Episode 73: Alex Russ of Evercore on
How to Stand Out in the Fundraising Crowd

Episode Transcript  

Shiv: All right, Alex, welcome to the show. How's it going?

Alex: Hi Shiv, it's going great. Pleasure to be here. Thanks for having me on.

Shiv: Yeah, excited to have you. Why don't we start with your role and Evercore and we'll take it from there.

Alex: Yeah, let me kick it off with that. So I'm a founding partner of our private funds group at Evercore, which my partners and I established at the firm 15 years ago. So what we do is we advise private equity GPs on their fundraising strategy and then help them go out and execute their capital raise through our global sales team. I head our business in North America. In that role, I work directly with our clients. I also oversee our sales team that covers limited partners as well as our advisory team who does the work directly with the GPs who engage us. You know, I've played a couple different hats within the business over the last 15 years. That included in the early days building out our sales coverage of limited partners on the East Coast. 

Prior to Evercore, I spent my whole career prior to Evercore with Lehman Brothers in a variety of roles I spent a did a six year stint capital raising at Lehman I. in a hedge funds commodities and liquid alternatives and you know my first job at Lehman was in investment banking, which was traditional M&A, which was an amazing learning experience for me. I think the biggest thing that I learned is that I was not particularly good at putting together quantitative financial analysis. I was certainly never going to be great at it, but I'm a big believer in figuring out, that's part of the journey, maybe figuring out what you're less good at is part of the path to figuring out what you are good at and where you are best placed. You know, coming into Wall Street, I had no idea what a placement agent even was. But what I did figure out in terms of my skills was that I loved connecting with clients. I loved understanding and people. I loved understanding what their problems were, what their objectives were. And I love storytelling. And that's really what, in my opinion, fundraising is still all about today. It's telling a good story. 

And, you know, I was just going to add, I think when I look back on it, you know, we mentioned my prior shop, Lehman Brothers, we obviously went bankrupt, as a lot of people remember in 2008, you know, which at the time was a bit of a bummer. But the silver lining was that my partners and I, by definition, had to start from scratch. And so we got the opportunity to go out and be entrepreneurs and go build this placement agent business. And when we entered this industry, we had no clients, we had no track record, nobody wanted to take our call. I remember one of my, I reflecting on this, I one of my first cold calls in the seat was to the head of private equity at this major US insurance company. And I was all excited to tell him about what we were gonna be doing at Evercore and the placement business that we were building. And he just stopped me in my tracks and said, I'll never forget this. He said to me, yeah, Alex, does the world really need another placement agent? And keep in mind, this was 15 years ago, and there were already a lot of firms that have been doing it even back then for 15 or 20 years. But we had a lot of challenges along the way, the current market included, but we also have had just an enormous amount of fun. Today we're a team of 75 people globally and we're fortunate to work with some of the best GPs in the business.

Shiv: That's a great story. And I think the interesting thing there is that it came from the Lehman Brothers story as well. And you started that right after the Lehman Brothers fell apart. Is that right?

Alex: Yeah, that's right. Within a year, we had moved over to Evercore and started the business here. And you know, it was an interesting time to start a placement business. So we were in the wake of the this is we officially started the business in March of 2010 at Evercore. And so we're in the wake of the global financial crisis. Right. And at that time, LPs were not liquid, right? Everybody's public portfolios were down massively. So investors, institutional investors at the time were, they barely had enough money to continue to back their existing managers, let alone consider capital for new investments. And yeah, and look, that's how we tend to get reward, you know, that's really our value add fundamentally. And frankly, how we tend to get compensated is raising capital from new investors. So you can look back and say, that was the worst time you could have, one of the worst times in the history of the asset class, you could have started a placement agent. I'll just say quickly, I look back at it and say, actually for us, it was the best possible time in retrospect because it was an environment where nothing came easily. And we forged our culture in terms of our, how we go to work advising GPs on how they position themselves and how we go about covering investors and selling and advocating for our clients. We forged our whole culture in that bar market environment. And I think that's really served us incredibly well over the last 15 years, including operating in the current market environment, which is very competitive for different, albeit for different reasons.

