Episode 5

full
Published on:

18th Aug 2021

Interview with Jen Hicks, Client Development Director of Capital Fund Law Group

00:00 Andres introduces Jen Hicks, Client Development Director at Capital Fund Law Group, a boutique law firm focused on alternative investment management fund formation across hedge, private equity, real estate, private placements, digital assets, and more.

02:30 Jen discusses her transition from a career in law enforcement to a career in alternative investments

5:50 Jen talks about women in the investment industry, gives advice on how female fund managers can be their own best advocates, discusses the evolution of the alternative investment industry, and shares a insightful story of a female fund manager who pitched her strategy

12:56 Andres shares his own personal journey in the alternative investment business and his perspective on being an "outsider" and having to find his path forward

16:13 Jen shared her advice on marketing and getting out in front of prospective investors to fundraise

19:43 Andres shared insights on how diverse and female-led investment firms have outperformed

22:08-25:52 Jen discusses how the different alternative investment managers can learn from one another's strengths and tendencies

29:49 Jen discusses fund domicile decisions

33:27 Jen discusses strategies to raise capital, build a brand, leverage PR and the press, access emerging manager programs and public pension assets

39:20 Jen discusses alternatives to traditional funds such as pre launch services and incubator strategies allowing managers to market and get started

46:06 Jen discusses importance of learning from mistakes

48:18 Jen discusses what she does to recharge and some new hobbies she started during COVID

50:30 Jen wraps up and shares why she is optimistic about the future of the alternative investment industry

Transcript
Andres Sandate:

Today on the podcast, I had the opportunity to interview Jen Hicks, who is a Client Development Director at Capital Fund Law Group. Jen is based in Salt Lake City, Utah, but Capital Fund Law Group is headquartered in New York with an office in Memphis. Capital Fund Law Group is a boutique investment management firm focused on advising hedge funds, private equity funds, real estate funds, digital asset funds, opportunity zone funds, and others. They are a high touch boutique firm that works with established and emerging fund managers or managers who are setting up incubator funds or early stage funds. They do a lot of pre-launch work, Jen has a very hands on role working with the clients and prospective clients of the firm. Our discussion covered not only Jen's entrance into the investment management space, the asset management world at the law firm, but also her career in law enforcement prior to joining the industry and joining Capital Fund Law Group, I think you'll enjoy the conversation if you're interested in, you know, what goes into setting up a new investment partnership, how to go about working with different service providers, some best practices, some things to avoid, and common mistakes. If you're an established manager, I think you would find this conversation interesting because we talked about different fundraising strategies and techniques. And also some of the things that Jen and her firm Capital Fund Law Group are seeing as managers broaden their offerings and launch new strategies and products. So I hope you'll enjoy my conversation, as much as I did with Jen Hicks, Client Development Director of Capital Fund Law Group.

Andres Sandate:

I want to hear more about your journey into alternative investing. Because I don't know about you. But for me, I didn't wake up and just like one day find myself working in the business. It's been a, it's been a winding journey, met lots of colorful people along the way. But there's something about the space that I also enjoy. There's lots of innovation. There's lots of new things constantly happening. So I want to ask you like, what was it about the business that was attractive? You know, when when you decided to leave law enforcement and a career in law enforcement, and tell me about being in Utah and some of the things that you're seeing going on out there?

Jen Hicks:

The transition, like you I mean, I definitely didn't wake up one morning and think, wow, I really want to learn more about investment funds. Never had any, you know, finance, alternative investments type experience. And so I was in sort of a gray area of what do I want to be when I grow up. And, you know, I thought law enforcement was going to be it for me, you know. I loved what I did, and I loved helping and, you know, I saw an opening for an assistant at the firm, and I'm just a sponge, when it comes to wanting to know as much as I can about something. I don't care what it is I'm doing, I want to make sure I'm doing it right. And so I asked questions that I had probably no business asking the partners and just looking into, you know, those conversations and what we were discussing, and, you know, made my way up to, you know, doing what I do now as the director and working with managers. And so now it's kind of come full circle in a way of, I can still get fulfilled, and find that joy in helping, just in a bit of a different way. And, you know, helping managers understand the roadmap, understand what hurdles that they may be facing, that they might not be aware of, or the mistakes that I've seen managers make. And so, yeah, I find a lot of joy in that. And I'm lucky enough to be in Utah, where it's beautiful and be able to do it.

