Investing Billions - E414: How LPs Evaluate GPs in the AI Era

Episode Date: August 10, 2026

For decades, fundraising was driven by relationships. Today, it increasingly starts with AI. David sits down with Lex Suvanto, Global CEO of Edelman Smithfield, to discuss how artificial intelligence is changing fundraising, why reputation is becoming one of the most valuable assets for investment firms, how GPs can differentiate themselves in an increasingly crowded market, and why authentic thought leadership may become the biggest competitive advantage in private markets.

These models are changing every week, but today, what are those data sources that you see come up over and over as LPs, diligence, GPs on AI? Incredibly, when digital platforms really started to accelerate, I think people started to assume that media might become less important. All of a sudden, we are in the golden age of media because LLM's number one source of information, if anybody's, searched an LLM recently, you will see the information is tagged to media sources. So media is the number one source of information. But if you think about it, why? It's because it's third-party verified. Those media sources are not being paid to generate that content. So it's authoritative. It's third-party validated. It's not sponsored. So it kind of makes sense. Edelman also does a lot of research on trust.

Recently, Edelman put out a separate survey on brand trust. What makes people believe and trust specific brands? By far, the biggest, the number one source is media. Again, because they're not being paid. It's not a sponsored source. After that, pretty far down in terms of the numerics, was the company itself and what the company is saying about its own reputation. Is this old media in terms of New York Times and CNN and all these online kind of highly reputable old media sources?

Or is it new media like newsletters, podcasts, X feats? It's funny you use the term old media versus new media. I would come back at you and ask you which of those sources is your first access in the morning. Some of the conventional or highly established, the biggest media, I would call it, New York Times, Wall Street Journal, etc., these are highly trusted sources. These brands are by far more trusted by general population and by the institutional LP and private capital ecosystem. So I don't really think about them as old or new. There's no question that LLMs are pulling from. from all publicly accessible. And there's also no question that LLMs are prioritizing the sources that it believes has higher levels of authority. And how do you judge authority? Of course, connectivity, the presence, prominence.

So that old media, those big brands, they are without question, more prominent, viewed as more trusted. Those will be out there. At the same time, trade media, at the same time, digital media. All of this is publicly available information. All of it is accessible. I actually think that trade media is a little bit underrated. A lot of companies, a lot of executives, a lot of investors. They're thinking Bloomberg. They're thinking CNBC. But trade publications are also accessible, discoverable by not only these models, but by everyone else. I think that's a fertile ground for companies to access. At Alderman Smithfield, you advise many

of the world's leading GPs. What's your advice to them in terms of building a brand? We work with a lot of GPs. I think we work with over a hundred GPs of different shapes and sizes around the world. So we have a lot of experience. Some are small, just getting started.

Some are massive, among the biggest, and they have giant communications, teams and programs, etc. It starts with what's the message? What do you want to convey? Is it differentiated? And going through that process of how do you make sure that you have something distinctive to say, which LLMs also care about? That takes work.

That takes a lot of thought. That takes genuine effort. Once you have those messages in place, then starting to think about where are you going to put it? Traditionally, GPs are thinking about, let's get a website up. Might be pretty basic. It's remarkable. I've looked at a few websites recently for very established, very successful GPs, and they are not good. So you've got a lot of GPs out there that have work to do even at the foundational level.

When you start to get more advanced, you're sitting here with you in this podcast, a little more multimedia. Or you're starting to think about the reputation of your CEO on LinkedIn or engaging in even other platforms, starting to get creative, starting to be creative, starting to, to get a little more authentic, because the truth is, on newer platforms like you were referencing, the more authentic, the more personable, the more creative you are, the more engaging it's going to be rather than just your conventional old talking head. So there's a lot of room, and it's a long journey for GPs to go through. We were talking before we started recording how Alex Karp is just this master on social media on podcasts. And he almost never talks about Palantir.

This was a point made by Mark Andreessen. He's talking about American exceptionalism, engineering excellence. And in spite of that, so many people become fans of Palantir because they have that association. Talk to me about that. Probably example number one of what thought leadership is. And this is a challenge and opportunity for all leaders, whether you're at, at an LP or a GP or a company. CEOs know they need to get out there.

CEOs know they need to be talking about the company. I think we all have a limited amount of attention for hearing promotional messages about what a company does. But if you're listening to Alex Carp and he's talking about the latest issue, the relationship between companies and the LLMs that they partner with, I'm listening. I'm interested.

So that thought leadership is, a way to attract attention. It broadens the audience outside of just your customers and your business partners. It's absolutely a way to make your presence and your message more appealing to a broader audience. Almost reminds me of consultative selling versus old school selling, which is you're actually helping somebody solve a problem. And by solving that problem, you're building your relationship, or your reputation with that person that gives you the ability to sell to them. The impression you're left in the case of this thought leader, Alex Karp, is that he's incredibly smart. He's incredibly plugged in. You're also left with the impression that he cares about the quality of his products

and services, and he cares about the experience and value that his customers are receiving because he's trying to solve a bigger, let's call it, industry macro problem. So it's not just the message that you're hearing. It's the impression that you're left from listening to a thought leader like that. When I think about general partners, I actually go back to a behavioral psychologist, B.F. Skinner, who popularized this concept of operant conditioning, which means that if you're in some ways like Pavlov's dogs, but for human, if you're conditioned to act a certain way over time, you'll start to be closer and closer to this way. And GPs for so many decades, really since the inception of the private markets, have been conditioned to say the least controversial thing, the least objection.