Shiv: Yeah, I love that. I'm a huge fan of founder stories. And one thing that I really believe in is that great founders and entrepreneurs have an earned secret, something that they see in a market that others miss, and that allows them to create really great businesses over time. A quick story on our side. So when I started this firm, it was 2019. The reason I started this firm is because I thought marketing was severely under leveraged on the market on inside most private equity backed companies. And we had sold our last business to private equity and I'd seen that pattern across multiple companies. So I started this business and then 2020 happened and COVID happened and the world economy kind of shut down and there were no traditional avenues to grow software companies. And so we started to get a lot of business from people that decided that they need to generate leads from different sources and online and digital and content became way more important and so our business took off as a result of that. What was your insight at that time given that there was a global financial crisis? I'm curious, like that led you to take that risk and take that leap in the first place.

Alex: Yeah, well, I look, I think I think it was grounded in first of all, like I mentioned before, I think it was grounded in belief and I was fortunate to have come together with a group of people, we were working together as a team at Lehman. And I think it was founded personally in the belief that I had found my calling and that this, you know, this little cottage industry within it, within private equity of placement, was an area that really spoke to my personal strengths and the strengths of my partners. Right. And we just had a belief that, you know, that we could be successful in the niche. You know, we also had a view of the time in terms of when we looked at the landscape of, you know, agents and how they were working with GPs. We just, we saw really tremendous, we saw an opportunity and it was, you know, it was a really pretty simple one. we, what we observed was, you know, in the market at the time, you had kind of agents tended to fall into two groups basically. And you sort of had bank affiliated big firms that had big sales teams and were really good at, you they had relationships with investors and they were really good at just pushing product out, right? And they were really sales engines. But they kind of operated like almost like cap intro desk, right? It was sort of like, you have a good product, blast out emails, connect it with your rolodex and it gets in a race itself. And then you had on the other end of the spectrum, smaller boutique firms that probably acted more like you know, more advisory oriented and acted sort of more like went deeper with their clients or more consulting, almost consultant-like in the work they did. And what we saw is that there was just an opportunity. was a empty, there was a big empty space in the middle, right? Which is the vision was if we can go out and build a global distribution capability and all the major, major private fundraising markets, and we can marry that with an approach that is a true advisory approach where you're really strategic partner to the GP not just in helping them raise one fund as a transaction but in working with them and collaborating with them to partner on their capital formation journey and help them achieve their long-term you know objectives and goals as a firm there was really nobody offering both of those things and so it's really simple premise and look the final bit that I got to mention is again I was just fortunate to early on come together with a really talented group of people who all really enjoyed working together. And I still say that that is the special sauce of what we have built. It starts and ends with the team and the culture of the group. 

Shiv: 100%. That resonates with me as well. So fast forward to today. Now you're one of the biggest investment banking firms out there, especially in this space. How do you talk about the fundraising approach? There's a lot of private equity firms that listen to this podcast, GPs that are potentially looking to raise their next fund. How should they approach fundraising or what are some of the key principles that they should think about as they're thinking about raising money from LPs and family offices and other investors?

Alex: Yeah, let me, sure. Maybe I'd start with like, this sort of the, what's the playbook that's working well, right? What sort of, what are the characteristics that most fundraisers that are really successful in today's environment, what do they have in common? You know, I'd say a few things. One, know, you, GPs are going out, you gotta go out with the best performance numbers that are available to you. And so your performance may be what it is. That's not something that you can change in the short term. But what you can control is going out with your best possible foot forward. And what I mean by that is, sometimes being patient pays off. And if your marks are going to meaningfully change in one or two quarters, you know, being patient and waiting to go out with the best hand in your numbers probably pays big dividends for you, in terms of your time in the market and your ultimate outcome. I think the second thing that we see, a really common theme again with the top performing raises today, is that these are GPs who are timing their go-to-market strategy around a recent portfolio win. It's very simple. Timing it around a recent exit, a markup, a liquidity event, and again, storytelling. It just gives you something recent to anchor investors on that's a positive. The third thing is, what GPs I think that are the most successful do a really good job of is they get soft circle commitments for their raise for ideally 60 to 70% of their target before they formally launch the fundraise. Because nailing your first close in private equity fundraising is pretty much everything in this game in terms of setting the momentum and setting the outcome. And the last thing that I can expand on a little bit, you know, is they go out with a narrative that's been, importantly, that's been sharpened and tested by outsiders. You know, in terms of, I mean, take a step back, right, in terms of the market, which we could also talk about what's going on there. Let's just say it's challenging for now. We can circle back, but I always like to say to GPs and to our team, you can't control the macro. We can't control what's going on in the fundraising markets broadly. And I commented on performance. You also can't reinvent your performance, right? To an extent, you're going out with what you're going out with. You can control some of that on the margin, like I mentioned. But what you can control, much more than the first two, is how you show up and how you demonstrate that you have the ability to deliver if given the opportunity. And I think in this market that narrative is everything, right? Like LPs want performance, of course, right? And let's not mince words, right? That's probably the single biggest indicator of whether or not you'd be successful. But they also do want a sharp, compelling narrative. 