Andres Sandate:

I've imagined that there's some parallels. And I won't go too far because I haven't worked in law enforcement, but it is a field that's very male dominated. And you look at the alternative investment space, and the vast majority of I would imagine the folks that are picking up the phone and reaching out to you and calling are men. And that's changing and that's a good thing. And it's it's great that the industry is becoming more diverse and is, there's there's seems to be positives signs and positive movement that our industry is becoming more diverse, more inclusive, more welcoming. And I think that's all positive. And it's all a good thing. But what have you noticed about engaging on the telephone and in person and over Zoom with the folks that are calling? Are there any parallels between work that you were doing before and today, in terms of, you know, just helping your clients get out of their own way? Sometimes or helping them realize, you know, hey, you do have a good story, you do have something to say, and contrary to what, you know, the industry expects, you should do it this way. Or you should try and, you know, go about it your way, like, what are some of the parallels or not?

Jen Hicks:

Right, I think there's both ends of the spectrum, where you see a lot of similarity and a lot of differences. But, you know, I think in any male dominated field of work, you're, you're right, in the sense that you've got to get out of your own way, a lot of the time. And, and for women, a lot of it is, you know, physiological. It's, it's how we are and how we think, but women tend to hold on to shame, and not be able to move forward past something that they still think everybody may be judging them for. And really, they're judging themselves, instead of moving forward learning and growing. Sometimes we can just get stuck in this rut of imposter syndrome. Feeling like, look at everybody else in the room, why am I here? You know, I mean, when I first started, it was, you know, and networking and really getting to know our providers, you know, afterwards, I'd be like: "Why am I on the phone with the senior vice president of a major bank, like this is, I don't have a place here," you know, and, and I had to really just tell myself to stop it. Because in the end, I don't know anything about banking. And half the time, they don't know anything about forming a hedge fund. And so we both have things we can offer each other. And women have things that they can offer to men on a team, and vice versa. And I think it was Preqin, I can't remember who did it, you know, a study on it about women in leadership, and how few that there are in this industry. But typically, women do not going to say better. But women really excel in those leadership positions, because they're more risk conscious, and thoughtful about the approaches that they take, in terms of, of running a company. And so I think in that regard, there's parallels that men and women can complement each other, instead of one trying to trump the other, you know, having to be the better having to, you know, do whatever and make your mark. It's just going on your merits. And you see that a lot in this industry these days. And I love that and how it's changing and growing, and the diversity of the managers and their teams that we're seeing, and it's really become so inspiring to hear their stories. And I try and help them realize that their stories are inspiring, because, you know, I mean, it's your life. That's all you know, why, you know, people don't just assume something they do, or how they've grown up or where they're at now is inspiring to anybody. But it is when you can listen to it, you know, from an outside perspective. And I know we were you know, talking earlier, and it's, it's not the same industry that I think it was even three or four years ago. It's not the stereotypical Hollywood perception that a fund manager has to be your has to come from, you know, in the echelons of society, and, you know, we've discussed the word pedigree, and, and, and having to meet some sort of standards that really are "who set them" it's like, it's like anything else, you know, who who created the standard or this threshold. If you are educated, if you know what you're doing, if you have common sense, if you have the passion, and the moral and ethical understanding of what you're doing and the, you know, the undertaking that you're now venturing into, who says you have to be from anywhere, any Ivy school, you know, any huge firm. The one thing is, you've got to start at square one. And that's where you see some of the mistakes is trying to jump ahead, you're not ready to start your full fund and accept investors. But they don't know, you know, where to start. And so that's what I try and help them with and move them forward on that. But, you know, even with women, it's even harder to get them to realize their story. You know, talking with the manager, and, you know, hopefully, I didn't repeat this in our first interview, but if I did, here's the story again, where, you know, she, she had called in, and, you know, almost one of the first thing she said was, you know, um, you know, I'll hurry, you know, I want to hurry, I don't want to waste your time. So I'll try to be quick. And I just kind of stopped her and kind of took a step back and laughed a little bit internally, because in three and a half years, I've never had a man, tell me, like, I need to hurry up quick, I'm wasting your time. If anything, men will just push the envelope, as long as they can go until you know, they get all their questions answered. And if I have the time, I'm happy to chat. But no, no point has a man ever questioned their, um, you know, their value in the conversation with me. And, you know, I had to stop her and tell her first off, you even coming across and saying that, you're already defeating yourself, you know, I've never had a man tell me this. The only person's time you're wasting potentially is yours, if you don't take yourself seriously. So, yeah, I mean, there's some really big differences that I think, you know, women, um, you know, managers that, you know, are minorities. They kind of feel like, why, you know, I don't I don't want to, I don't want to ask something I shouldn't, and I don't want to, you know, embarrass myself. I don't want to make her think I feel as out of place as I feel internally. And that's just never the case. You know? Yeah, there's rarely stupid questions I get asked. Yeah. And usually, it's that stupid, I'll tell you. But that doesn't usually happen. I don't expect anybody to know anything about the legal side of things. I just expect them to be open and listen to us when we tell them.