thing to essentially be completely almost like a politician running for president, seem like your message is focused for everybody, take no stands. And yet today there's this paradox where you have to be differentiated. How do you teach GPs to overcome this legacy industry practice of just not really standing for anything? It wasn't too long ago, let's say 10, 15 years ago, a lot of private equity firms, venture capital firms question why would I ever want to engage? with media. It's just risk. I don't need it. Even today, we meet with some private equity executives at established firms or middle market or smaller, newer private equity firms, and they are risk-averse. They don't necessarily believe in the value. Those firms that are

more successful in building their brands, those firms that have started to expand their asset class portfolio, those firms that are expanding the audiences that they are trying to reach, for example, the wealth audience, have recognized the power, the necessity of the brand. And in order to reach those broader audiences, your message needs to be more accessible, friendlier, simpler, your website, even your branding, even the way your logo shows up. Then you start getting into product design and product description, never mind the education about the products that you're putting out there. Then you get into video, social media, and even advertising.

Some of this video content is starting to get a lot of fun. A few firms out there are starting to play with the leadership engagement on social media platforms. And it gets talked about instantly. You don't have to try very hard, actually, if you're willing to be creative to really generate some buzz. If you can do that successfully without saying the wrong thing, which is you have to be careful about or without stepping in the wrong direction, you can generate a lot of positive buzz and you can get a lot of mileage from it. One way that I think about it is there actually is risk in doing new media. There is risk in putting yourself out there. There is risk on being on X.

and yet it's almost become that a lot of firms are default debt if they want to grow. They have to take this risk. It reminds me of Professor Steve Kaplan, University of Chicago. I had him previously on the podcast, and he said at University of Chicago, he used to have private equity managers come in and pitch their funds and talk about their funds to students. And in the 90s, he used to ask them this question of, what is your differentiation? And most of them kind of looked at him almost with this blank look in their face. And I said, we don't do that. We don't do this differentiation thing.

Why? Because at that point, there was a couple dozen of these private equity firms, and there were so many companies. You didn't need to be differentiated. Differentiation is harder and harder. It's a more crowded field. We know this. Fundraising is getting tougher.

The truth is all of these firms at the core are doing the same thing. We know this. They're buying assets. They're buying companies. They're trying to make them more valuable. And then they're selling them. So we work with a lot of GP leaders, asset management leaders, to help them figure out what is their differentiated message. Of course, there's always a sector focus, tech, health care, or there might be a geographic focus.

But even, or there might be, I'm the biggest, or I'm the most boutique white glove version. But even within that, when you spend the time with these leaders and you do one-on-one conversations, and you really try to tease out what's their unique approach. You always find something that you can work with. Number one, it might be something about the way they maintain the relationships with their investors. It might be something about the attention they apply to the value creation methodology with their assets. But then beyond that, there's another layer that I really find satisfying as a professional involved in message development. ultimately you get to a level of asking these leaders, what is it they want to declare?

What is it they want to commit to? How do they want to show up to their community, to their customers, to their partners? It's not necessarily something that's fact today, but it's something that means something to them. It's a philosophical commitment that they want to make. When you can get to that level, in addition to the hardcore, differentiators and then the differentiation in their approach. But if you can really uncover what is it that they believe in and the commitments they want to make to their customers on a personal and team level, that's when you're starting to crack the differentiation nut, in my opinion. But that takes work.

Best bluff is no bluff. If you truly want to be differentiated, you have to have something you stand against or a strategy that you're against and something that you're for. You can't just be waffly in reality and go out with this super differentiated outlook. AI is going to reward companies with substance. AI is going to reward companies that have depth of presence across a variety of communications platforms. The more substance you have, the more credibility you're going to have with media, the more traction you're going to get with your messaging, and the more AI is going to recognize

you as an authoritative source and put you forward. over others. I want to go back to something you said because it's so underrated, which is each one of these firms actually has a differentiator. And the reason you know that is if you have good returns and you're growing, you're doing something right. And your job and the job of every GP for themselves is to figure out how do I best articulate this edge that we have in a way that could be shared with a mass audience

that's intuitive and that's simple to grasp. Again, we encourage GPs. Of course, it starts with the message. You really need to land that differentiation. But then what are the ways that you're going to, that will allow you to express that differentiation, that message in an authentic, genuine way? There's a lot of options from websites to LinkedIn, to video, to new media, to LLMs, etc. Not everything is right for everybody. There are firms out there where it makes sense for them. They're going all out. They want to market to a broad audience. They have lots of products in their portfolio. They want to reach wealth. So they're checking every box. There are other GPs out there that want to take a different approach. They want the exclusivity.

They want the prestige element of their brand. So intentionally, they don't want to appear everywhere. They don't want to be noticed by everyone because there's more of an exclusivity play. That's a marketing strategy. Completely reasonable approach. Those companies have to think about marketing more as precision engineering, precision targeting. And for those places where they do show up, they need to be even more meticulous about what's that message going to be, what's the outcome going to be? Because they're dealing with a smaller number of hits.

So each one of those hits is going to have higher value. So it's going to take more work, more intention. Everyone I talked to on the show is chasing the same thing, an edge. and more and more the edge comes down to your information, not just having it, but being able to trust it when the stakes are highest. AI is doing more of the information gathering for you every day, and most tools are very good at sounding right. The summary reads clean, but can you trace it back to the filing, the transcript, the specific

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exactly what that is. The edge goes to whoever could trust information and prove it. See it for yourself. Start your free trial at alpha dash sense.com slash how I invest. That's alpha dash sense.com how I invest. A lot of this comes down to availability bias in that people don't realize how few GPs are able to differentiate themselves because the ones that differentiate themselves get into all the media. You think of like KOTU, Andrieson Horowitz, Sequoia. They have such strong thought leadership. and they dominate the airwaves or the video waves.