Very few GPs, I talked about the four things, if you have all four of those, the Holy Grail, you're in great shape. But the reality is very few GPs can come to market with a perfect hand. But every GP can take control of putting their best possible foot forward with methodical preparation. And the most successful GPs, I think, do three things really well. They nail their narrative, they anchor strong early LP commitments, and they time their launch with momentum. And you know the narrative that I've referred to I mean what I'm really talking about their fundamentally. You know in a competitive environment you've got to have obviously you know we're not alchemists you've got to have good fundamentals you've got to have compelling performance to an extent. But beyond that I think, fundraising in this environment where there's many more GPs chasing you know more capital than is available right you've also got to be able to prove to investors. In that first meeting that you're bringing something differentiated to the table, right? That you're bringing something that they don't already have in terms of exposure in their portfolio. And being able to articulate a clear investment strategy isn't new, but I think today it's just more important than ever. You need that clarity, the focus and distinction. The need for those feels especially acute today. The analogies I give is, you can, in terms of how you get to that narrative, right? You know, one really basic building block you can start with is just, you know, assess your strengths and your differentiators, but don't do it on your own, you know. Run the equivalent of a 360 assessment on your firm, right? Get objective data and feedback, good, bad, and ugly from your investors, from your advisors, from your partners in the market. You know, particularly your investors ask what what do they like about what you're doing? You know, what I one thing I often point out is like, for GPs, you know, we see this all the time, I think a lot of GPs think they're coming in with a really differentiated pitch. And I mean, dozens of GPs a month. I don't even have any capital invested. If I'm meeting dozens of model investors are meeting dozens of week, right? if not a half dozen a day. And you'd be shocked at how many GPs think they're saying something different, but they're actually kind of repeating themselves. And so one thing we've found is incredibly valuable. It's like, just talking to your investors who are already existing with you, who like you, and getting that feedback from them, what do they think? Not just that you're doing well, but that you're doing differently. And they're just going to have better perspective than you as a GP for the simple fact that they're invested in other GPs, right? They have a portfolio and everybody comes and talks to them. So we find talking to existing investors, they often do a better job than the GP in explaining what it really is that the GP is doing differently. And so take that data on board, look in the mirror, take that assessment to shore up your strengths, but also to get real feedback ahead of coming to market on what are the concerns? What do people want you to stop doing? What are they nervous about? Have you done a deal that they think is sort of off strategy and you're suffering from style drift? Do they have questions about the team and the incentive and so forth? And that perspective is just invaluable. It also often gives you an opportunity to identify negative perceptions that might be misperceptions. And whatever that is, I think getting that in the front end, you know, taking the time again to do that performance review on yourself. You know, it just allows you to prepare, which is a concept I'll keep coming back to, for that first impression, right? Because you, you know, you only do, you only get one chance with an LP to make that, that first impression. And you want to be able to articulate what you're doing differently, but you also want to be on the front foot. So when you get those challenges, right, because LPs are always looking for reasons to say, no, they have too many opportunities versus the capital. When you get those challenges, you're prepared on the front foot to answer those.