Andres Sandate:

Yeah. Well, you know, these conversations, I always hope are organic. And I always am striving with the show to find interesting people to talk to within the context of our business. And what's fun about having these conversations is what you just described, as I'm listening. Internally, I'm thinking about some of my own experiences in the business, you know, being being somebody that came into the business from the capital markets in the banking world, that was a shift in and of itself. And then, you know, I haven't shared this a lot with people, but just, you know, not being in a position where oftentimes, and we're in a really diverse city of Atlanta, which is beautiful. I mean, we've got wonderful diversity here. But not seeing that often in the business, not seeing those folks that had a similar background. Like I grew up in a really small town in the middle of Kansas. And I talked to people in New York, and they'd be like, never been there. What's that like? And that just, you know, when you when you hear that you're trying to engage and find common ground? It's like, automatically, you're sort of thrown back. Now I'm not. But this was 11 years ago. And then, you know, you talked about identity, and you talked about your own internal feelings about am I qualified? Do I belong in this room? Do I belong on this phone call? Can I ask for this capital? Right? And, you know, I don't want to say it was it's an inferiority complex. I think it's just something that when you come from your own unique experience, and your own unique background, we all come with something. And for me, it was a combination of, you know, just not understanding who all the people were in the room not knowing, you know, where do people go after this event, like to get drinks and all that type of stuff. And it's been a journey. And so one of the things that I wanted to ask you about is is the importance of sponsorship and mentorship and if you are an aspiring manager, like, yes, you, you need to have good providers. But you also, I think, needs to also have like a sounding board. And I really am inspired by the folks in this business who are willing to step up and be that sounding board, that advisor, that advocate for clients, or prospects. And that may cost them the opportunity to, for that firm to become a client, because they gave them advice that led them in another direction. So I want to ask you about that, like, how do aspiring managers that are trying to break in, they clearly need to get good legal advice, and they need to get their offering set up, and they need to get the structure, right, they need to get the right administrator and the right accountant, but then beyond that they want to grow. So what are some of the things that you've seen, you know, successful managers that have really broken out, do in terms of forming that trusted board or those trusted advisors, finding LPs that they can be very candid with and very vulnerable with? What have you seen work?

16:13

You know, I think one of the biggest and best tools that people have for relatively very little is something like LinkedIn. And connecting with, you know, a second connection or a third connection or somebody that you know, of, but don't know, reach out to them. And I think it's that first step. It's that potential rejection, it's that potential looking, desperate or foolish, that prevents people from doing that. But I can't tell you how many wonderful and great mentor-like relationships I've formed from a cold call, you know, a blanket message, just letting them know why I'm reaching out. And, you know, if they had time for a quick chat, and I would say most of the time, they're gonna say yes. I mean, you have to go into it from the place of wanting to learn, wanting to know what those investors look for, how they got where they are, you know, as, LPs in other funds. How larger managers grew, you know, what, what they needed to, to have in their toolbox. And you go into it from the perspective of knowledge growth, and not professional career growth - because everybody can tell, I can smell a skunk 10 miles away of somebody that is reaching out to me because they just want something, and not my personal advice, and not my professional advice. But they're forming this connection, in hopes that, you know, maybe you know, I'll invest money with them or not that I have that type of money to invest, but, but go into it from a different mindset, because things always come back full circle, and I've seen it with managers, I've seen it, you know, with other providers in the industry, where if you go into it from that perspective, and you really try and form and build that relationship, you're going to get something back from it. You know, and it may not be dollar figures, but maybe in two years, guess what, they may introduce you to a huge investor. They may introduce you to somebody extremely beneficial. But don't expect it. And I think that's something that new managers are so eager for is investors and, you know, those introductions and hurrying and giving them your pitch. But start, again, just like fund formation, just start smaller. It doesn't happen overnight. And people, if they go into investment management, thinking that it's you know, instant gratification, then they need to probably switch their path or their mental, you know, ideas of what it is. It takes time. You have to nurture those connections. I would just say network. Go to those events. Look on, you know, the hedge fund association or some of the other places that post industry events. Just go to them and network, you never know.

