I seem to provide this information to newer and smaller funds often, so I thought I'd cut down on repetition and provide all you gorgeous small, new, and diverse fund managers with a short guide to early stage investors. Now start smiling and dialing!

(c) 1980 Paramount Pictures

(c) 1980 Paramount Pictures

State Plans To Prioritize

Arizona - Has made at least one investment in a large 'emerging' manager.

Arkansas - Teachers Retirement System reportedly tabled the program in 2008 but 2011 document shows active investments in MWBE managers. 

California - Looks for EM's based on size and tenure but prohibited by Prop 209 from looking at minority status or gender.

Colorado - Colorado PERA added an "external manager portal" in 2016 to make "it easier for us to include appropriate emerging managers when the right investment opportunities develop."

Connecticut - Based on size, minority status or gender. Awarded mandate in 2014 to Grosvenor, Morgan Stanley and Appomattox. 

Florida - Looks at emerging managers on equal footing with other managers. 

Georgia - Invest Georgia has $100 million to work with venture capital and private equity firms in the state. There is an emphasis on emerging managers and emerging funds per press reports.

Illinois - Perhaps the most active emerging manager state, based on gender, minority status and location. 

Indiana - Based on size, minority status, or gender. 

Kentucky - Reported $75 million allocation at one time.

Maine - Has made at least one investment in a large 'emerging' manager.

Maryland - Very active jurisdiction with details available online for gender and minority status manager information.

Massachusetts- Includes size, minority status or gender. 

Michigan - $300 million program.

Missouri - Status based on size. 

Minnesota - Past investments in emerging managers. 

New Jersey - Status based on size. 

New York - Status based on size, minority status or gender. $1 billion mandate in 2014. $200 million seed mandate in 2014.

North Carolina - Status based on size and HUB (minority and women owned) status.

Ohio - Status based on size, minority status or gender. 

Oregon - Emerging manager program in place. 

Pennsylvania - Status based on size with preference for minority or women run funds.

Rhode Island - Plan in place from 1995.

South Carolina - Status based on size.

Texas - Actively engaged with emerging managers. Status based on size, minority status or gender.

Virginia - Status based on size, minority status or gender.

Washington - Has issued prior emerging manager RFPs.

Oh, and if you reproduce this list, be sure to cite MJ Alts. Thanks y'all!

Seed Programs to Explore


Music to Groove To While Dialing for Dollars

The summer can be a magical time. Whether you’ve spent the past couple of months hanging out with family, taking a much needed vacation or getting sucked into the daily political dumpster fire in the U.S., most folks spend all of August (and most of July) focused on more leisurely pursuits. In the investment industry, not a lot gets done this time of year to be honest. But in just a few short weeks, watch out! The conference calendar will kick into overdrive, investors will start planning end of the year allocations (and redemptions) and you’ll need to jump back into capital raising and investor relations with both feet. 

To help you make the switch from porch swings and gin and tonics to panel discussions and bad chardonnay, I’ve enlisted the help of Emoji MJ to give you your “back to school” checklist. Be sure you pay attention, class…Emoji MJ may be taller, thinner and have tamer hair than I (aside: Emoji MJ is clearly French), but I’ve still heard she can be a real beeyotch.

(c) MJ Alternative Investment Research

(c) MJ Alternative Investment Research

1) The first thing you need to assess is whether you have the right staff in place for your marketing and investor relations efforts. If you're a smaller fund, you may be pulling double duty as both portfolio manager and the marketing staff, but even then, you should take time to think about whether that's the best use of your time and, frankly, whether you're any good at raising assets. If you do have internal or external help, make sure they are a good fit for your firm and have great connections with potential investors. If you're wondering what questions you should ask, check out my blog on The Vicky Mendoza Line And Fund Marketers.

2) Your next order of business will be to compile an investor hit list. This means taking a hard look at who your best prospects may be. This does not mean creating a wish list of investors that could write you an enormous check so you don't have to think about capital raising again. If you're sub $100 million, that likely means thinking about how you can meet additional HNW individuals and family offices and maybe a MoM (Manager of Managers/Fund of Funds) or two. If you're in the big league, your prospecting will obviously look a little different. For those of you who need a refresher on this particular step,  please revisit this blog on Targeting Potential Investors. 

3) The third item on your "back to school" prep list is to revisit your pitch book. Make sure it works for you, whether you're walking an investor through it, sending it in advance or leaving it as a follow up. Your pitch book is really an extension of you, so make sure it is as compelling and complete as possible, without overloading unsuspecting prospects with superfluous (or uninspiring) information. If you need pointers on building the perfect pitch book, please check out The Ten Commandments for Pitch Book Salvation AND The Seven Deadly Sins of Pitch Books.

