Evan Katz is CEO of Crawford Ventures, Inc., a graduate of Wharton and Harvard Law School, and a twice-elected director on the Hedge Fund Association (HFA) Board of Directors (2014-2019). He has received numerous finance and Wall Street awards and honors, and frequently speaks and is interviewed as an expert regarding hedge funds and investing in general, and also successful fundraising in particular.
Mr. Katz’s investor relationships include some 1,000 endowments, foundations, funds of funds, insurance companies, multifamily offices, pensions, and single-family offices, which collectively have several trillion dollars of investable capital, and allocate hundreds of billions of dollars to hedge funds (typically $10-$100+ million per investor per fund).
He and Crawford may be reached at (212) 904-0909, EKatz@CrawfordVentures.com.
“Best Practices from A to Z for Successful Hedge Fund Fundraising from Family Offices and Institutional Investors – 26 Top Fundraiser Secrets and Tips of the Trade”
- Tell us about yourself? – Grew up in Long Island, New York, was a finance major at Wharton, and then Harvard Law School (same class as Michelle Obama, then Michelle Robinson).First practiced intellectual propertylaw (patent, trademark, copyright and computer/Internet law).
- Tell us about what you mean to be an Alpha Female in the investment community? – Play on words, because of the meanings of “Alpha Male” (aggressive) and hedge fund “alpha” (explain).
- What type of funds do you raise investor capital for? – Mostly hedge funds, private equity funds, venture capital funds, and real estate funds. I also raise investor capital for operating companies (mostly technology and medical life sciences companies).
- What do investors look for when they invest in a fund? – The “Three P’s” – Performance (track record), pedigree (at or came from top firms), and process (e.g., infrastructure, repeatable edge).
- How did you get into this business? – I was a practicing attorney, had a great career in intellectual property law, but discovered that I was even better at fundraising for my clients.
- You support women in the investment world tell me a little bit about your experience? – We try to (a) hire women, and (b) raise capital for funds that are owned or managed by women. And out of the 1,000 institutional and family office investors that we work with, many take that into account.
- How is raising capital for a PE or VC Fund vs Hedge Fund Different? – Similar, but different professionals at the investors. That is, different investor professionals cover HF, PE, VC, RE.
- Tell us something that our listeners would find interesting about you? – Love to cycle, and had a wine-themed wedding.Also, very proud to have gotten 15 people jobs and 8 people married!
- I saw you wrote 44 (previously 26 A-Z) Top Fundraiser Secrets and Tips of the Trade (Please share some of those secrets with our listeners) – PPT is on our website. I will review several tips.
- How can someone get a hold of you? –EKatz@CrawfordVentures.com. And our website.
- When you went to Wharton, what percentage of your class was women? How did you feel about that? And what do you think that it was like for the women? – About 15%. Challenging.
- How do those percentages compare to the HF and alternatives industry now? – Very similar.
- You once mentioned that you have attended “100 Women in Hedge Fund” events, now “100 Women in Finance”. What was that like being one of the only men in a room with 100-200 women? – Initially, awkward, then fine. I also first met my wife at a 100 WIHF event.
- How do you try to recruit and hire more women? – By every year attending dozens of finance, hedge fund and other Wall Street events. And we used to attend women’s finance events, but now must do not let us do so. So, we no longer can use that as a recruitment method.
- How do you and the industry try to get more women and girls interested in finance and Wall Street? – It has to start when they are young, with math, science and the math/chess teams! We recently did a CFO search, got 100 resumes and there was not one single female applicant. Perhaps about half of hedge fund IR is female, but less than 10% of PM’s are.
- How do the returns of woman-run funds compare to men-run funds? – Similar, but less tail risk!
- And how do many women-run funds and global leaders tend to handle risk differently than most men? – I will discuss differences in both hedge funds and also in the response to Coronavirus.
- Investors get hundreds or thousands of e-mail pitches a year. And some will not even open or read e-mail pitches from people they do not know. So, hire someone who already knows many institutional and family office investors, and has longstanding relationships with them. He or she will close orders of magnitude more investments then you cold calling, and he or she also will do so in vastly less time as well.
- Have the right fundraiser at your firm and fund. Specifically, someone who understands your fund type and strategy, and who knows many investors that allocate to it.
- Similarly, a fundraiser who has relationships with many investors that allocate to a fund of your size and stage.
- Pitch investors that are suitable for funds of your type of strategy, size and stage. For example, if you are a high volatility emerging manager, more family offices will allocate to you then most endowments and foundations, which tend to look for older and more established funds, and/or low volatility funds.
- Nobody invests anymore in a one- or two-man or -woman band. You need some infrastructure and people. If you cannot afford great infrastructure, top service providers and a dedicated CFO, then consider selling a piece of your management company, in order to get operating capital. Getting diluted a little will be more than made up for by putting yourself in a position to make your fund 10-50x larger. Would you rather own 100% of a $10 million fund, or 80% of a $500 million fund?
- Stick with standard fund structures, places of incorporation (Delaware and Cayman) and also industry standard fee structures. I will discuss examples of HF and PE funds that had unusual “better fee structures for the investors,” but few invested.
- Be nice to investors’ administrative assistants and treat them with respect. They deserve it, and also are the ones who often set up your investor calls and meetings.
- “Polite Persistence” – Always follow-up. “Tick-tock” between monthly e-mails and calls. And a non-response is not a no. This is not like dating! Investors are swamped. They usually will say no, if they are not interested (because they do not want to get more calls/e-mails). Give them time to review your materials and to respond.
- Make a fund video! We live in a YouTube and video age. It gives investors a “free look” at your fund and firm, without making them commit to a 30-minute call.
- Make certain that your e-mails and PPT are mobile friendly. Don’t use miniscule font!
- Never e-mail investors at night or over a weekend! I work lots of nights and weekends, and always schedule the e-mails to go out the next business morning. All major e-mail apps and CRM systems support scheduling your e-mails to be sent later.
- Briefly highlight your fund’s strong performance metrics in your e-mail header itself.
- Always give some details in your e-mail. Use bullet points. But not too long. Never just say “see the attached”! Tell investors why they should want to read your docs.
- Always attach your documents. Do not use Dropbox links. Many investors cannot access them. Explain why. And they definitely cannot if they are on an airplane!
- Don’t repeatedly call investors until they pick up. They have Caller ID too! Many funds pitch me to invest in them, and I never will pick up calls from anyone who calls me relentlessly. Give investors their “space” and let them get back to you when they can.