Andres Sandate:

Right? Yeah. And the hedge fund industry definitely needs more diverse managers. Right. I mean, the the statistics bear that out and our I think, you know, our industry of alternatives there's more, there's definitely more diverse managers when you look at the private markets than you when you look at the public markets, whether it's long only or the hedge strategies. And there's, I don't know, there's probably a lot of different reasons, but the research, like shows that diverse teams and even female led funds have outperformed their peers. And yet, you know, there still is a is a, you know, there's talent out there. There's no doubt about it. And I'm not one that subscribes to this theory that there isn't diverse managers. I think LPs, you know, are working at it. Consultants, you know, work at it, but there just needs to be a lot more of a concerted effort. What I want to ask you about is you you at Capital Fund Law Group see a plethora of different strategies, right. So you guys do a lot of hedge fund formation, you talked about doing a lot of crypto fund formation, and other alternative strategies. I want to ask you, when these managers come in and your background coming out of law enforcement, you can smell a rat, right like you said. But I say that tongue in cheek, I want to ask you, when you see the managers come in, can you almost tell like, what their strategy is based on just how they speak, how they operate? I mean, and I hate to pigeonhole, but I want to look at the positive traits like and say, if you looked at a venture manager, you looked at a crypto manager, if you looked at a hedge manager, you looked at a real estate manager, like, what are some of the things that come to mind, when you hear a real estate manager, okay, we're setting up a call that that firm can maybe take a page from somebody that's running a crypto strategy, or alternatively, if somebody is running like some real esoteric, quantitative hedge fund strategy, maybe this person could be a little stronger in some of these areas, like building a business, you know, like a private equity firm. You know. What, what comes to mind when I throw that sort of construct out there?

Jen Hicks:

I think real estate, you often see very outgoing, very social, and easy to network managers. Usually, they come from, you know, some other sector of the real estate field, whether it's development or investing. And you have to have that personality. And And usually, they're now ready, they want to start, you know, pooled investment vehicle. And so you see, very good understanding of business sense. Yeah. So a lot of times when you see that portion missing, usually with private equity or real estate, they have that experience.

Andres Sandate:

It's relationships.

Jen Hicks:

Yeah. When its crypto, it's very high paced. They're very energetic, they're very intelligent in that area. Which it takes a lot to really wrap your head around the whole digital asset and virtual currency space. Sure. Because it's so fluid. It's not tangible. It's, for most people, just this construct, that's just so hard to get. Yeah. And a lot of them they're very eager to teach or educate or help potential investors invest smartly, and understand what they're investing in. And, and I hear that over and over. And I think there's really a genuine desire not only to, obviously, you know, make money, but help LPs from potentially investing in digital assets and not knowing what the heck you're doing. And then it's gone. You know, you put your stuff on an exchange and it could be gone the next day, if you aren't, if you aren't careful. And, you know, hedge funds. It's a variety. Yeah. You know, I think that's kind of the the broadest area where, again, I don't see as much business experience. Um, usually they're spinning out from a larger firm. Usually, they have you know, a partner that is brilliant and, you know, the tech side, and the analyst side and really developing the strategy and whatever type they're doing, um, and then you have, you know, the other manager that has that investment management experience, to really start growing their team and and bringing on somebody that can deal with the day to day. So I think you see such a variety that with real estate, I think they could probably grow a little more in the tech side, and, you know, the developing digital space, not necessarily assets, but just all of the tools that they have at their disposal. Yeah. And, you know, on the on the crypto side, they could probably take a page from a real estate manager on the getting out networking sense, and really, how to sell yourself as a business. Um, everybody knows, you know, real estate, people are, that's what they do, you know, they have to sell themselves because they've got to sell houses, they've got to sell, you know, commercial real estate and right, so they're very good at it.

Andres Sandate:

Yeah, the tangible versus the intangible. And that's one of the things about alternative investing and alternative assets that I'm hoping to continue to drill in this podcast is the sort of demystifying because I have this conversation regularly. And I'm proud, you know, that I'm in a business where there's always this innovation. But I also readily admit, like, I'm not an expert in digital assets, and crypto, and I'm gonna dedicate time through this podcast to trying to find folks who can bring it down to a very basic elementary level and are better probably at coaching, and educating and fundamental blocking and tackling explanations, than, you know, then maybe at the, I would say, the quantitative side, or the analytical side, because they probably have that skill set as well. But I just don't see strategies, particularly with emerging managers, like really getting a lot of runway without having the former, you know, being able to really sit down and explain to an investor how our strategy works, because it is such a, you know, that's the term we always used, you know, 10 years ago was a black box. You know, and it's like a trading strategy. And I can't tell you how the algorithms written, that's our IP. And, you know, now investors are demanding to understand it, and they won't invest if they don't understand it.