And because of that, a lot of GPs don't realize how few truly differentiated GPs there are because those are the people that aren't actually getting access to media. For those firms that aren't the biggest, they need to be more creative. There are ways to punch through. There are creative executions of a message. There's a couple of interesting aspects to this.

years ago in a prior life, I worked in the advertising business. Advertising is a form of communications. It's much more aspirational. On the one hand of advertising, you have the strategic planner that figures out what is the unique customer insight that we are trying to reach. On the other hand, the account person in advertising is trying to figure out what is that simple idea from which the creative execution is going to develop. So an account person develops a brief. And all that really matters in that brief other than a lot of background is the simple idea. The best simple ideas are not even a sentence.

There are a few words, but it's a clear and crisp idea that you want your marketing to build on. That's the kind of thing that empowers the best creative teams to create the best commercials that you can think of. a simple idea. So when you're a GP that may not be the biggest or the oldest, you need to come up with creative ideas, with creative executions based on a clear, memorable idea that can break through. There's a lot of ways that happens. In the context of wealth marketing now, you see some of these GPs starting to use sports marketing as a creative, differentiated way to reach the audience. You'll see sponsorships for a U.S. Open Tennis Tournament.

You see sponsorships for even pickleball leagues. One of the GPs that we work with, they've decided that pickleball is a relevant activity for both from an audience spectator point of view as well as participatory. So they decided to become a title sponsor for a pickleball league, which is talk about a creative execution that is tailoring. to the audience. For those that don't have a budget to do PGA tour or maybe even pickleball, what are some practices where smaller GP firms with smaller budgets could break through the noise?

Let's talk about media for a second. Media doesn't really cost much. You need to figure out who are the reporters that are relevant. You need to figure out when you have something meaningful to say. That could include a podcast, for example, when you've got a real story to tell about the business that you're building. It's an activity that requires planning. It requires being thoughtful. It requires being genuine about the message that you're conveying. And it also requires relationships. So as a starting point on the media front, I'd recommend that GPs think about who are the reporters that are in their universe

that might one day be relevant to what they have to say and think about how to build relationships with them. So that when the time comes, when you have an announcement, you have news, you have thought leadership, that reporter knows who you are and is interested in having a conversation with you. What are the best ways to develop these relationships? First of all, relevance, credibility, but some people think they know what topics are relevant to certain reporters without even having read what those reporters write about. early in my career, I made that mistake. I made that mistake once and never again because it's obvious. Read what these reporters are writing about. If you become informed on what matters to them,

then you'll be able to talk with them in a way that's relevant. In addition, to be credible about the information that you're providing, you're not there to make a sale. You're there to talk about a social. substantive, topical issue. It's not about making a sale. It's about talking about real updates, real business, real information. So those are a few steps. Always ask the same question to everybody that I meet, which is how can I be helpful? It's the most simple questions, very few people ask, and everybody has some way that somebody

could be helpful. Adding onto that, back to the thought leadership topic, reporters love to learn. Reporters want to know what's happening in the industry. Reporters love ideas. No one likes to be sold to, especially reporters. So if they feel like it's a sale, if it's a pitch, a promotional pitch for a company, they're going to be skeptical out of the gate. If your relationship, at least at times, but maybe even to start, is about what's happening in the industry, what are you seeing from your perspective? They're interested. Their ears will be wide open to trend. from your point of view because they're trying to understand. If you've picked the relevant reporter, they're focused on your industry, they want to know what you're seeing from an industry player

point of view. We're talking about some of these memes that spread through the financial market. The first one I think about is Thomas LaFont just had this slide about companies going from $100 billion to trillion more often than from $10 billion to $100 going more often than $1 to $10 billion. is just this memorable thing. For whatever reason, I always think about it. Maybe you could break down on what makes an effective meme in the financial market. That is a deep question. We see that on the upside, as we're seeing in the examples you mentioned, we also see it on the downside with regard to redemption levels, for example, with some evergreen products.

I think the ingredient, you ask what makes for it. So in the case of the downside, the audience that these GPs are now marketing to, more high net worth, more retail oriented, if you could loosely call it that, they're sensitive to headlines. Also, they're not educated about redemption gates, nav calculations, etc. So they're much more fickle to what's happening in the industry. One of the fascinating facts about this whole redemption cycle on private credit is that the funds themselves continue to perform well. They're stable, if not good. The redemption cycle was sparked by headlines about Saspocalypse. Some of these firms, yes, there's some exposure to software.

But the funds continue to perform. The redemption cycles are up because of the headlines, because of certain intermediaries and wirehouses talking about rebalancing, and because broader investor bases are very sensitive to headlines. And then even deeper than that, which is even more interesting, is you have to look at the nuances between geographies. It's not necessarily a global reaction to some of these redempties. redemption cycles that have occurred. It wasn't necessarily the U.S. wealth audience that reacted. It was, let's say, the wealth audience in Asia. And this really speaks to the need for GPs to understand the audiences that they are communicating to in those nuances. So what creates a meme stock on the upside? I wish I knew because then we can invest in the next game stop.

