building a real effort)
• Instability on the investment team
• Lackluster performance
• Firm economics are heavily concentrated
• Speaking disparagingly about the placement agent, marketers in general and/or LPs
• Limiting meetings to just a few people; prospective hires should have access to a wide range of people across the firm
• A fully remote interview process. It’s important to experience the office and feel the dynamic among the people who work there, from receptionist through founder.
• Your intuition is telling you something is off even though they seem to be saying all the right things

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Direct advice from those who have made this move:

“You need to look at accepting this role as the beginning of another mountain, not the summit. You’re going to be doomed to disappointment if you’re looking at it as a Rolex moment, a stamp that you’ve arrived. Even the best diligenced roles have surprises in store.”

“So much is out of your control. The tough questions you would ask in any job search become even more important if a firm has never had someone in this seat before. Ask them over and over if they are really going to put the resources behind this.”

“These roles require you to use every facet of your brain and every angle of the career you’ve spent years building; you will never be bored.”

“Being a teammate is very different from being alone. Growing pains are often underestimated for those who don’t have an entrepreneurial spirit. It’s not for everyone. But it’s hard to know that if you’ve always been in a well-resourced environment.”

“These roles are very different from being a salesperson. There is a ton of admin work and infrastructure is missing that I used to take for granted. The build of all that takes a whole lot of time away from calling on LPs, way more time than I was used to. It’s a totally different time equation now.”

“Scenario test your thesis. Ask yourself: how will this strategy fare if there is a market turn? Will I struggle to raise capital?”

“It’s better if you really value the off cycle LP interactions. You get to know people on a different level when you’re not asking them for anything. You get to know the entire organization more holistically.”

“Walk away if they’re shocked by marketing compensation. This is not going to change and it’s not a battle worth fighting. It’s forever embedded in their brains.”

“You really can’t escape responsibility and with that comes a lot of pressure.”

“It’s not the blank slate you think it is. You need to fit in to the culture. They hire you to make changes but are then taken aback when you suggest a big change. It can be a slow adjustment requiring a soft, skillful approach.”

“Talking to several different LPs is crucial as viewpoints vary wildly depending on their unique experiences with a firm.”

“As yourself, “What is it that I truly like to do? What am I hoping to get out of this role?” Getting clear on this and making sure it matches up with the firm’s needs are probably the most important things.”

“You really need to execute based on how you want people to feel rather than what you’re hoping to get out of it.”

“If calling on LPs is really what you love to do, you better ask yourself if this is the right move. There is so much else to do.”

“People who’ve grown up in a more transactional environment or who like instant gratification are likely to struggle. You have to like being involved in the more operational side of things and be willing to roll up your sleeves.”

“Lack of established norms and protocols can be really difficult. Some people are naturally suited for this environment but most are not and it’s really hard.”

“Don’t be afraid to ask direct, tough questions, especially about growth and expectations.”

“Be cautious if something seems off, if the expectations they’re laying out are either too high or too low.”

“You want to be at a firm where the principles understand how the game is played and have reasonable expectations. You don’t necessarily want to be the teacher.”

“Differences of opinion are not necessarily an automatic negative. Give it time. If there is a debate at the top over the marketing hire, this can result in some great conversations. It can actually help to have an advocate and a devil's advocate. Ultimately, you will want to reach consensus during the interview process.”

“Most on both sides don’t realize that if you’re good at your job, the investment professionals should be traveling more not less. Firms often mistakenly make this hire to relieve them of the burden of capital raising. But this just isn’t how it works. A great marketer will increase both prospect meetings and market updates to existing investors; LPs don’t want to just see you when you’re raising capital. This can be a serious time commitment. Are they willing?”

“Assuming they're hiring you because focusing on investments is important to the founders, create metrics that track their effectiveness with LPs. This can be powerful in demonstrating you’re being thoughtful and strategic with their time and that their involvement in fundraising and IR meetings have impact.”