Jen Hicks:

Right. And it's so helpful to have those around that can't explain it on the basic level, you know, and it's not a question of anybody's intelligence, but I'm like, talk to me as if I know nothing at all. Yeah, and I've never heard of this ever, and break it down. Because that's really what you need to be able to do. It is such a fluid space. And so yeah, hopefully, you know, tuning into that, have somebody breaking it down. Yeah. The partners high level, and I'm like, what, like, typing into, you know, Webster's dictionary, like, what is this me? What is that word? What

Andres Sandate:

is this? Well, thanks. Yeah, things are definitely changing pretty rapidly. And I would expect that whether it's crypto and blockchain and digital assets is, you know, going to be as popular in the next three to five years, as it has been over the last couple. You know, there's, there's one thing that's clear is that there's going to be more regulation, there's going to be more oversight, that's going to probably make you guys at Capital Fund Law Group and other, you know, law firms and compliance firms that need to help managers interpret what all this means, you know, status, trouble, run, you know, a stand up shop. And, you know, you talked about that, that there are different decisions that you have to make when you're setting up your firm as to where you decide to domicile. Some of those choices I mean, I I assume that's where like the difference in the rubber hits the road in terms of picking law firms, because every law firm is going to have a different approach, I would imagine, right?

Jen Hicks:

Well, hopefully not too different in terms of, you know, the the investment advisory and federal and state level regulations, although unfortunately, I have seen differences. I mean, it's a pretty standard set of guidelines that they need to follow. And unfortunately, sometimes I hear "Why are you the first person telling me this? I don't know."

Andres Sandate:

Is the model still to set up in Cayman if you need an offshore fund and like set up in Delaware if you have an LLC. Is that sort of still the the traditional model.

Jen Hicks:

I mean, typically limited partnerships that are domestic are Delaware um you know. It's just been the historic and most common. There's the most case president there's the most um, you know, historic law set there. And so that's typically where those get formed. Offshore, I would say, you know, Cayman, may to some degree be considered still maybe the golden standard of offshore. But I think BVI is nipping at its heels, and has a more variety of more variety of types of funds. And the allowances for those, it has, I would say, equally good reputation as Cayman. And sometimes it really just comes down to investor preference. If you have an investor group that feels more comfortable with Cayman, that's what they've always been familiar with. And that's maybe something to consider. Otherwise, I would say, you should consider BVI or Cayman, you know, Singapore VCCs just came out a year ago. They're new. They're still evolving in terms of, you know, guidelines and restrictions, and they're not necessarily as crypto friendly because of that. They still need to figure out really how to evaluate that type of of a fund. But that's a new one. Not as common, but yeah, and in terms of the managers, I mean, you just got to go off of, if you're under the investment advisory guidelines, you have to go off of where that place of business is and where those operations are coming from. You can't set it up in Florida, because Florida is, you know, full exemption for hedge funds and be living in in California and talking to investors in California and providing advice in California and managing the strategy. Because California is not going to be happy.

Andres Sandate:

Right? Right? Yes. There are some you should. Yeah, there's some decisions around where you physically are based and where you're where your operations are. I want to switch a little bit of gears before we wrap, I want to ask you about the fundraising environment and what managers can do to help themselves. We talked about getting out there networking, being willing to be uncomfortable, but I want to ask you more practically, there's been a plethora of news around, you know, the the rise of equity crowdfunding, you know. I don't know if it's applicable to your business and your clientele, or if this is more applicable to what I'm seeing, like in the venture space, but there has definitely been more of a fractionalization of private investment opportunities through platforms like Republic and, and Slice and some of these others. When a manager comes to you, and you set them up, and they're ready to go outside, the friends and family start raising assets. What are you seeing managers trying? conferences have largely been shut down? They're gonna start, hopefully, returning maybe early next year, there's been a lot of virtual cap intro. But what are you seeing or hearing anecdotally, from managers as they look to, you know, partner with LPs and grow?

