REO Capital - Versus Other Placement Agents

Nov. 15, 2013 - PRLog -- REO Capital – Versus –  Third Party Marketers

Many third-party marketers work with their hedge fund clients & PE clients and charge a retainer which is usually 20% of the management fees & Incentive Fees, while also taking a percentage of the fees on assets raised called a Success Fee.  The sales activities that third-party marketers are similar to include:

-Cold Calling – Other firms will cold call thousands of firms attempting to complete the Capital Raise.

-Email Blasts – Third Party Marketers send out your PPM to thousands of Institutions

-Attending - industry conferences

-Managing - sales team

In general a third-party marketer manages the sales cycle for hedge funds & PE Funds, involving the chief investment officer or other portfolio managers as needed to educate potential investors or meet with analysts. Duties include road show presentations, and meeting with potential investors. Sales cycles can range from 12 - 36 months. Because of this, most third-party marketing contracts are for 3 years and use exclusive contracts prohibiting Managers from using other Capital Raising Firms. They often include momentum clauses that ensure that the marketer is compensated even if the sale comes in after they stop working with this particular fund client. Then of course if you want to break those 3 year Contracts it can cost $50,000 to $150,000 in Legal Fees!

TPM usually take 20% of the management fees and 20% of the performance fees as well as charge a 2% to 10% Success Fee.

Most Third Party Marketers usually charge a minimum of $5.9 Million in Retainer +Success Fees on a $100MM Capital Raise versus REO Capital at $2.5 Million for the Retainer / Success Fees!!! Would you rather pay $5.9 million in Success Fees or our $2.5 Million in Retainer/Success Fees with the Retainer Fee “Refunded” at the end of the Capital Raise? The answer is simple – REO Capital is the Clear Choice!

REO Capital offers significant branding expertise, a global network of investors in the US, Europe, Canada, South America and Asia copious distribution channels beyond other capital raising firms, along with a demonstrable track record in successfully raising assets all for one low Fee!

REO Capital reviews existing marketing and reporting materials then works with managers to enhance materials’ appearance and content where appropriate and refine managers' marketing pitch.

REO Capital looks after the initial screening of investors, dissemination of information, road show coordination and follow up with the institutional investors. We provide roadshow coordination, detailed investor profiles, investor follow-up, and regular reporting on fundraising. We also handle limited partner due diligence processes.

REO Capital does not cold call or conduct email blasts instead we have over 20,000 existing relationships to call on!

REO Capital provides managers with a sophisticated CRM tracking system to provide regular progress updates which can often be useful in the marketing and reporting efforts to keep the client aware of the progress continuously during the capital raise.

REO Capital helps managers with the due diligence process to ensure the vast majority of questions typically asked by investors are addressed appropriately. This is used to supplement marketing efforts and help shorten the sales cycle.

REO Capital, provides GP’s with other reputable LP Investors!

REO Capital aligns its interests with GP’s by investing a portion of our Success Fees in the funds we raise capital to establish long term close relationships with those GP’s.  Few other Firms can add value like this or make this claim.

REO Capital does not lock our clients into a 3 year Contract and we use a 30 day advanced written notice & a non-performance clause to terminate our Contract!

REO Capital Retainer & Success Fees are about half of some Third Party Marketers that charge only a Success Fee!

REO Capital takes on a maximum of 5 to 10, non- competing Capital Raises per year so that we can focus on a personalized Capital Raise for each client. Some firms take on 20 to 100 Capital Raises per year and inevitably end up with duplicating, competing capital raises all seeking the same LP Investors! It’s human nature to think that Bigger is Better, but Smaller is Better when it comes to Capital Raising Firms, we can give more personalized attention to each client without duplication or competing Capital Raises!

REO Capital teamed up with Boston Analytics to provide services such as, financial modeling, comparative analysis, competitive analysis, market analysis, sector analysis, & due diligence management before & during your capital raise. We can also provide Valuation & AdvisoryServiceswith objective, independent, and defensible opinions of value that meet accounting, regulatory, and corporate governance requirements. REO Capital can also provide, Portfolio Valuations, Financial Reporting and Tax Compliance, Corporate Valuations & Asset Appraisals, Fairness Opinions, & Solvency Opinions.  REO Capital offers you extensive services for your fund beyond other fundraisers.

REO Capital maintains a network of relationships with clients such as -  Smaller Foundations, Family  Offices - Globally, Pensions Consultants, Investment Consultants, Fund of Funds, Private Banks, Sovereign Wealth Funds, and RIA Firms - totaling over $40 Trillion in client assets to call on to assist those General Partners! Most firms overlook the RIA Distribution Channel and other firms do not have a rolodex of over $40 Trillion in Assets to call on!

REO Capital has found that LP Investors are becoming wary of excessive fees especially high Success Fees paid by GP’s within Private Equity Funds. LP’s may pass on funds with greater expenses & fees!

Our professional approach and proven track record in capital raising has been recognized by Preqin as "International Hedge Fund Award Winner 2013" & "US Consultancy Firm of the Year - Capital Raising" along with our Business Excellence Award.

John Denes

REO Capital, LLC

www.reocapitalllc.com

Detroit | London | Hong Kong