Always Be Closing. Thanks to the 1992 classic, Glengarry Glen Ross, salesmen will forever have the first three letters of the alphabet engrained into the back of their eyelids.
It works for deal teams as well. We cannot afford to not close deals. Deals are the crux of any private investment portfolio. Closing deals is our lifeblood.
Lawyers on the other hand don't get paid to close. Getting paid by the hour means closing is your enemy. "Show me the incentives and I'll show you the outcome," said Charlie Munger.
Every dealmaker MUST keep this in mind when they review their counsel's response. Given that there are two sides to every deal, opposing counsel can also be responsible for slowing things down. It is this loss of control that requires us to have borrowers cover all deal legal costs, protecting our wallets against inexperienced borrowers.
But it doesn't protect us against closing timelines. It is still our responsibility to get to the close. A great closer keeps everyone on track. ABC.
(Our team closed 4 significant deals in August. I feel like a proud father)
- Conor
Deciding which tech applications to buy and how to use them has been one of the more rewarding elements of scaling our infrastructure. We think about applications as being in one of a few layers:
The base layer consists of core applications. That’s the operating systems, security tools, and compliance programs that are necessary to support the ensuing layers.
The next layer consists of general productivity tools. As a globally distributed team with lots of counterparties, nailing communication effectiveness is particularly important to us. We’ve created separate stacks of technology for external versus internal communication and crucially our team is well versed in how and when to use them. For example, we leverage Loom, a screen-recording app to help manage asynchronous conversations when calendars can’t align. And we use Notion to manage internal information that needs to be easily accessible over time. In this layer, we are a grateful recipient of the billions of dollars that SaaS companies have spent to build these finely tuned apps, and we eagerly await AI solutions that move the needle. The AI we’ve adopted most successfully so far is a meeting transcription and analysis bot, which is another way to prevent full calendars from getting in the way of information dissemination. The key for this layer has been picking the right mix of applications (which is saying ‘no’ more than ‘yes’) and deciding on which features to use, so that we are up and to the right on the “adoption” and “efficiency gain” chart.
The third layer consists of technology specific to our investing business. Finding the right applications for this is a high wire act: on one hand, esoteric finance brings us to corners of the investment universe with unique data sets, process flows, and counter-party sophistication which require tailored solutions – and on the other, we want to manage our holdings holistically as a single investment manager. To continue the analogy, Excel is the perennial safety net. Our CRM is specific to the asset management industry and has been working well for us across our business lines and asset types. We have not been able to find a Loan Management System (LMS) or portfolio analysis tools that are as accommodating. We use a specialized LMS for our credit facilities, another for our charge-off portfolios, and often rely on our servicers’ systems. We’re always hesitant to build our own solutions, following the idea that software providers should build the software and investment managers should manage investments. However, we have found a couple areas that we believe building will give us an advantage, such as tracking music royalty performance. Even there our approach is to glue together established tools rather than build from scratch.
There is also an integration layer which keeps this growing roster of independent applications aligned. Like everything else this is right-sized. Integrating every system would be more burdensome than it’s worth so we focus on the most important touch points like linking our fund accounting system to our primary LOS though a no-code IPaaS (Integration Platform as a Service). Most urgent alerts are channeled from various applications to the team Slack via Zapier, a great basic workflow automation tool.
This infrastructure needs to be tended to and pruned like any healthy living ecosystem. We constantly take meetings with tech solution providers to learn where technology is headed and we’re keeping a close eye on where Artificial Intelligence will provide a real leg up. We’re particularly interested in its ability to find patterns in payment history and in offering dynamic payment plans for debtors to maximize positive outcomes. Many technology providers are quick to say that they can absolutely manage any specialty asset or can fast-track our AI adoption, but you won’t catch us asking a barber if we need a haircut.
- Jonathan