Jen Hicks:

Yeah. Well, and I think sometimes, it's an extra layer of difficulty, depending on where that manager is, and there regulations they have to abide by. Because oftentimes, their friends and family may not meet the investor standard, that they're required, you know, such as a qualified client or the accredited investor. And so then they have to figure out a whole new approach. You know, one thing I think that sometimes gets overlooked is the benefits of brand management, thought leadership, and being able to be interviewed, potentially, write content, not about the fund, not about the offering, not about how the management companies associated with the offering, but if you're speaking, you know, as the manager of a fund on, you know, a certain trending topic or news discussion, and somebody sees that, they're going to be interested. You know, if you obviously have something to say that added to the conversation, they're going to follow up with you and they they're going to want a discussion and learn more about what you are and what you're doing. And so I think that looking at those options, you know, there's some great public relations and prestige content type of providers. They know press. They know media. They know what to do. They know securities regulations and and how you have to word things. But, you know, one of our clients speaking on podcasts and, you know, has content put out there and gas gained significant traction because of that. And he's done it in a compliant way. And so I think that's, like a area that sometimes managers don't even think about, necessarily. You know, having podcasts and discussions, yes, it can be done, you just have to be careful. And in terms of of introductions, in terms of discussions with investors that are going on, it has been difficult, and a lot of the time, you have to have a starting point. Looking at a seed investor willing to, you know, put in working capital for a percentage of equity or reaching out and getting a board of advisors together that may have a potential investor network. And another is a lot of states have, um, you know, like, the Texas Teachers Association or pension. I know, I want to say it Chicago or Illinois, I know California has one, but a lot of these huge funds have like designated money put aside to allocate towards a) emerging managers, and b) even more importantly, diverse, emerging managers. And so you can look into those, you know, just look up, you know, your state's teachers pension fund and and see what they do. I know, most of them have like PDFs because they, you know, report on it, and they show what they allocate to new funds. Yep. That's, I mean, there's no harm in looking there's no harm in and exploring the one thing I will say in your internet search, is, if it looks too good to be true, it is. There's no unicorn list of investors contact information out there, you're gonna pay ten grand, for nothing. It's just, it's, there's there's providers that do that, that are very reputable. But if somebody is like, offering you a list, for a large sum of money, run, right. Right. Not gonna happen.

Andres Sandate:

Yeah, yeah, I want to add to what you were talking about in terms of the emerging managers, and in probably it's a separate podcast show, but to talk about the fundraising environment, because I think a lot of managers, you know, think there's a silver bullet to raising capital. You know, it's like, I've got to have the right prime broker, or I've got to have the right law firm, or I've got to have the right marketer in house. And the answer, in my opinion, is, is probably all of the above. And sometimes it's, it's a couple of things. Having the right outside representation can accelerate you. But you know, finding good representation is not easy. You know, it's also not inexpensive. Having prime brokers can be helpful, but prime brokers have businesses too. So, you know, understanding why they're there and what they're looking for on the front end, if you're a trading strategy, if you're a private equity or real estate strategy, prime brokers probably irrelevant, right? So it's really, I think having good advisors. I think it comes back to like aligning yourself early with, like you said, the board of advisors, talking to your peers, reaching out on LinkedIn, and finding, you know, folks like yourself and others in the industry who will like spend an hour with you - probably ask you a lot of questions, but stimulate a lot of thinking. Because if you were sitting in a chair at a bigger firm, and didn't have to wrestle with all these choices, and then you're suddenly going to just go you know, hang a shingle, launch a fund and think like the dollars are gonna come in. There's some like rude awakening for you and like your super cool crypto strategy.

Jen Hicks:

Right. That's why we have you know, for private equity or real estate, you know, those closed down vehicles that really hard to show any type of previous performance, that can be relevantly put into fund materials without prior fund experience, you know. So we do our pre launch services to try and help them out where we formed their management company and create a memorandum of disclosure, which, you know, is as a compliant and truncated type of PPM that they can provide that accompanies a legally reviewed marketing deck that will give investors more information in a way that isn't going to violate those federal and state laws on what you can and can't say when marketing without your offering documents. And so it's a non-binding agreement, but it's at a fraction of a full fund cost. So that they can start. They have their firm. They have their memorandum. They have their marketing deck. And it's a way to garner soft commitments. To reach out and get put feelers out to see, okay, is this practical? Can I reach that target AUM that I need within that capital raising window to successfully operate my fund. If you go out and you have amazing feedback, or constructive feedback from potential investors on what they do or don't want in terms or you know what you're investing in, then you can say, Okay, I think this is a worthy investment, I'm going to finish my formation and launch the fund to accept and go out and formally capital raise. And so like we were discussing prior with, with investors, it's, there are smaller steps before you hire, you know, all of the good necessary providers for your full funds. What is your capital raising strategy? Yeah. You know. Right. You can ask a manager that. And if they're, they're very new, and it's their first time. It will probably be quiet for a minute. Yeah, I think of what to say? Because it's just not. Yeah. I mean, they know their strategy strategy, but you have to have a capital raising strategy and know how to go about it. So that it can actually be accomplished.

