Marketing Alternative Investments: A Comprehensive Guide to Fundraising and Investor Relations for Private Equity and Hedge Funds by Hemali Dassani

Marketing Alternative Investments: A Comprehensive Guide to Fundraising and Investor Relations for Private Equity and Hedge Funds by Hemali Dassani

SECTION 1
FUNDAMENTALS

CHAPTER 1
Endowments and
Foundations
The foundation of any marketing strategy is to “know
your customers.” In the alternative investment
marketspace, a few categories of investors are
dominant. Endowments, foundations, pension funds,
sovereign wealth funds, funds of funds, family offices,
insurance companies, registered investment advisors, and
high-net-worth individuals are all increasing their exposure
to alternative investments. These groups of investors, within
the same category, share common characteristics, face
similar constraints, and often are governed by the same
regulations. Given the growth and their dominance in the
alternative investment space, it is important to understand
each of the categories well before starting a fundraising
campaign. This chapter, and the others in Section 1, focuses
on “knowing your customer” for alternatives.
Endowments and foundations (E&Fs) are entities
designed to meet a set of social objectives or “good”
causes. A long history of American philanthropy, dating back
to the nineteenth century, enabled the growth of these
institutions. E&Fs are among the largest investors in
alternatives, which are investments outside of traditional
stocks and bonds. These institutional investors are often
presumed to be perpetual entities and as such are long-

term asset holders. This long view accords them the latitude
to assume additional portfolio risks, such as investing in

Marketing Alternative Investments: A Comprehensive Guide to Fundraising and Investor Relations for Private Equity and Hedge Funds by Hemali Dassani