“If the founders have been heavily involved in fundraising, walk through existing LPs and come to agreement on where the relationships will reside moving forward – transitioned to the marketer, remain with the founder or a tag team approach? Do this before you resign.”

“Get metrics for success, reporting, work/life balance, travel and conference budget and anything related to compensation in writing, particularly carry. Accepting assurances of “oh we will allocate in the future” is a terrible move.”

“If your gut is sending up warning signals but you’re taking the leap anyway, get everything in writing. This can be an appendix to the offer letter or even just an email.”

“Assessing cultural fit from outside the organization is really difficult. Talk to as many people as possible, both within and outside. Ask for LP references but don’t stop there (knowing you will get friendly ones).

“Invest in putting together a business plan. It really benefits both sides and can be a great launching point for more iterative conversations. Include costs they may not be considering (CRM, content creation, conferences, travel, dedicated resources). This should happen in advanced stages of the process.”

“You will no longer be defined by your success as an individual producer. There are so many other responsibilities. The nature of the role really changes. If you’re someone who really thrives on LP interaction and relationships, so many distractions will pull you away from that. It’s an important consideration.”

“As a marketer, you already need to have a high EQ from reading investors all day. Leverage that. You really do need to ask tough questions and make sure they understand the process.”

“If you’re really going for high growth, are you prepared for things to be challenging financially for a while? If you swing and miss a few times, you can find yourself bouncing around unintentionally. What is your risk tolerance for that? Do you have the tenure and stability earlier in your career to serve as a counterweight?”

“Joining on day one is very different from joining after year one or two. They (GPs) need to experience the difficulty before they can appreciate you.”

“There is a s*** ton of risk. When you’re thirty, you can take that on. When you’re fifty, you only have so many moves left.”

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An unconventional idea from yours truly…..

As an executive recruiter, I’ve worked on these roles several times. Often, the mandate is to recruit a # 2 or # 3 from a top tier firm. The idea is that such candidates would bring best practices, training and LP exposure to a hiring firm’s nascent fundraising/IR efforts.

Given all the potential landmines explored above, what if these prospective candidates ran an unconventional job search? What if they approached their current boss, not with a resignation letter but with transparency, agency and with mutual respect?

“I am thinking of exploring this as my next step within the next year or two. I want to find the right firm and would really value your support and guidance.”

Benefits to the job seeker could include leveraging the network, perspective and guidance of their more senior manager. Hopefully, this would help one avoid some landmines.

Benefits to the manager could include predictability and stability on their team, particularly during periods of intense fundraising.

Both sides could maintain, and perhaps even strengthen, an important professional relationship they’ve likely spent years cultivating.

I appreciate this approach is unconventional and will likely not work in many situations. The risks are high, timing tricky to coordinate and the level of trust and vulnerability on both sides sits far outside the industry norm. However, it’s worth pausing and asking oneself “could this approach work for me?”

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About Willow Hill Advisors

Laurie Thompson founded Willow Hill in September, 2019, after spending 16 years in the financial services practice of Heidrick & Struggles. She has placed fundraising and investor relations professionals from the Partner, Head of Global Distribution level through Associate, with a concentration on senior-level hires. Clients (hiring firms) are predominately top tier alternative investment managers.??

Willow Hill is exclusively a retained firm and executes only a select number of mandates at a time, ensuring clients receive the highest level of focus and attention. Through deep market knowledge, long term relationships and established trust, Willow Hill provides unconstrained access to top caliber talent while ensuring potential placements are thoroughly vetted and referenced.

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Laurie launched the “Ask me Anything” series in 2022 with the intention of offering candid insights and advice as themes emerge from her conversations with prospective candidates and hiring managers.

?A former boss once quipped “Laurie’s directness can be a surprise to the uninitiated.”?

?Welcome to Ask me Anything. Consider yourself initiated!

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Your questions, comments and topic ideas are always welcome and appreciated.

Laurie

[email protected]