Last two weeks were focused on different parts of the LP investment process (pitch, recommendation report), now we are reaching the close (investment memo + compliance report). There are three parts to the close with Pension funds: investment memo, legal disclosures (no outstanding material law suits), and a compliance report (environmental and social considerations).

Investment Memo

Date: December 22, 2020


  1. Summary: Invest $100M for Insight to pursue an investment strategy of structured minority equity and debt investments in software companies in North America and international markets
  2. Strategic Allocation within the Private Investment Fund: Fits the target allocation for CRPTF’s Private Investment Fund. Exposure to Corporate Finance strategies was 84% in September 30, 2020. Exposure to mezzanine funds was under 7% (below CRPTF’s target of 8%).
  3. Investment strategy and opportunities: Venture growth, buyout and take-private transactions targeting gross return multiples of 1.5x. Software valuations have grown 4–8 times. Software transactions happening at 20x EBITDA may be capitalized with debt multiples of 7x and equity multiples of 13x. Targeting similar companies to those targeted by Flagship fund.
  4. Firm and Management Team: Founded in 1995. Currently has 6 MDs.
  5. Track Record: Flagship funds- Gross IRR of 25%, TVM of 2.3x. Loss ratio has dropped from 22% to 8%.
  6. Key Strengths: Sector-focus showing strong returns (which demonstrates domain expertise and strong sourcing capabilities). Fee structure of less than 2%. New strategy leverages Insight’s existing operations.
  7. Major Risks and Mitigants: New strategy for the firm, they may not have expertise to execute the strategy. No team dedicated to the fund. Conflicts of interest with existing flagship fund.

Legal Disclosures

CRPTF looks at lawsuits over the past 20 years and any open cases against Insight. Also looks at claims regarding: fiduciary, E&O insurance policies, or fidelity policies +internal investigations.

Compliance Review

Organizational commitments to social issues:

  1. Global voting holiday allowing employees to vote.
  2. Purchasing supplies from minority led/owned vendors.


  1. Investment memo is generally a summary of the recommendation report
  2. Legal disclosures: make sure if you are subject to a lawsuit, it is nothing material.
  3. For the compliance review: discuss how you actively help promote diversity (women + minorities) even if your workforce is lacking representation. In the case of CRPTF, minorities seemed to include all those that are non-white.
  4. ESG seems to be the only part of the firm that was graded with a clear criteria. Familiarize yourself with an LP’s ESG guidelines and adapt based on that.



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Muieen Cader

I write about Venture Capital. Previous VC experience with Betatron. Advisor to startups (across the globe) and sailor.