So it seems like fear is an important driver to why some memes spread. What are some other basic factors? Education. The more someone knows, the better educated in RIA is to how the redemption cycle, what this liquidity, a liquidity premium really is about, the better able they're going to advise their clients, their end investors when the investor calls in and says, I don't know, I'm reading these headlines. I'm kind of worried about private credit. So that education is a insulator or a support net for these GPs. One of the surprising things from your research found that LPs valued reputation among GPs even more than returns.

Tell me about that. I don't know how recently you've been online to comb through investment options that you might have with one of your mutual fund providers. You're combing through that list of possible mutual funds or ETFs or other products. First thing you're reading is what are they focused on? Next thing you're reading, of course, is returns. But what we're finding, especially for institutional LPs, and this also matters for our RIAs and the bigger wealth audience, is that the reputation of the CEO matters. And that makes sense. The CEO defines a strategy.

The CEO personifies the brand. The CEO is setting vision. And increasingly, CEOs can end up in hot water and create serious damage for brand reputation for companies. So it only makes sense that people are going to be focused on CEO reputation when they're evaluating whether or not both LPs and broader wealth audience. and reputation itself, how longstanding, how trustworthy are they? What's their culture like? Culture, even on some of your previous podcasts, investors have said, is an indicator of what kind of company that they are working with and what they're focused on, what their

priorities are. All of this wraps up into the reputation of the firm. You could think of returns as backwards-looking and things like culture and reputation as forward-looking indicator. Same goes for trust. Returns are backward looking, trends may change, who knows what's going to happen macroeconomically, who knows what's going to happen with inflation. Trust and reputation, but trust in particular is more forward-looking.

How much do I think I can rely on you? What kind of integrity do I see in you? How much do I believe that you're going to be able to deliver on the commitments that you're making? So building that trust, and trust is multi-dimensional. To some extent, reputation is also backward-looking like returns. But if you trust in a GP, that means you're willing to put money to work for the future. That means that you have expectations about what they will be able to deliver for the future. Creating a framework for how to build trust with your audiences, that's what Edelman certainly is all about.

That's what our whole industry is all about. But that takes a lot of work on messaging, on platforms, on engagement, on authenticity, on consistency, on dependability. It's a multi-dimensional equation that firms need to figure out. Going back to what we talked about before, which is figuring out your true differentiation in the marketplace. What's the process for figuring that out for GP? First thing is really thinking factually about how. How are you different from others? So let's call it benchmarking.

That's an easy first step. Also, we find it as a good catalyst, a good thought starter, to put in front of GPs what their peers are doing, what their peers are saying. Sometimes we bring them into a room and cover the walls with what everyone else is saying. Then you can get them to start thinking and reacting a little bit. Wait a minute, I like this, I don't like that.

We're different than this. We're deeper than that. So that's part of the process is really provocative thought starters with them to help them explain how they're different. Then you go one click deeper to talk about their philosophy, their process. How do they work with investors differently? How do they build value differently? Again, you're going to start hearing some of the same stuff. Then you go a second click deeper, which is, what do they believe in for the future of the company?

How do they want their clients to feel? What do they want their clients to experience and understand in the future when there's success, a successful partnership? Pull all that stuff together. Then you add the final layer, which is, can you back it up? Is there substance? Are there proof points? Is there evidence? AI, for example, is going to reward firms that are not only consistent and distinctive, but there's proof, there's substance. It goes deeper. So the firms that have substance behind what they are saying are going to be the winners as AI becomes a more prevalent information source for all of our audiences.

And we'll start your process almost by triggering your clients, making them take a stand on their, competitive set, making them aware. And you're trying to really solve this question with Peter Tealism, which is, what do you believe about your industry that no one else believes or that few others believe? It's actually a very difficult question to answer. It's extremely difficult. It's fascinating. We do a lot of work with founders. We do a lot of work with CEOs and CIOs. But the truth is, they're not professional message development people. They don't think about their message all day long. So it's always fun and super rewarding when we work with them. At the outset of the process, they really have a hard time. Entrepreneurs and founders in particular, they're some of the

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to run your business with none of the contracts or complexity. Run your business smarter or Square. Get started today. Support for today's episode comes from Square. The all-in-one way for business owners to take payments, book appointments, man, staff, and keep everything running in one place. Whether you're selling lattes, cutting hair, running a boutique, or managing a service business, Square helps you run your business without running yourself into the ground. I was actually thinking about this other day when I stopped by a local cafe here. They use Square and everything just works. Check out as fast, receipts are instant. Sometimes I even get loyalty rewards automatically. There's something about businesses that use Square. They just feel more put together.

The experience is smoother for them and it's smoother for me as a customer. Square makes it easy to sell wherever your customers are. In store, online, on your phone, or even at pop-ups and everything stays synced in real-time. You could track sales, manage inventory, book appointments, and see reports instantly whether you're in your shop or on the go. And when you make a sale, you don't have to wait days to get paid. Square gives you fast access to your earnings through Square checking. They also have built-in tools like loyalty and marketing, so your best customers keep coming back. And right now, you can get up to $200 off Square hardware when you sign up at Square.com

slash go slash how I invest. That's SQ-U-A-R-E.com slash go-slash how I invest. With Square, you get all the tools to run your business with none of the contracts or complexity. Run your business smarter to Square. Get started today. There's vision there. They can be a lot of things to a lot of people. there's so much ownership, they care so deeply about everything. So figuring out how to explain

who they are in a limited set of words is very difficult for founders and entrepreneurs. That's where people like us come in or a professional like us in-house, where you help trigger them, what's important to them, what's distinctive, often what gets them excited. Once you see that passion, when you're talking with them about, who are you, maybe getting them to tell some stories about how they started the firm. When you can see the energy start to come out, then you know you're on to something. And it's hard work, but it's worthwhile. Working with founders and entrepreneurs to do that is incredibly rewarding as a result. One of the most underrated skill sets as media becomes now interwoven with asset management. I've learned from a lot of my guests.