Shiv: One of the things that we notice in our business, because we meet like five to 10 private equity investors every week because of the podcast, because of the consulting work that we do. And a bunch of things that you said align with our experience as well, where we'll meet middle market PE firms and several of them will regurgitate similar talking points. It's, we're looking for software companies that are mission critical, 10 to 25 million, rule of 40 and has positive net revenue retention, 100% plus, and you start to seed them all very similarly. And it's like, well, how are you generating alpha if 20, 30, 50, 100 of you are seeing the exact same thing because you're going to be chasing after the exact same deals in the marketplace. So your point about going back to your existing GPs and trying to figure out why did they invest in you in the first place, it's like marketing 101, right? Doing ICP analysis, looking at the customer segments and why you win with them and figuring out, how do I get more of them to kind of come on board and support what we're doing and what really differentiates us and leaning into that differentiation. think people are almost afraid to lean into differentiation because they feel like, I'll lose this other capital or other customers that are kind of sitting over here, but differentiation actually helps you win more of your raving fans and people who really believe in that vision that you're trying to build out.

Alex: No, that absolutely resonates. I to your point, I like the number of people, the things that GPs will come in and talk about that, again, that they think is different, know, the obvious one, proprietary or deal flow, everyone smiles at that one. But we have operating partners, look at our network of advisors, you know, these are not differentiators. These are are table stakes, right at this point in the asset class. And so you kind of have to do the work again. You you mentioned, think sort of like customer, we give us like, it's a customer feedback survey, right? It's, it's, it's not rocket science, but I'm, you know, you'd be surprised at how few, GPs historically have taken that approach on the front end. I think people, you know, these are groups that have, especially groups that have been successful in the past. I think there's a view of like, well, we sort of know what we get out to work before, you know, we'll just go out and talk about that. And, you know, in this environment, which is more competitive than ever, think you're trying to use a playbook that you used for your raise back in 2021, I don't think sets you up particularly well for 2025.

Shiv: Yeah, one of the things that I notice is that, know, value creation as a term has really changed over the last decade, right? So five, six years ago, if you bought a company and you optimize the operational structure, found some EBITDA efficiency, you raised new prices, expanded your margins, you could have your multiples expand or the next turn, you kind of, the next year the company's valued at way more and you've done your job as a capital allocator in a lot of ways. I think in today's market, I find that there aren't enough capital allocators that truly understand what it takes to grow a business. And so they're still allocating the capital and they have certain playbooks that are uniform across industries, but it's rare to find someone that has a unique perspective. And I'll give you an example. We met a firm recently, I think they're going to be one of the few podcast episodes before this one. And they invest specifically in industrial companies. And the founders of that firm are former operators in manufacturing and industrials. And so it's not just like they have operations advisors, they are the types of business owners that have run those companies. So their perspective is to go buy those kinds of companies that they see a ton of enterprise value in, or they can create those efficiencies and revenue growth for. And I think more of that is going to become commonplace because a private equity firm in some ways has to operate these companies to generate more enterprise value over time instead of just kind of managing it through spreadsheets.

Alex: I think that's absolutely true. Well, you hit on a couple of themes there that certainly we're seeing from our state as well. I mean, look, one of them is a trend towards specialization. And that's been a long-term secular trend in terms of investor appetite. Investors have gradually over time gravitated more and more to backing GPs who can really articulate domain expertise. And that can be specialization by sector, I think in the example you gave there. That's very common and it represents a big part of portion of our client base. could be specialization by strategy, know, turnaround value. But that's a, you know, that's a, that's a pretty key theme. You also touched on, you know, just the value creation. And I think that the model of having people at the senior investment team level who are former operators has obviously been gaining a lot of steam over a number of years. And I think is, you know, a really attractive offering to limited partners. You know, oftentimes you have people from an operating background you know, and you've maybe got some people from more of a finance and investment background. That's okay Marrying them together. I think that's a stronger story today than people who are from a pure, you know, banking or finance background, so that that that absolutely speaks to to sort of what we have been seeing overall. And I always say the three things that the market is, if I was to say like high level, what kind of strategies are in favor, or what kind of funds are getting done. I always say it's like, one, as the environments become more uncertain and more competitive, scale has been rewarded. So you have a lot of capital going to big firms, not all the big firms, but the top performing big firms. I think something like know, I think last year something like 60% of the total capital raise went to the top 20 fundraisers. So obviously, like big firms are having an advantage. But the second one is specialization. The last one across all of them is quality, right? And that could mean quality of returns and like sort of top performance. But I also think it means back to my point, mean, it's quality of narrative and the story that you're telling. Because we're also seeing people who have limited track records, first time funds being successful if they're able to really articulate a value proposition to the investor. And then the last thing I just listed picking up on what you said, Shiv, is like, I do think we've also just seen a general trend towards a bit of focus when people in their LP focus and diligence on wanting to see, ideally they love to see GPs managers who are delivering returns through organic earnings growth through really adding value and building these businesses as opposed to relying exclusively on, you know, M&A, multiple expansion, etc.

