The 3330 Method and Lessons From 28 Years of Fund Marketing
10 Advanced Capital Raising Strategies That Took Raising $1 Billion + 10+ Years to Find Out
Fund managers and emerging managers who are weighing whether to hire a placement agent or third party marketer, and want to know what investors expect today.
Worth quoting
"If you don't stand out and you're not adding value at every touch point, then it's a waste of an email and it's a waste of your time."
"If you can't look somebody in the eye and explain what it is that you do, you have to stare at the corner of the ceiling because you're scared to death."
What this talk covers
A placement agent's job starts with a 30-second voicemail, according to Chip and Sam of PFM. That voicemail aims to earn a three-minute call, which aims to earn a 30-minute conversation. Only then does the firm set up the investor with the manager. They call this the 3330. The firm has worked in alternatives since 1997 and has been a broker dealer since 1998. It takes on only five to seven funds at a time.
The talk also covers what has changed. Chip calls this the hardest fundraising climate he has seen, including 2008. He points to unanswered calls, limited liquidity from private equity and venture capital, fee pressure and higher compliance cost. The speakers stress steady communication with investors, especially after a bad quarter. They also describe the five products they currently represent.
Facts from this talk
- PFM was founded in May 1997 and has been a broker dealer since 1998.
- PFM takes on five to seven funds at a time and sees about 150 products.
- The speakers describe the T+3 product as paying Treasuries plus 3%, with 60-day liquidity and no fees.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: 10 Advanced Capital Raising Strategies That Took Raising $1 Billion + 10+ Years to Find Out. 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 placement agent agreements, investor outreach compliance and fund fee terms. Do not use AI to write your own legal agreements.
What to take from this talk
- Relationships beat mass outreach. Sam says investors get 500 emails a day. PFM does not blast emails. It reaches out to people it knows and adds value with every touch point.
- Communicate during bad quarters. Chip described a manager who stopped calling investors after two weak quarters. About $360 million left over the next 12 months and the firm could not raise more for him.
- Fees now face real pressure. Chip lost a $75 million Duke investment when a manager moved from one and 20 to two and 20. He now sees one and a half and 20, or one and a quarter and 20, as more realistic, plus founders fees for new funds.
- Screen managers before pitching. PFM looks for a two to three year track record and 75 to 100 million in AUM. It also checks references and service providers, and asks whether the manager runs a sound business.
- Compliance shapes how agents reach you. Chip says compliance considerations shape how placement firms contact investors, so outreach tends to rely on voicemail and email. Chip also says firms now put more weight on having strong compliance support. Many managers talk to a securities attorney about what applies to their situation.
- 1Leave a 30-second voicemail
- 2Earn a three-minute call
- 3Hold a 30-minute conversation
- 4Confirm investor interest
- 5Set up meeting with manager
Related questions
- What is the difference between institutional and retail capital?Institutional capital comes from organizations that invest on behalf of others, such as pensions, endowments and large managers.
- How do I raise capital from a foundation?Start by checking whether your fund is large enough.
- 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.
Questions about this video
What is the 3330?
It is PFM's outreach sequence. A 30-second voicemail aims to earn a three-minute call. That call aims to earn a 30-minute conversation. After that, the investor is set up with the manager.
Which investors does PFM call on?
Mostly foundations, endowments and family offices. Chip says that if an investor does not have 50 million dollars, PFM is not calling on them, so they do little in the high net worth space.
What does PFM look for in a fund manager?
They want a realistic growth plan and a track record of at least two to three years. They want 75 to 100 million in AUM, good pedigree and a manager who is easy to work with.
Put this into practice with the data room checklist. See all institutional investors resources.