I've had people like Alex Hermosian a couple of times, Ryan Sourhan, to Balaje Shunavasa and Anthony Pompliano. And they're all exceptionally well at being able to communicate something both to a very sophisticated audience as well as the most simple audience. And they're able to make their content relevant to both parties. And that's such a skill, something that I've been working on for now, 400 plus episodes, but it's so difficult to actually be able to learn how to do that. They are the exception. They are true communicators, and they're comfortable with that kind of complex yet accessible messaging. And that's one of the reasons I think that they are confident coming onto a podcast like this because they know you've got a pretty multifaceted audience. Those are the exceptions. We work with a lot of CEOs that there's a lot of complexity in what they have to say.

our job is to distill it down into simple mess. But the trick is not just making it simple. Here's the hard part. It's making it simple but also natural and authentic to them at the same time. Ultimately, for CEOs or founders to be able to communicate with impact, it needs to be natural. You can't have somebody all of a sudden come in and give you. different messages that they think sound better. That's not going to work. The real magic of helping leaders like this communicate effectively in that way is to figure out how to distill it down

in their words, in ways, concepts, words, stories, anecdotes that come natural to them. So you're kind of taking what they give you, simplifying it and distilling it, giving it back to them. that is what helps them sing and really is the magic of good communication. Another thing that I find is also very underrated is the ability to context switch between audiences. Public CEOs are famous for the CIA chief investment officers at LPs are also really good at this. They're able to go to their stakeholders. Let's say they're at a public pension fund. They're able to go to their investment committee and explain,

something in one way. They're able to go to the pensioners, explain another way. They're able to go to the GPs, explain it to another way. So let me stop you right there because I personally think that this is a real area of learning opportunity for the GP industry. All of these GPs know very well how to communicate to institutional LPs. Yet many of them are now trying to expand into the wealth audience. The wealth audience has wirehouses, RIAs, multifamily offices, high net worth, affluent investors. Each one of those behaves differently. Each one of those needs different kinds of information. The kind of materials you need to provide to a wirehouse may be different than the kind of materials you need to give to an RIA. So customer segmentation,

What we see is a lot of GPs that are repackaging their Evergreen funds, their private equity investments, repackaging them, rightly so as part of evergreen funds, and then presenting them into the channel. The best and most advanced of the GPs out there are really starting to understand the nuances between those different subsets. Here's a great anecdote. we were talking to the head of a pretty successful multifamily office. And we were asking them, what do you experience when these private capital, private markets firms come to you and talk to you about their products? And he said, can you please tell your private capital clients to stop treating me like an institutional LP? I need to know more about your firm. I need to know if you're going to give me the educational information.

that I need in order to convince my end client. These are intermediaries that are often not looking for a sale. They're agnostic, ultimately, about the product. They're looking to figure out what's the best investment to suit their client's needs. But I thought it was so mind-blowing that he said, can you please tell your private capital clients to stop treating me like the institutional LP because I have different needs. That's a big wake-up call, I think, for a lot of GPs

that are only just getting into this new audience. You also have this within different even institutional investors. I've had several insurance CIOs like T.C. Wilson from the doctor's company that came in. He said his biggest pet peeve is people will come in, pitch insurance company know nothing about their industry, know nothing about the different ways that they need to have products packaged and service and all these things. I think this just comes back to this basic tenant of know your customer and know who you're communicating to.

I think a lot of people, they mistake different messaging for different audiences with some kind of inauthenticity. But it all comes from the same source of truth, the same differentiation. It's about really telling the relevant parts of it to every single party and knowing how to use the language, almost like you speak multiple languages. You speak English, French, Spanish, and you're able to communicate with these different parties and different languages. As these GPs start to understand the nuances between these different audiences and they're progressing into marketing to a broader wealth audience, then it turns into another marketing strategy that's a tried and true marketing strategy, but it's new for the GP landscape, which is demand generation. How do they build brand awareness among this bigger audience? advertising, sports sponsorships, how do they build trust? How do they provide the educational materials? How do they start creating preference among their potential end customer base? These require different

strategies and they require a more sophisticated marketing approach. These GPs are going to have to start taking on some of the capabilities that CPG companies have used for centuries in order to sell into that broader retail audience. But customer segmentation, knowing what your customer want, what's their challenge, what's their pain point, and then figuring out how can you start generating demands, generating pull, not just push, but pull into the channel, will be the next stage for a lot of these GPs.

Use this word preference. Absent of differentiation, taken to extreme. let's say you're going and buying a Coca-Cola, you're going to go to some grocery store, you're going to go to Whole Foods, you're going to go to Trader Joe's, even though it is that one, the same exact Coca-Cola.

And this preference is a highly underestimated aspect of getting investors to invest into. Talk to me about that. How do you build preference? First of all, when you look at the GPs that are more advanced, that are investing into getting out into the wealth audience, You can tell their goal is first mover advantage.

To some extent, there's an opportunity here. There's a window of time for GPs to build brand awareness among the broader wealth audience. And those that are first to the table as credible players of scale with the right products, they're going to have an advantage, thus the phrase first mover advantage. But think about it. You're sitting at home with your spouse or your parent or your kid, and you're talking about a new kind of investment that you think that we should explore adding into the portfolio other than just your typical 401K or ETF.

