In this three-part series, we’ll break down the individual elements that live in every hedge fund pitchbook and guide you through the basic content you should include when crafting your fund’s pitchbook. We’ll also discuss design fundamentals, PowerPoint basics, and provide you with some tips and tricks to help you stand out in a crowded field.
In part one of the series, we’ll start with the more qualitative elements that make up the first half of your fund pitchbook, where you’ll set the stage for your prospects, introduce yourself, and break down what makes your strategy unique. Part two will tackle the quantitative aspects and part three, design.
Deck? Presentation? Pitch Book? (Pitchbook?)
Now before we dive in (and before the naming police come after us), let’s be clear – none of these terms are incorrect, and all can be used interchangeably to refer to the collection of slides used to explain the important aspects of your strategy to potential investors. We hear “pitchbook” most often, but no matter what you call it a good pitchbook should be:
- No more than 18-24 core slides (unless you have a complex strategy).
- Unique to your firm, audience and, where you are in the fundraising lifecycle.
- Reflect the complexity of your strategy and unique selling points.
- Professionally designed, polished, without grammatical errors, and aesthetically pleasing.
To be impactful your pitchbook needs to stand out among the piles of printed materials and overloaded inboxes investors and consultants deal with every day. That’s no easy task and requires a thoughtful mix of structure, content, and design.
Section One: Setting the Stage
The opening section of the pitchbook generally consists of 5-6 slides that serve as the opening of your story. It’s your opportunity to grab investors’ attention, highlight your unique strengths, and lay the groundwork for what’s to come.
Remember, first impressions matter. Do not overlook the cover page, it’s your opening statement and it should be impactful. When crafting a cover page, approach it the same way you would your wardrobe choices. It should be professional, clean, tailored to your firm’s brand, and stand out in all the right ways.
Whether you decide to include an image or not, make sure it does include, at a minimum, your logo and firm colors, the name of your fund and the fund management company, and the “as-of” date. We also recommend including a “Presented to:” field to give it a personalized touch when delivering it to your prospects.
The disclaimers that appear at the front of your pitchbook contain information that must be included in your pitchbook. It may seem like they don’t vary from pitchbook to pitchbook, so you may be tempted to copy this from another and drop it into your own - Don’t do it! Have it drafted and reviewed by your attorney before distribution and periodically have them review it to ensure it stays up to date.
Table of Contents
This one may seem straightforward, and it generally is. But don’t forget, these slides usually have real estate to spare, so why not add a little substance to your table of contents slides? Do you have a company mission? A great story behind the name of your firm? Add it here as a “soft opening” to your pitchbook.
Tip: Don’t forget to regularly update your table of contents. Updates to your pitchbook may cause the order of your slides to change, or you may need to add or remove slides. Make a note to update the Table of Contents slide whenever changes are made and check it periodically for accuracy.
We recommend adding an Executive Summary slide at the beginning of each pitchbook that provides a succinct overview of the contents of the pitchbook. The Executive Summary should be in table form and contain a sentence or two on your:
- Investment Objectives
- Portfolio Manager’s Experience
- Track Record (if available)
- Edge (a unique approach, market opportunity; risk management, etc.)
- Alignment of Interests (if applicable).
Introduce Your Key Team Members
Next up is a “bio” slide that introduces key members of the portfolio management team - the PMs and Analysts that will directly contribute to your fund’s performance. Note, this is not the space for lengthy bios or professional headshots, those go in the Appendix. This slide should include names, titles, years of experience, and an optional short description of their role.
Why You? Why Now?
The last slide in section one should answer the questions why your firm and why now? What gives your strategy the unique competitive advantage that will help you outperform your peers? Favorable market conditions? Deep experience in an esoteric asset class? The latest machine learning tech? Make your case as succinctly and directly as possible on this slide. Data supporting your argument should go in the Appendix.
Section Two: Your raison d’être
This is the heart of your story; your argument for why investors should trust you with their investment. It’s also the section that causes the most confusion among our clients, and for good reason. The differences between each of the 3-4 core slides here are subtle but important.
This is the most cerebral slide in the pitchbook. The key points are fundamental and philosophical, not tactical, or strategic. This slide should provide an overview of the core beliefs and themes that drive your PM’s approach to investing and managing money. Use statements that begin with “we believe,” or “we seek to” to help convey your overall philosophy.
This slide provides the framework for your investment process. It’s a tactical breakdown of the investment strategy that can identify the investment universe, thematic investments, target market(s), market cap, or other unique characteristics that provide the structure around how you invest.
On this slide, you’re creating a visual representation of the process you employ to narrow your investment universe and ultimately select an investment. It’s generally a funnel that leads the reader, step-by-step, through your decision-making process. Where do you start? How do you identify potential targets from what is likely a large pool of potential candidates? What screening tools do you have in place? And how do you display all of this in a visually compelling way that makes sense? This slide can be complex and text-heavy, but good graphics will go a long way in clearly illustrating your process.
Tip: If you’re not working with a graphic designer on your pitchbook, consider it when building your investment process slide.
Up Next: the quantitative elements of a pitchbook. Join us next week as we discuss performance, portfolio characteristics, summary terms, and what should (and shouldn’t) go in the Appendix.