4) Got your pitch book nailed down? Good! Now practice how you're going to convey all that juicy info into one 5 minute elevator pitch. That's right...no investor, no matter how charming you are as a fund manager, is going to let you blather on to them endlessly at a cocktail party or during a conference break about your overall awesomeness, so now is the perfect time to perfect your pick-up lines. If you haven't given this much thought, or if your existing pitch isn't getting you to second base (actual non-conference contact with an investor), then take a moment to review these Seven Secrets to a Successful Elevator Pitch. 

5) While you're doing a little pre-season homework, it's probably a great time to refresh your monthly letter and tear sheet. Do you know how many times I get just a nekkid monthly (or quarterly) performance number plus YTD performance in a bland email? It's not optimal. So review the proper Anatomy of a Tear Sheet as well as these Five Tips For Great Monthly Letters. 

6) Conference season is about to go nuts. So in addition to picking up a gallon of hand sanitizer and some Tums (rubber chicken doesn't always digest well - and don't get me started on the vegetarian options at most events - WHAT ARE THOSE THINGS?!), you'll need to have a strategy. What conferences will you attend? How much can you spend? Speaking, sponsoring or showing up? You'll want to strategize to make the most of the time and effort you spend away from the office. To help you, check out these Conference Dos and Don'ts. 

7) After you meet a ton of new investor prospects at conferences this fall, wow them with your elevator pitch, performance and pitch book, and send a few outstanding monthly letters, you'll need a plan for how you'll stay in touch with them going forward. I mean, as much as a fund manager would love it if an investor "put out" on the third date, in these due diligence times, that's pretty darn unlikely. So how do keep communicating without driving anyone batcrap crazy? Try these tips for Staying in Contact With Investors. 

So good luck students! Emoji MJ and I hope you make the dean's list of capital raising this fall!

Cheers Emoji MJ Gif.gif



I love this time of year. The airport delays. The wonky weather. The smell of burning dust in the heating vents. Snow panic that empties grocery store shelves of white bread and whole milk, even if the temperature is stubbornly in the 40s.

Oh, and the look of shiny hope on the faces of fund managers everywhere. 


But before conference season road trips get too far underway, it's probably a good idea to think about where managers are spending their (finite) fund raising resources and where they could ease up on the gas. 

(c) MJ Alts

(c) MJ Alts

As we commence another year of the great capital raising dance, I thought it would be fun to channel all of the back and forth, yes and no, hide and seek frustration into a little game. One that harkens back to a happier and simpler time, and one that anyone who has ever been under 12 or over 60 is familiar with.

So yes, ladies and gentlemen, this year we're gonna play a little Capital Raising BINGO. Simply print out the appropriate investor or fund manager card below and mark off (and date) each time you get a designated response.

The first investor who gets a BINGO can draft me as a single-use meat shield at an event.

The first fund manager who gets a BINGO will also get a prize, custom tailored to the fund in question. 

Happy capital hunting! And may the BINGO odds be ever in your favor!

(c) 2017 MJ Alts

(c) 2017 MJ Alts

(C) 2017 MJ Alts

(C) 2017 MJ Alts

When I was a young lass in Nineteen Never Mind, I used to spend Christmas Day with my mom and the week after Christmas with my dad. He would come for my sister and me in Tuscaloosa, Alabama and drive us all the way to Ft. Worth, Texas for another week of holiday overeating and unwrapping.

It was about a 12-hour drive, door to door, but we tried to make the best of it. My sister, stepbrother and I would clamber into the “way back” with a cooler full of Cokes,bags brimming with healthy snacks like Pop Rocks, potato chips and Slim Jim’s, nestled securely next to my Dad’s Coors that he snuck over state lines, Smokey & the Bandit-style. There, we’ll loll about (with no seatbelts), stuffing our faces (not dying from the Pop Rock/Coke combo) and alternate singing, sleeping and snarking at one another for the entirety of the 12-hour trip.

At some point, we would inevitably get on my Dad’s nerves. There would be over-the-seat, disjointed swats, strong language and finally a threat to “TURN THIS DAMN CAR AROUND AND TAKE EVERYONE HOME.”

We kids thought that was super funny. 

What wasn’t hilarious, however, was 2016 - an epically craptastic annum bad in so many ways that it even made Mariah Carey’s New Year’s Rockin’ Eve performance look apropos.

