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How’s it going, everyone? Today, we’re mixing things up a bit as I’ll share some notes from my “Funds that Won” podcast interview with Lincoln Archibald about Fund Launch Partners.
Hailing from Idaho and USU, Lincoln Archibald is a Partner, CFO, and Fund Consultant at Fund Launch and is the Co-Founder and CIO of Fund Launch Partners.
Let’s get into the interview!
Exploring a New Fund Opportunity
Bridger: Welcome to your show, Lincoln! Let’s hear about your fund that may or may not win!
Lincoln: We are launching a GP stakes fund. In this unique asset class, we have the objective to acquire minority interest in the management companies of emerging funds. Over the past couple of years, we’ve been a part of a company called Fund Launch, where we teach people how to start investment funds. The company started out specializing in education, which quickly grew into consulting. Today, we’re almost classified as a service provider, where we help incubate new funds. Thousands of our clients all have very different needs, whether it’s capital, human capital, management, legal, or anything else.
Why Invest in Emerging Fund Managers?
Bridger: Ok, back to your fund, Fund Launch Partners… why would anyone want to invest in minority stakes of emerging funds? These fund managers don’t have track records; they haven’t proven themselves yet. Why invest there?
Lincoln: Statistically, emerging fund managers perform better. They generate higher IRRs because they are smaller funds. These fund managers also work with smaller checks, which are being allocated to inefficient markets. Additionally, many of these emerging managers are coming right out of the industry, meaning that they are bringing fresh industry experience and insights to the table. They observe inefficiencies that their bosses are doing or that the market is showing, and they’re able to capitalize on that with a fund. Generally, these smaller funds focus on single products like multifamily, instead of MF, assisted living, industrial, or whatever. It’s easier to succeed when you can do what you’re good at.
Real-World Examples of Emerging Manager Strategies
Bridger: Let’s look at some examples. Of the 9 portfolio companies in the fund right now, what’re the inefficiencies that they’re invested in?
Lincoln: We have a fund out in Texas doing distressed pref equity. He’s been a broker for the past 20 years and has syndicated several deals, but he knows about all these developers who overshot their properties. They either didn’t raise enough money or spent too much, so they now need to file for bankruptcy. But, they aren’t able to refinance because rates keep going up. So, my Texas friend lends to these developers in return for preferred equity – a huge win! As you can see, this emerging manager has a unique strategy and specific asset class that has a big chance at succeeding.
Target Industries for GP Stakes
Bridger: Is there a certain industry you are targeting with these GP stakes?
Lincoln: From the way we have positioned ourselves over the years, we know funds. We know the business of funds extremely well. Last year, we set up 130+ funds through our programs; we know this business inside and out. We specialize in systematizing and optimizing the operations and investments of funds. We consider ourselves industry agnostic. In many ways, we are betting on the manager more than the fund – or the jockey rather than the horse. We look for strong operators who have demonstrated the ability to succeed in their niche.
Conclusion
That’s all we’re covering today about Fund Launch Partners, but click here to listen to the rest of the interview! If you want to learn more about FLP, visit this website! Or, if you want help starting any kind of investment fund, visit Fund Launch!
Thanks for stopping by,
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DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the author