First thing they're going to say is, well, who is this firm? What do they do? How long have they been around? can we trust them? Human nature. Who is this firm? So the first wave of communication for building preference is to just build permission

to get past that first layer of consideration. Who is this firm? Can I trust them? Are they trustworthy? Have they been around for decades? Can I depend on them for being around in the future? You mentioned the wealth channel several times. A lot of top GPs, especially the bigger firms, are now obsessed with the wealth channel because it is the net new capital.

By some accounts, I had the CEO of I Capital up to $100 trillion or maybe even more, almost the exact size of the institutional investing AUM today is going to be on boarded through the wealth channel. And to your point, 95% of all capital from retail and from the wealth channel has been raised by the same five firms, the same kind of first mover advantages, the KKR, Blackstone, Apollos. How can smaller managers, whether emerging or managers on their fourth, fifth, six funds, top the wealth channel? Part of our research also asked the Wealth Channel, how good do they think GPs are at articulating what makes them different? About half said, they can't really tell the difference. There's a lot of sameness there. So that opens up an opportunity for those that are just coming into the game.

if you can present a differentiated message, if you can take some risks to using different kinds of communications, whether it's video, podcasts, sports sponsorships, what have you, to break through, there's an opportunity. Yes, there are some first movers out there on the field right now, but they also have pros and cons. the biggest versus the most specialized. There's also been some issues that have emerged for some of these evergreen funds and BDCs and REITs, et cetera. So it's not a clear, there are no clear winners right now. Smaller firms or firms that are not quite as advanced. In addition, I think as this field progresses, everyone's going to get smarter about marketing strategy.

Everyone's going to get smarter about exactly what is it that this audience is really looking for. So, for example, creating experiences that bring in your high net worth target audience in a way that's very personable and allows you to build a relationship in a unique venue, that's a strategy that some GPs are starting to use, thus sports sponsorships. But there's a lot of other VIP experiences that firms are starting to explore as a way to really make an impact and build differentiated relationships.

Before we started recording, you told me about some of your prolific endowment clients that you've had over the years. Oftentimes, GPs struggle to get into the theory of mind of the LP. What do you think GPs should know more about how LPs think and how LPs make decisions. Endowments, as an example, are a unique breed.

They're an asset owner. They're an incredibly important part, incredibly important clientele for any GP. The same is true for pension funds. These asset owners, they have a unique and very specific clientele. In the case of university endowments, it's the university endowments. it's the university community. First and foremost, it's the alumni. It's the donors.

To a lesser extent, but still present, it's the faculty. It's the broader university community. That's the audience that they care about. Yes, they're focused on returns. That's job number one. But they also need to make sure that they don't run crosswise with the priorities and preferences of their constituency in the case of endowments, it's the university.

In the case of a pension fund or a teacher's retirement fund, it's the population of teachers that they serve. There's a lot of, and what's interesting about that, there's a lot of non-financial considerations that stakeholder group can care about. So the more you lean into that population of asset owners, the more you need to consider the non-financial decision-making criteria, of those audiences.

Somewhat of a variation on the question of what I could do for you is what's really important to you. So outside of returns, outside of having good returns, what's the most important thing to you and what matters to you? And I think so few GPs actually ask that. In the research that we did, outside of non-financial, number one is reputation of the CEO. After that is the reputation of the firm. third is culture.

So think about that. Reputation of the CEO is a major decision-making factor. And this is CEOs at General Partners. This is the CEO at the General Partner. So consider has your CEO, are they discoverable online? Have they ever done a media interview? Or on the flip side, have they ever been involved in some kind of issue? where there might be some negative press about them.

Are they present on LinkedIn? Are they using LinkedIn as a conventional broadcast channel? Or are they using LinkedIn in the way that the social audience actually values where they can make a true impact? So once you open up that box of realizing that the reputation of your CEO matters, there's a whole world of tactics that you can employ. You said this earlier that there's some brands that focus on exclusivity and don't do media. Do you think that's a thing today?

In other words, if you haven't been around for 20, 30 years delivering great returns, could you really afford to do that today? Some firms are in a very fortunate position that the deals they have done have been iconic. And their reputation precedes them as a result. so their reputation precedes them. We've worked with one GP, for example, that in the kickoff meeting, one of the heads of the firm, the specific instruction to us was, do no harm. That was the brief, because their reputation was already in a super place.

Now, that said, that was several years ago. times have changed. Reputations are constantly evolving. Stakeholder expectations are constantly evolving. But there are some GPs out there where the deals they have done define who they are. Now, that's said, to maintain that reputation amidst everything going on today, because maintaining reputation is harder today than it's ever been. You've got AI, you've got wealth, you've got portfolio, you've got portfolio company crisis issues. You've got scrutinizing regulatory issues. You've got media that's always digging. You've got CEO transitions that always kind of reveal more than you want them to. So amidst that, it takes a lot of work, even for those firms where they have a reputation based on these

iconic deals, it takes a lot of meticulous thinking, very precision strategy in order to, be selective in order to maintain that exclusivity, less is more, limited approach. But make no mistake, that requires a lot of thought. And it requires a lot of support to maintain that. I remember I interviewed Alex Hermose the first time I flew to Las Vegas and he was giving me a tour of his office. And I just saw his team. I think they create something like 100,000 pieces of social media a year or something. They have something like 400 million down. That's some absurd amount.

