How do I get on a pension consultant's approved list?
Short answer
There is no single form that gets you on the list. Consultants want to see a real team, a track record and clean numbers, usually audited returns. I would build a master due diligence questionnaire, keep a data room ready, and treat the consultant as a long term ally. Many managers talk to a securities attorney about what to share and how.
You earn a spot on a consultant's good list by being easy to trust and easy to check. I don't know of one application that does it for you. In my experience the work is a thorough due diligence package, a real track record, and patience.
Why the consultant sits in the middle
When you pitch a pension fund or an endowment, you are often dealing with a committee. Several people have to buy in. Many times an institutional investment consultant is advising that fund on its hedge fund investments.
Some consultants have a discretionary mandate and make the decisions. Others are non-discretionary and only give opinions, while the pension or endowment makes the final call. You won't always know which type you face, so treat both as important.
"Either way, you want to get on the good list of these institutional investment consultants, and they can be a great ally of yours if you win one over on working with you long term."
This clip walks through the five types of hedge fund investors, including how endowments and pension funds work with consultants.
Summary and key takeaways from this video
Build the questionnaire once, reuse it forever
In the institutional world, you will be asked to complete a due diligence questionnaire. These usually run 35 to 70 questions. The first time, it can take a full business day or even two.
Here is what I learned from doing this many times. Most of the questions repeat from one investor to the next. So every new question you answer goes into your master template.
Then, when a new investor or consultant sends their own, you can offer your thorough version instead. In my experience, about 95% of the time they say sure. Sometimes they need it entered into their own database in their own format, and that is fine.
Here I explain how a master due diligence questionnaire came about and how to use it when institutions ask for one.
Look institutional before anyone asks
People at this level are used to dealing with a relatively in-depth team, an in-depth track record, numbers on everything, and usually audited returns. If you can't show those, a consultant has little to work with.
Have a data room ready, and a due diligence questionnaire or FAQ. Many managers at smaller sizes are not asked for these. When you hand over something that looks like an enterprise quality operation, it can help you stand out from other managers.
In this workshop clip I explain why a data room and a due diligence FAQ give a capital raiser an edge.
Summary and key takeaways from this video
Treat it as a long game
I would not expect one email to get you listed. The goal is to be a manager the consultant is comfortable putting in front of a committee. That comes from clear answers, consistent reporting and showing up over time.
Be careful with what you say and send. Many managers talk to a securities attorney before sharing performance figures or offering materials.
From my books and event talks
Size matters here, and I would be honest with yourself about it. At the startup phase you are not targeting institutional investors. In my experience you often need to get to $70 to $100 million, maybe even a couple hundred million, before institutions are around. Most managers start with friends, family, angels and private investors, and the family office space is the middle ground. Also change your words. If you are going to a pension fund, you use different language than you would with a wealthy individual at the golf club.
"At the startup phase you're not targeting institutional investors. You usually need to get to $70 to $100 million, maybe even a couple hundred million, before you have institutional investors around. A lot of people start with friends, family, angels and private investors, and then the family office space is really the middle ground."
"If you're going to a pension fund, you're going to use different words than when going to a high net worth individual, worth five million dollars, that you met at the golf club."
Facts from this talk
- Institutional due diligence questionnaires usually run 35 to 70 questions and can take a full business day or two the first time.
- In the speaker's experience, investors accept a thorough master questionnaire in place of their own about 95% of the time, though some need it in their database format.
- Investment consultants to pension funds and endowments may hold a discretionary mandate or be non-discretionary and only give opinions.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: 2 Critical Core Due Diligence Tools - Episode 4, 5 Types of Hedge Fund Investors, The #1 Strategy to Attract Investors Due Diligence Advantage | Capital Raising Workshop. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around sharing performance figures, offering material communications and fund marketing practices. Do not use AI to write your own legal agreements.
Your next steps
- 1Write a master due diligence questionnaire and add every new question you get.
- 2Organize a data room with your team bios, track record and key documents.
- 3Get your returns and numbers into the cleanest, most verifiable form you can.
- 4Talk to a securities attorney about what to share with a consultant and how.
- 5Follow up with consultants over time instead of pitching once.
More questions on this
Do all pension funds use an investment consultant?
Not every one, but many pension funds and endowments work with one. Some consultants make the decisions and others only give opinions to the fund.
How long does a due diligence questionnaire take to fill out?
The first time it can take a full business day or two. After that, a master template saves you most of the effort.
What if the consultant insists on its own questionnaire format?
Offer your master version first. If they still need their own form, fill it out and add any new questions to your template.
Related questions
- How do pension funds choose which managers to invest with?Pension funds usually pick managers through a group process.
- What does an institutional allocator expect in quarterly reporting?An institutional allocator expects reporting that comes from an institutional platform.
- How do university endowments allocate to real estate sponsors?Most university endowments put money into real estate through their alternatives bucket, which is a large share of their total portfolio today.
- How do sovereign wealth funds invest in private deals?Sovereign wealth funds sit among the institutions that write 10, 30, 50 or even 100 million dollar checks at a time.
Work through it with the data room checklist. See all institutional investors resources.