The New Rules for Investor Relations (Alternative Assets)

The New Rules for Investor Relations: KAP’s Fundraising FlywheelTM

KAP Group provides services and products to private equity and real estate managers during the fundraising and investor relations process.

KAP’s services are focused on making it easy for investors to invest with you.

Jen Hutter Liz Weiner Allan Siegert

Agenda

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Introduction to KAP’s Fundraising Flywheel™

The State of Play Today, over 1,000 private equity managers and nearly 500 real estate managers are raising capital

Private Equity (PE) and Real Estate (RE) Funds in the Market Over Time

812 920

1,153 1,192

466

478

451 492

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The Investors’ Pipeline

… and invests in 3

155

On The Road Again

Managers spend an incredible amount of time on the road raising capital, at a HUGE opportunity cost

24%

30%

46%

Breakdown of time on the road by RE funds in 2015

Average time in the market by RE estate funds

The Old Path The conventional way of raising capital – fundraise, fatigue, repeat – is tiresome, inefficient, and ineffective

Relationships, Relationships, Relationships Relationships remain the most critical part of capital raising

20%

26%

34%

36%

49%

61%

Proportion of Respondents

Methods Used by Institutional Investors to Source New RE Funds

A Different Approach

It’s time for a different approach to fundraising

KAP’s Fundraising Flywheel™ Philosophy The Fundraising Flywheel is a systemic approach to engaging with investors on an on-going basis

KAP’s Fundraising Flywheel™ Philosophy

KAP’s Fundraising FlywheelTM allows you to build loyalty among existing investors and to meet new prospects

Outline Your Communications Plan

KAP’s Fundraising Flywheel™ Philosophy

KAP’s Fundraising FlywheelTM allows you to build loyalty among existing investors and to meet new prospects

Outline your Communications Plan

With whom should you keep in touch?

Annual Meeting, Annual Letter

Communication Timeline

Have a systematic approach to reaching out to partners and prospects throughout the year

Thank You Set Expectations

Quarterly Report

Acquisition Announcement

Quarterly Report

Quarterly Report

Save-the-Date for Annual Meeting

Disposition Announcement

Good News: We closed or sold a deal!

Create a one page summary that describes the investment, sourcing, returns, and exit assumptions

Resist the urge to send your

investment committee memo

Bad News: Team Changes, Investment Level Changes

Pick up the phone to deliver bad news to your partners; if it’s really bad news, get on a plane

Departures. New Hires Investment UnderperformingIt’s time to make a call

Market When Not Marketing

JOE FUND I

JOE FUND MANAGER

SALLY FUND MANAGER

JOE FUND II JOE FUND III SALLY’S FUND II SALLY’S FUND I

JOE’S FUND ASSETS SALLY’S FUND ASSETS

Know your audience

Investors are busy! Standout by building a relationship before you are raising capital.

PORTFOLIO INVESTOR

KAP’s Fundraising Flywheel™ Philosophy

KAP’s Fundraising FlywheelTM allows you to build loyalty among existing investors and to meet new prospects

Market When Not Marketing

Developing Your Non-Marketing Presentation

Prepare an impactful non-marketing presentation.

Showcase your strengths both as an investor and an investment manager.

Be transparent about the state of your firm.

The Plan of Attack

Every investor meeting is the “big” meeting – make it impactful

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Say Thank You and Follow Up

Create a Capital Raising Strategy

KAP’s Fundraising Flywheel™ Philosophy

KAP’s Fundraising FlywheelTM allows you to build loyalty among existing investors and to meet new prospects

Create a Capital Raising Strategy

Finding the Right Prospects

Proactively seek out partners with whom your firm can grow

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Technology is Your Friend

Once you have a list of active prospects, leverage technology to track investor activity and log your dialogue with investors

100 Fillmore Street, 5th Floor

Denver, Colorado 80206

303-500-3320