What is the role of the Investment Lead?
The Investment Lead assumes most of the roles of a traditional emerging manager, including:
- Sourcing and closing limited partners
- Identifying and negotiating investments with portfolio companies
- Tracking progress and completing valuations of portfolio companies
- Approving quarterly and annual reports and financial statements
- Managing communication and reporting with limited partners
- Overseeing distributions of cash and stock to limited partners
- Reviewing annual tax and regulatory filings
The main difference between an Investment Lead and an emerging manager in a traditional fund is that there is an investment committee (IC) that makes the final investment decision. Many emerging managers have an investment committee.
What is the typical process for making investment decisions with a Start Fund?
The Investment Lead prepares information to submit to the investment committee in Decile Hub, including a Deal Memo and supporting documentation. Then, the Investment Lead clicks the “Submit for Review” button in Hub, and the IC will review the investment within a couple of business days and either approve the investment or request clarifications.
What happens if the investment committee of a Start Fund rejects an investment?
It is expected that the investment committee of the Start Fund will approve most investments. There are circumstances where an investment may be reflected due to extreme terms, unusual legal, compliance risks, or conflicts of interest. In these cases, the Investment Lead may either work to remedy the issue or decide to pass on the opportunity.
How does limited partner reporting work with a Start Fund?
The Investment Lead is responsible for producing reports for limited partners, which may include newsletters, quarterly reports, and annual reports. Decile Group produces financial information as part of these reports using information and data on the portfolio performance from the Investment Lead. Decile Pro, the LP portal for Decile Hub, automatically displays the fund financial data to the limited partner. The Investment Lead provides portfolio insights, market insights, and qualitative analysis in the reporting.
How does portfolio company reporting work with a Start Fund?
The Investment Lead is responsible for monitoring the financial performance of portfolio companies and collecting information to provide valuation updates on the portfolio companies on a quarterly and annual basis. Whenever a portfolio company has a subsequent investment, the Investment Lead collects the valuation and deal documentation to load into Decile Hub for reporting. The Investment Lead may mark down portfolio companies. Decile Group will assist with collecting portfolio valuation on a case-by-case basis.
What decisions require Decile Group’s approval as the GP in the Start Fund?
The Decile Group GP acts as the investment committee (IC). The investment committee reviews, provides constructive feedback, and formally approves deals negotiated by the Investment Lead.
Does Decile Group have voting rights in companies the Start Fund invests in?
The Decile Group typically does not exercise direct voting rights in portfolio companies. The Investment Lead maintains the relationship with portfolio companies. In cases where voting rights need to be exercised, Decile Group will rely on guidance from the Investment Lead on how to vote.
What is the process for making distributions with a Start Fund?
When a portfolio company exits, the Investment Manager coordinates with company management to receive the proceeds. When the proceeds are received, Decile Group coordinates with the Investment Lead to distribute them according to the waterfall outlined in the Limited Partner Agreement (LPA), with returns flowing to LPs first until they receive their capital back, followed by carried interest distributions.