Andres Sandate:

Yeah. So we'll summarize for all the managers that are going to listen to this podcast, if you're a hedge fund manager, learn what an incubator fund is. If your adventure manager learn what an SPV, or a syndicate is. If you're a real estate fund, or want to do some type of real estate, like investing, you know, learn what a GP fund or a GP co- investment fund looks like. If you're a private equity manager, you know, learn what a search fund is, or a fundless sponsor type of model looks like. And that, that might be super elementary to a lot of the folks that have been in the business. But I'm always surprised when I go to events and I meet people know, like, yeah, "we're launching a credit strategy or launching a crypto fund. And I'm like, oh, what, what, what firm? Did you guys spin out of? Or what? You know, what's the team's background? It's like, Oh, we all just graduated from college. Wow, you know, that's impressive. Like, I wish I would have done that at, you know, 22 or 23, I was trying to pay bills. But, you know, I think that there's a lot of institutional memory, and knowledge, and relationships and expertise that can be shared and leveraged. And hopefully, you know, this podcast and other tools out there other podcasts or, you know, are a resource where this next generation is up and coming generation of folks will turn, frankly, just save a lot of time, accelerate growth, get the launches, you know, set up in a way in which they're gonna attract the LPs attention for the right reasons, you know, the LPs will look at them and say, well, that that's a logical, smart way to go about it. Right. Now, let's talk about the assets that you're, you know, investing in, or the deal flow, which is the fun stuff.

Jen Hicks:

Well, and I think that hopefully, you know, your audience has listened and shares your other podcasts you've done. And, of course, my mind went blank is it Eric, that was on. Yeah, previous. Yeah. I mean, I think he gave some great advice. I think he great, you know, gave some quality information, same as yourself from his perspective, you know. If you have these, you know, managers and investors and allocators and people from the industry that are talking about what they're seeing, I think this is the best platform for an emerging manager to listen to, because they're hearing it from you know, the horse's mouth on what they do and don't want what they have and haven't done, what does and doesn't work. So right. On, so I think it'll, I think it is a great.

Andres Sandate:

Well, hopefully, I'll get yeah, hopefully, I'll get, you know, hopefully, I'll get to, you know, my goal with the platform was to get to a point where I would start, you know, developing an audience that was associating the show with, you know, there's lots of great podcasts out there where, you know, the interview is with somebody that's sitting atop an empire, right of hundreds of billions of dollars of capital. And I listened to those, or 10s of millions or hundreds of millions of dollars of capital. And I learn something from listening to those visionaries and those leaders and those titans. But I also found that for a lot of us, you know, that are in the business, and we're serving a vast client base, the other 85 or 90%, there, there's a lot that can be learned from stories that can be shared amongst, you know, that, that that group. And so that was, and also just to bring more people into the business, right, bring a new perspective, a new voice, a different look, people that came from different industries and said, hey, I want to be in this industry. I don't know if I fit. I don't know, if I belong. You know, it seems like it's a it's a, it's a different vibe. So I was trying to, you know, demystify through all of that, and hopefully.

Jen Hicks:

Make it relatable and make it. Yeah. You know, people can relate to something they can learn from it and connect with it and explore. You know, it is hard to listen to some of these, you know, that are, you know, have these huge empires and, and, you know, you look at some of the managers are like, well, cool, I don't have, you know, a trust fund to start this empire, I don't have, you know, a million dollars, somebody is just going to give me to get my venture going. And it's sometimes almost, you know, a letdown listening to those because you're like, well, neat. Yeah, but I want to hear from somebody that had nothing, and how they got there, and all the mistakes they made. That's what I like hearing is, tell me all the mistakes you made, ight,

Jen Hicks:

The things you learn the ones I've made and be like. we've all had again, yeah. Right.