So, while 2017 is still barely warm, I thought I’d give it a little, tiny warning.

If y’all pull the same stunts this year that you did last year, I’ll turn this year around and take us all home. At the very least, I’ll figure out how to off everyone using nothing but Pop Rocks and warm Coors. You get me?

What am I talking about specifically? Well, here are some of my key investment industry pet peeves from 2016:

Looking in the same tired places for returns, and then pretending shock when they don’t measure up – Investors from Kentucky to New York and a few states in-between reduced or redeemed their hedge fund portfolios in 2016, based in large part on lackluster “average” returns. While many point to “average returns” in the neighborhood of just under 5% though November, perhaps it’s best to look at how the best (and worst) performers are faring. Articles have shown top performing hedge funds gained 20% or more through November 2016. And over the four quarters ending 3Q2016, top HFRI decile funds gained 29.54%. The bottom decile funds lost 15.57%. So there are funds that have performed strongly over the last 12 months IF an investor was willing to look for them and perhaps take risks on lesser known, newer, nicher or funds otherwise “off the beaten path.” It kind of reminds me of the old joke “Doctor, doctor, it hurts when I do this…” How ‘bout in 2017, we stop doing that, lest it continue to hurt.

Using “averages” to talk about investment funds, particularly alternative investment funds – Speaking of, with the kind of return dispersion above, why don’t we stop talking about “average returns” full stop. Even when it comes to white-bread mutual funds, getting fixated on “average” returns doesn’t really help. How do I know? One of the top, non-indexed US mutual funds returned 30% in 2016. Yeah, I said 30-freakin’-percent, more than twice the return of the S&P 500. But by fixating on “average return,” no matter what the asset class, investors may in danger of writing off entire investment strategies based on normalized returns that don’t accurately represent reality. In 2017, let’s focus more on the opportunities unveiled by return dispersion and less on pesky averages, shall we? Oh, and the same thing goes for fees discussions, too.

Saying you want to hire diverse talent, but complaining that you “just can’t find any” – So I’ve heard (or read about) more than one asset management firm complain about how they’d “love to hire women and minorities” but they “just can’t find qualified applicants”, and they’re not willing to lower their standards. Come. On.

Women comprise 50.8% of the U.S. population according to the Census Bureau. Minorities make up nearly 23% of the U.S. population. Do some simple math on the number of women and minorities in a population of 323,127,513 and it boggles the mind that there are ZERO qualified diverse applicants.

Indeed, when I read or hear this, one of a few questions generally comes to mind:

  1. How homogenized is this person’s personal network and how might that impact other investment research and decisions?
  2. How much effort does this person put into finding diverse candidates? Do they contact recruiters who specialize in the area? Do they go to conferences put on by 100 Women in Hedge Funds, NASP, the NAIC, and others?
  3. If there is a pipeline problem in this person’s line of work and they genuinely want to fix it, what are THEY doing to fix this issue in the long-term? Do they bring in diverse interns? Diverse entry-level positions? Do they promote these individuals?

Inappropriate benchmarks – Why, oh why, do we benchmark every damn thing to the S&P 500? It’s become so pervasive that I just caught myself doing it above (the top performing mutual fund invests in small caps, not S&P-level stocks) and I know better. Just because it’s well known, and just because it’s been crammed down our throats by everyone from consultants to financial advisors, doesn’t mean it always fits. Small cap fund? Ixnay on the S&P-ay. Hedge funds? Can’t be expected to outperform in bull markets because they are HEDGED. Private equity & venture capital – comparing illiquid investments to a liquid benchmark seems a bit silly, no? So in 2017, let’s either agree to benchmark appropriately so we can make a sober decision about whether an investment has performed well (or not) OR let’s just decide to sell everything and invest only in the S&P 500, since it’s where it’s at, obviously.

Communicating inappropriately – This may be just a “me” thing, but in 2016 I noted an increasing number of asset managers who text investors. What. The. Actual. Hell. Texting is informal. Texting is immediate and insinuates you deserve an instant response. Texting invites typos. Texting doesn’t allow for compliance review or disclaimers. Unless you are meeting someone that day and need to say you’ll be late, early, or identifiable by the rose in your lapel, or unless that investor has given you express permission to text, don’t. The investors I know who put their mobile numbers on their cards are coming to regret it. And if you lose that, you’ll only spend more time waiting on callbacks.

So cheers, all, to a happy, healthy, prosperous, properly benchmarked 2017. May we lose fewer of my 80s idols and more of our investing bad habits.







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