I'm getting these numbers wrong. And I was walking around with him and I asked him like, how does this work? How do you guys do so much? And he showed me a statement. He's like, this is my team. The sacrifice that I give is I don't have any privacy. My team is in every one of my text messages and every one of my Instagrams, every one of my LinkedIn's.

I have zero privacy and that's the tradeoff I'm willing to do. in order to build this franchise, started really reflecting on this. There's this old adage, would you want this to be on the front of the Wall Street Journal? And I realized that really living in this glass house, this new media glass house, it's not only a strategy or a media strategy or you could bring in somebody to help with that, but it's also changing your behavior. How could you live in a way that's fully 100% congruent with how you want, to be perceived in the media. And I think about this also, as I've blurred the lines between

personal and professional relationship, I used to think about why did I keep, this was like a decade ago, I keep these relationships separate. And I realized I was slightly different in those two contexts. And I started really thinking about it and working on how do I make myself just one person in every single environment. Ironically, as I've learned what we talked about before, which is how to message and how to explain things differently to different audiences, I've also learned How do I become more of who I always am? So I show up the same way with my mom, with my wife, with my best friend, and how do I show up the same way in every environment?

I think that has really allowed me to scale the reach. The riddle for social media and leaders that want to build a profile on social media is the content that gets the most engagement, is the content that demonstrates your authenticity and who you are in genuine ways. I was just thinking this morning about the content that I've been posting on LinkedIn. The truth is, I'm guilty of using it as a broadcast channel, pushing information out there. Success on social media is using it as a way to really show who you are, show what you believe in, but also use it as a way to build relationships and create moments of interaction with your audience.

When you're just pushing out two-dimensional content, that's not leveraging social media. But I totally hear you because at the same time, in this glass house, if you say something wrong or that is upsetting to certain audiences in the wrong context, it may very well get picked up. You do need to think about what are your principles. What do you believe in? you do need to recognize that how you are showing up, whether it's in the office, on the street, or even in a concert hall, how you're showing up could get captured by anyone. So it does take a lot of thought. I think you could argue as well, probably stressful when you realize you are under the spotlight. But that's one of the new criteria for the modern leader

is you understand how to operate when you are in the spotlight at all times of the day and you're able to effectively navigate that. The best leaders are genuine and engaging, interesting, and clear and coherent and appropriate at all times so that they don't end up going sideways and hitting a speech. them. I've also thought a lot about this about why so many people post generic posts on LinkedIn or

Twitter. Some platforms almost encourage it like LinkedIn, although obviously that's changing. That's one side to it. But really, I think people have a hard time showing their authentic self and being vulnerable because if somebody doesn't resonate with that or doesn't like their hot take, it feels like a personal rejection versus a rejection of some arbitrary social media posts or some posts that's recycled from something that's on there or maybe some posts that's AI written. So it takes a real, not only vulnerability, but a real courage to put your true self out there. And by virtue of doing that, you're actually polarizing, not in a negative way in terms of politics or religion, but polarizing the audience towards people that agree with you and people that don't agree. And yet,

that is really the only way to be memorable and to have these memes. Going back to Alex Karp, a lot of people do not like Alex Karp. They think that he supports war and all these things, but he has a point of view and he goes out there and he puts himself out there. He puts his whole self out there. And some portion of the people like him, some portion of the people hate him, but he's so much more memorable than coming out almost in this politician speak where you're trying to appeal to everybody, say nothing,

and yet take up everyone's mind space. The one thing, yes, but it's also useful to keep in mind, there's no new ideas out there. It's not hard to see examples of what Alex Karp is doing or whoever did exactly the same thing before him. There's plenty of examples in history of great CEOs, great leaders talking about the trends and the opportunities, even the best presidents are doing the same thing.

So for those CEOs that are interested in pushing the boundaries, experimenting a little bit, the easy step is, show me some examples. How is this done when it's done successfully? That's an easy way to dip your toe in the water, or at least think about the art of the possible, is let's look at what others are doing and what the impact has been. A lot of these GPs, founders, entrepreneurs,

they are extremely empirical and data-oriented. We can show them the data. We can show them when a CEO went out there jogging and did a social media post about them. We can show what the empirical results of that social engagement was. So to be honest, For a lot of these GPs, their core competency of being highly analytical and data-oriented

actually will give them an edge when we start to think about communications as a data activity. That's so fascinating. You came from the advertising space. I believe it was in the 60s. There was a famous book, populized this idea of positioning. Everybody has a position in your head. We talk about Alex Carr, maybe. That's defense.

We talk about John Gray now as jogging videos because he went first. And I think a lot of this is there's a game theory to it. It's what hot take can you take and what medium can you give it to that you can now position yourself in the audience as mine and be that first mover? That's why these firms that have made the most progress in marketing to the wealth, they are investing to try to establish a first mover advantage because they know it's hard to keep. Positioning doesn't necessarily stick long term. They know that upstart firms, again, back to the advertising landscape, it was dominated by the largest advertising firms for decades.

And then creative advertising boutiques came up. They had better ideas. They were coming up with better ads. That's inevitable in the well space. Right now we have sort of a first round foray into the product suite. into the educational materials, into the positioning and the marketing messages. Inevitably, there will be the next phase of upstarts

who figure out a unique other angle that's a more creative approach, or maybe it speaks more acutely to a customer insight that the wealth audience is looking for. That's inevitable. The question is, who are going to be those firms and whether the big firms can be brave enough to stay relevant,

and stay distinctive as some of these upstarts start to punch through. If you could go back when you had first graduated college, and you could give yourself one timeless piece of advice. What would that be? Put the time in. I have done some work with one of the most famous soccer football coaches in the world ever. And he had a phrase, which is that work ethic is a skill. When I first heard that, it didn't automatically compute, but this was a football manager that was both grooming players to become the best and also acquiring some of the world's best players who were worth hundreds of millions.

but ultimately he needed all of them to work at 110%. I remember attending one of the practices for this team, and this is one of the top teams, one of the top franchises ever. I remember attending a practice, and the level of intensity of the players on the field at this practice really made an impression on me, and I asked the manager afterwards, Was that a game or was that just a practice?