Shiv: Right. Yeah. And do you see that some of the firms that are not evolving or taking on some of these initiatives or building the right story, having sector focus, building more operational expertise, the firms that aren't doing this, are they having trouble fundraising or have they missed their marks too much to the point where LPs are more reluctant to fund their next round?

Alex: Yeah, I mean, look, there are some firms out there that looked rock solid like five years ago and who are quietly fading away. And I think the reason is that they didn't evolve their strategy. They didn't evolve their story. You know, average just doesn't really cut it anymore. Average in terms of performance, but also just average in terms of what you're offering. I think that not to pick on anyone's strategy, but I think one of areas of the market we've seen challenged is you're a middle market GP. You're investing in three to four major sectors of the economy, which LPs might view as a quote unquote generalist. And your returns are fine, but they're not flying off the page. And you just really haven't evolved an edge in what you're offering people. And so again, in this environment, if what you're offering is like kind of standard returns and standard industry exposure and a standard playbook of, yes, I've got some operating partners, but without really creating a special sauce in any one area, I think that's just a really challenged area to grow. Now, it takes a really long time to kill a private equity firm, as you know, right? But I think what we have seen, you know, and there's a bunch of examples of this market are, you know, those there's more funds than ever that are failing to hit their target, right? And those firms are coming in under target, or they're just struggling to grow. And after years of growth, in a long time primary bull raising, you know, bull market for capital raising, that's in of itself a major challenge for a lot of these firms. How do they continue to incentivize the second and third level of partner and principle coming up in that firm? So that's definitely something we're seeing.

Shiv: How are LPs responding to that? Because I think about the fundraising environment four or five years ago where capital was easy to come by, interest rates were super low, it was easy to put debt on. We've seen companies that have been incredibly acquisitive and backed by large private equity firms and bought five, seven companies, grown to 500 million plus, and then having to carve out and sell off assets because they're missing their covenants. And there's obviously realities associated with that. And then I also think about PE firms that have certain marks on paper that show that an asset is worth X amount of dollars. But in reality, today that asset would not trade for that same amount, right? And I would imagine LPs are seeing that across the board. So how are LPs balancing that need from like, okay, we definitely need to find a differentiated capital allocator, but it turns out that a lot of people that we've bet on are also facing similar realities because it's also a macro trend. So how are you seeing that in the market?

Alex: I mean, look, one, I think just going back to what's going on in the market, one thing, one way we're seeing that just general challenge manifest is that fundraising is taking a lot longer than it used to, right? LPs are taking more time, being more deliberate about where they invest their capital, right? And we talked about the supply, demand and balance, first of all, has never been wider. Right. More GPs in the market, fewer dollars to go around. And so it has resulted in really like a tale of two cities in the fundraising market. And you know, as I said, there's LPs are committed to the asset class long term. Right. So they're still investing. And I think we're quite bullish that they will continue to back private markets. They'll continue to maintain or even increase their allocation. But, you know, what we're, how we're seeing that manifest is that the dispersion of outcomes in fundraising has never been wider between the sort top performing firms and then sort of everybody else, right? So LPs are being very deliberate in where they commit capital. As I said, they're taking their time. Fundraising is taking, the average fund right now has taken 20 months to get raised. I was - an interesting stat from last year from 24, like, for I think was 30 to 40% of the capital that closed, of the funds that closed last year, at final close last year, were in the market for two years or more. You know, that's to raise their money. So what is that investors are taking their time and being patient, they're rewarding the top, you know, the people who can come with the best story, the top performance. And average, like I said before, average just isn't quite making the cut in the way that it used to. So I think that's kind of how we're seeing it manifest. 