Andres Sandate:

And we Yeah, we've had our share, right, you run into you run into those, what you think is a, a path, and sometimes it turns into a wall and you grow from it. The thing I wanted to finish with is, you know, the folks that I've most enjoyed interviewing and most enjoyed talking to, they have inspiring stories, and they have some system that makes them, you know, be able to do more, right? In the sense of they, they serve clients. They're investing capital, they're making returns for clients. They also have this whole other side, right, they might have family, they've got all these interest, these hobbies. And that's a part of this too. And so I want to shift gears and ask you as we wrap up, like, you live in Salt Lake City. Ot's a beautiful state. There's lots going on in Northern Utah, you talked about the the startup community, the you know, all the, all the things there are to do outdoors. What are the, what are the things that you know, after working hours, you just allow yourself to kind of get out and enjoy that recharge you and kind of get you back in a good mental space to do this work?

Jen Hicks:

Ah, yeah. I mean, you know, me and my son typically love going hiking. There's never a shortage. I have two large dogs. That one loves to go and the other is a great dane and is done after about 10 minutes. He's like, I'll just wait here. The other ones like see ya. So it's a crazy house. Um, during the lockdowns and the pandemic, I very poorly picked up painting and pottery. Wow. Just to try and use that as an outlet. You know, I suffered a loss with my former husband that passed away last year. And it just kind of helped me silence my mind a little bit, you know, and focus on this task at hand. And so I think, you know, I love learning new things, and trying new things. I'm terrible at it. But I really think I could make it big if I made all this stuff and then like, tried to sell it and say my kid made it because then people be like, Oh, yeah, yeah, yeah, for sure. Yeah. Oh, he made it. Yeah, me. Yeah. Yeah. That's embarrassing.

Andres Sandate:

Well, there are yeah, there definitely are people out there though that are looking for like more that handmade - they want to they want to buy it because there's a story behind it right? Not because it might be the best thing. So yeah, watch out to a Pottery Barn store near you.

Jen Hicks:

I know it's gonna be in stores everywhere, just got to find that investor, right, got my advice to you.

Andres Sandate:

We can, we can help you with that. So and then lastly, like, if you look at our business, we've talked a lot about best practices and the things to do and the things to avoid. The things not to do. So hopefully, we're learning as we go through this journey. And you look ahead in our industry, what gets you excited?

Jen Hicks:

I would say, the innovative and refreshing ideas that I hear from managers. The passion behind them. The drive and desire to do good. To help others to make a change. There's so many managers that are focusing their efforts on, on wanting to be a part of the better cause whatever that may be. You know, there's so many managers that are really taking note of low income areas, and, you know, areas that have, you know, low, you know, poverty in it, and, and seeing, okay, if it's real estate, I can take, you know, this property, and I can create 1000 new jobs, you know, by building this development and helping this community and I want somebody from the city on, you know, my advisory board that really gets it. And I've heard so many great things. And so I think that when I look at the future of this industry, we're going to see really positive things. I think that the stigma that unfortunately, and self inflicted in this area has surrounded investment funds and hedge funds of you know, that sketchy and, and, and, and fraudulent. These, these new managers are really making an effort to change that. And there's many managers, I mean, I the majority, obviously, they're doing what they need to, but there's a new group that are doing an extra step. Yeah. And I love that. They're making that effort to not have it be hedged funds are only for certain people or if you invest in a hedge fund, you're going to get scammed because they want to do it the right way. Right. They want to help.

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About the Podcast

ATLalts
Alternative investments
ATLalts is a podcast for those interested in learning about alternative investments and alternative asset classes through interviews with investors, asset owners, and industry practitioners. ATLalts explores venture capital, private equity, real estate, credit, private debt, distressed, hedge funds, commodities, FX, currencies, infrastructure, structured products, digital assets, multi-alternatives, secondaries, collectibles, farmland, timberland, and more specialized alternative assets such as life settlements, aircraft leasing, royalties, litigation funding, and marine finance.
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About your host

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Andres Sandate

Andres Sandate is the creator and host of ATLalts. Andres has extensive knowledge of alternative investments with professional experience working in asset management, capital markets, securities, and investment banking. He has held senior leadership roles working at several hedge funds, private equity real estate firms, multi-asset alternative investment firms, and placement agents. Andres currently serves on the Board of Directors of the Southeastern Alternative Funds Association (SEAFA), is the President and CEO of the King Springs Elementary School Foundation, is the past President of the Atlanta Chapter of ALPFA, and is a lifetime member of the National INROADS Alumni Association (NIAA). Andres earned an MBA and a B.S. from The University of Kansas and is a native Kansan. Andres is married and has three children and resides in the Atlanta area. Email andres@atlalts.com