He said, that's a practice. If you're not operating at 110% during practice, then you're not ready for the game. So work ethic is a skill that, A, you can learn. Some people can learn it. That manager, when I asked once what was his secret or what did he try to do with some of these $100 million players, He would say that I try to get them to remember where they came from, the people that had to work with extreme work ethic. When they were in the mines or when they were in the factories, I try to get them to remember that working class ethic because that's what it takes, at least in his eyes, to win. And I agree that work ethic is a skill, work ethic putting the time in and being able to have the resilience, have the focus, have the commitment, have the longevity.

There's another phrase, hustle beats talent every day of the week. Similar. Reminds me of Bill Walsh, legendary football coach. And when he took over the 49ers, I believe they were either last place or second to last in the league. and he started by teaching the players to tie their shoes because this whole philosophy is it all starts from the simple things. If you could start being excellent with an organization, starts to permeate. It's almost like the broken windows,

the reverse broken windows theory. Famously was applied in New York where if you could fix the broken windows, people would not commit more crimes because if there's broken windows, people lower their standards, they start doing petty crimes, and then if you don't enforce that,

then they start doing significant crimes. So it's almost this butterfly effect of causality. It also works another direction, which is if you start by tying your shoes, Jordan Peterson talks about making your bed. These are all kind of almost these memes and these jokes out in the market. But there's a truth to that, which is how you do something is how you do everything. And the more I interview GPs and LPs of these amazing organizations, I've come to realize that most of these organizations are about incremental improvements

compounding over many decades. We talked about before we started recording. Every episode I get 1% better, and now it's 410 episodes or so. That incremental improvement, it's extremely not sexy, extremely unremarkable, but yet it has extremely remarkable results if applied time and time again, and if you give the time for it to compound. The more I've worked in this business and the experience that I've had as a specialist and financial communication.

So I'm in a very specialized craft. And it's very possible throughout your career to reach a point where you think, I got this. Then you work with somebody who's much more senior to you and you realize, I don't got this. I've had the benefit at a few points in my career

of working alongside and seeing seriously advanced professionals do their thing and realized, yes, you may have it at one level, but when you go deeper, when you start peeling back the onion and you're thinking about the next level of nuance, this could be an investment decision, this could be a governance decision, this could be a reputation decision.

But there's thinking at one level, and then there's thinking at another level where you have a whole another universe of nuances to consider. There's a lot of value to be discovered. I actually think it is quite sexy to be thinking at that extreme level of meticulousness because you can often discover

something that can make or break a project, an investment, a decision, an announcement at that level. So I have really become an advocate for, of course, working with people that are more advanced than you. But really, I'm no longer, years ago, I used to be interested in the 80-20 rule. 20% of the effort gives you 80% of the outcome. Now it's flipped, because for me, you can find significant value in that last, let's call it, 1%,

you might find something that can really make the difference between distinction or success, winning a campaign, or really making a difference. And I talk to my team about this frequently. I've had to come up with a term for this when I see a skill gap between me and somebody else when I see it because it's changed my life so much. I call it being gapped. When I first had my podcast, I think it was in the early teens with Jason Callicanis, who had done over 2,000 podcasts.

The skill gap was so incredible that was both humbling as well as encouraging to see how much room I had to grow. When I talked to Alex Hermose, he was getting ready for his book lunch. He ended up breaking the Guinness Book of World Record for most books sold over a weekend. And when I talked to him, I think at that point he had gone through the five-hour presentation 70 or 80 times. He was just so focused on this incremental improvement. And I asked him the question on the second podcast, why were you so obsessed about the incremental? And his answer was quite surprising to me, which is so many of the games, especially on media, especially in today's world, are actually winner take all or zero sum. That extra editing that you do on a piece of media

can mean the difference between a thousand views and a million views. And the audience is becoming so fickle and so sophisticated that really that extra perspiration to your point, that 80%, just doing more and just getting to a level of excellence is such an underrated. When you can see that skills gap, because if you think about it, we don't necessarily see those skills gaps every day. But when you have the privilege of working with somebody that reveals that kind of skills gap to you, at least for me, it catapulted me into the next phase of my career

because I was one of those people that thought, I got this. But then I saw a true and big skills gap, and it opened up an entirely new universe of learning in this business, in my business, what drives me is the learning aspect of it. You're constantly working with so many different, the media, investors, companies, regulation. So learning really drives me as a part of this job. So when you can see that skills gap, in my case, it catapulted me into the next 25 years of my career. And all of a sudden, I was just a beginner again because I saw just how far I have to go. People are lucky in their jobs when they get to see one of those skills gaps and that can catapult them into that whole another universe of learning. So I encourage people on my team to really pay attention to that next level of detail, that next phase of incremental improvement.

Alexis, this has been an absolute masterclass. Thanks so much for stopping by. Thanks for having me. This was a great discussion. If you enjoy this conversation, want to hear more conversations with many of the world's leading investors, subscribe below.