Maybe the other angle is like LPs in terms of because you touched on just sort of liquidity challenges in the deal market. I think where we see that manifest in the GP-LP world you know, is in a couple different ways. One is the rise of of CVs, right? And, you know, the big challenge in fundraising today from in terms of the demand side from investors is simply that they are just not they just don't have the liquidity, right? They're not getting back the distributions. GPs are not exiting at the same level that they were previously. And so that means they're not returning capital back to limited partners have less capital to recycle. So one thing we're seeing GPs take advantage of is our continuation vehicles and other secondary market technology to create some liquidity absent a really robust traditional M&A market for LPs. And then on the LP side, we're also seeing LPs, a meaningful pickup in LPs selling pieces of their portfolio to create liquidity through LP secondaries.

Shiv: Yeah, we've seen that trend as well on the secondary or mezzanine financing side to create distributions, I guess. I'm curious in your position, does that sometimes create a weird conflict of interest or I'm just curious how you manage that is you have the LP relationships and then you have the private equity firms or GPs that you're working with that you have to kind of position to those LPs. Like, how do you go about navigating that, especially in cases where the PE firm doesn't have enough of a compelling story or there's work to still be done there. How are you advising firms like that?

Alex: Yeah, and your question of, Shiv, is sort of like, how do we manage the relationship between the LPs that we cover and then obviously our mandate to go out and raise the capital for the GPs? 

Shiv: Correct, correct, correct.

Alex: Well, I'd start. I think the first thing I'd start with is we try to be you're only as great, you're only as in this gig, you're only as good as who you represent. Right. So I think. First and foremost, we try to be really thoughtful in where we ask for the business, right? And our goal is to work with the highest caliber GPs in the market, and it always has been. So on the front end, think that's getting that right is really, really important. And that has meant for us and the way we run our business, sometimes you have to be, you know, it's less of a focus on being the biggest or volume. It's, you have to let some things go. It's more of a focus on, you know, partnering with GPs where you really have conviction in this story. And so we believe that that's just in our DNA in a very meaningful way. believe really strongly if we're going to ask for the business, we're going ask for the business because we think we can execute. That does not always mean we think it's going to be up and down and easy but where we can see the angles, believe in, we see the fundamentals. Often, often we'll see, we'll say the fundamentals are great. Maybe the GP is not as good as they could be in how they tell their story. And that's a great opportunity for us. And that might require market education. You know, it might mean we go in knowing, Hey, we're going to have to do missionary work here and really build this brand. It's not going to be up and down, but this GP has a right to exist. And we see the, we see the angles and we feel really passionate about, um, helping that GP better articulate those. 

And then on the LP side, that's, look, that's, have a phenomenal sales team and they have been covering on average these LPs for a very long time. These are real relationships. And I think excellence in coverage and in sales is about, you know, understanding, getting to know your LP, getting to know the organization and the individual, understanding what their problems are they're trying to solve, what their goals are, what they are specifically looking for and what they're not looking for. And I think the credibility there is, you know, listening to them and, you know, not necessarily approaching them with every opportunity we're mandated with on if it's not a good fit for their program and their objectives and being really thoughtful about when we do go to them. And, you know, it is a bit of a virtuous circle there. I think being patient and being thoughtful on the business that we ask for with the private equity firms and the firms that we partner with has over time, you know, generated a reputation in the market for our coverage team with LPs that, you know, if a limited partner gets a call from Evercore on a fund, that it's going to be really high caliber fund. And, you know, so I think we navigate it through trying to represent great, great firms and trying to provide great coverage and really be an active listener to limited partners and what they're focused on.

Shiv: That's awesome. I love that answer. And I know we're coming up on time, but I just have one last question. If there is a private equity firm listening and they're trying to figure this out or they're trying to plan for their next raise or their next fund, what advice would you have for them to kind of prep their firm in the best way possible to raise or hit their fundraising objectives with LPs?

Alex: Well, I'd say fundraising success in 2025 just kind of comes down to three things, right? Narrative, momentum, and discipline. And the firms who are going to survive this cycle aren't all going to be the biggest, right? They're going to be the clearest about who they are and what they are bringing to the table. So, yeah, in terms of like how do you kind of create the best hand for yourself, we talked about it a little bit, we've talked about the importance of narrative, the importance of, and when I say narrative, I want to be clear, I mean authentic narrative, right? This isn't smoke and mirrors and marketing slogans. This is really taking the time to understand your value proposition, right? And what you bring to the table that's different. And not just going off of your gut, but really doing the work there to understand market perceptions and package accordingly. I think the second thing we talked about is just creating early momentum. And one thing that I think GPs often get wrong is they can take existing investors for granted. Existing investors are going to be the bedrock, the foundation of every successful raise in this environment. So GPs need to bear hug their existing investors early and often. And an extension of that is, again, we've talked about momentum. You know, in my mind, that is hitting 60 to 70% of your target. You really want to go out and engage with your LPs, existing investors, really get an honest assessment of where they are. Don't just assume that they're going to be there and launch and then tell them about it, right? Do the work to understand where their heads are at and, you know, get that soft circled interest early before you formally go out. The other couple of things we didn't talk about that are related are just be really, you know, again, focus on what you can control. 

So back to momentum. One of the things in the GP's control is where you set your target, right? If you sort of think about what I said, you want to hit 60%, 60 to 70% of your target in a first close. Well, part of getting there is being realistic about what's the right target that I should set based on the hand that I have, based on the feedback from my LPs and sort of reverse engineer that to set yourself up for success, right? Don't just pick a number that you think you should have because that's how you grew before or that's just the amount of capital you think for your strategy, right? Fundraising is not, getting it done is not a guarantee. Fundraising is an opportunity, it's not a guarantee. And then leverage the carrots that you can make available to you to differentiate your story, the simple stuff. Co-invest is typically something that a GP is controlled to an extent. Bringing LPs a direct deal, those who are set up to do that, is a super easy and obvious way to differentiate your offering and get your PPM from the bottom of the pile to the top of the pile with a live deal that can help LPs diligence you better, probably increase their net adjusted returns, and so forth. And then, you know, the sort of the other carrot I often mention to people, and this kind of ties into timing, is, you know, be thoughtful about your timing. Ideally, you want to be in a position where you can go out and do a first close and very quickly be in a position where you're starting to invest the fund and do deals, see that first close with early deals. Yeah, that gives you an advantage on the back end when you're driving towards the final because LPs love to be able to diligence deals in the portfolio and not just underwrite a blind pool. So I think that's a great way to generate momentum. It's also a great way to kind of build an insurance policy if your raise does take a little longer. The earlier you can start investing deals and seeding that portfolio, that can make it really attractive for LPs to come in on the back you come in on the back end and make sure you have, you wrap up strong and you deliver and a really impactful final close. But you like my final comment, it would just be, if there's one thing I've hopefully imparted, it's just, again, you only get one chance in fundraising to make the first impression. So be sharp, you know, be deliberate and just be more prepared than you were in your last fundraise.

Shiv: That is fantastic advice, Alex. So with that said, if there is a GP listening or PE firm listening, how would they get in touch with you to potentially work with Evercore?

Alex: Great question. Well, we can get in touch via our website or I guess if they could follow up with the podcast, I can provide my email address and contact details. We look forward to those conversations and connecting with the firm.

Shiv: Awesome, yeah, we'll be sure to include that and everything else in the show notes. And with that said, Alex, thanks for coming on and sharing your wisdom. We haven't had an investment bank really break down what it takes to raise money from LPs in the past. And I think this was really insightful for all the folks that listened. So, appreciate you coming on and doing this.

Alex: Shiv, it was real pleasure. Thanks for having me on. Really enjoyed it.