Ep. 57: The Next Generation of Real Estate Fund Managers: People, Capital, and Strategy - Jonathan Glick - Founder/Manager at Incubation Capital Partners
Feb 11, 2025
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In this engaging discussion, Jonathan Glick, Founder and Managing Partner of Incubation Capital Partners, shares insights from over 20 years in investment banking and private equity. He delves into the evolving fundraising landscape for real estate, emphasizing the need for authentic relationships in securing capital. Jonathan discusses the challenges faced by emerging managers and strategies for standing out. He also shares where he'd allocate $150 million today, highlighting niche markets like office space and senior housing, and the importance of adaptability in uncertain times.
Storytelling is crucial for emerging managers to captivate investors, as personal narratives often outweigh mere financial statistics in fundraising success.
The capital landscape is shifting towards private wealth, presenting emerging managers with opportunities to implement innovative strategies to attract new investment.
Deep dives
The Importance of Storytelling in Capital Raising
Storytelling is essential for fundraising, as the ability to narrate one's journey can captivate investors more than mere financial statistics. Investors are increasingly drawn to the personal stories behind the entrepreneurs, which can make a significant difference in securing capital. It’s not just about the deal's viability; it’s about understanding what ignites the passion of the fund managers, as relationships often drive investment decisions. Successful capital raisers have demonstrated that being an excellent storyteller can sometimes outweigh even the best investment acumen.
Current Challenges in Capital Raising
Raising capital has become increasingly challenging over the past few years, particularly for emerging managers struggling to break through. Factors contributing to this difficulty include an oversaturated market where many managers compete for limited capital, resulting in a heightened focus on performance and differentiation. Additionally, the rigorous demand for due diligence means that capital sources now require impeccable credentials and track records to even be considered for investment. Consequently, emerging managers must navigate these heightened expectations while also contending with longer fundraising timelines.
The Shift Towards Private Wealth Capital
The capital landscape has shifted significantly, with a growing reliance on private wealth capital, especially as traditional institutional investors become more conservative. Many emerging managers are now tapping into the family office and private wealth management sector, which presents an opportunity for innovative investment strategies. This sector is developing rapidly, driven by the substantial wealth transfer occurring as baby boomers pass their assets to younger generations. This trend suggests potential for emerging managers who can articulate unique value propositions to attract this new wave of private capital.
Navigating the Future: Strategies for Emerging Managers
For emerging managers, success hinges on a combination of grit, a well-defined narrative, and authenticity in conveying their unique value. It is crucial for these managers to have a solid understanding of their story and how it aligns with market demands, particularly by focusing on niche strategies that stand out in a crowded space. Capital raising is inherently challenging, but those who can present compelling stories and demonstrate resilience are more likely to attract investors. Ultimately, the ability to engage authentically with prospective partners and to showcase innovative approaches to real estate investment is vital for survival and growth in this competitive landscape.
Jonathan is the Founder and Managing Partner of Incubation Capital Partners. A seasoned entrepreneur with over 20 years of investment banking and private equity experience, Jonathan has played an integral role as an advisor or principal investor to a variety of investment managers in real estate private equity, ranging from small startups to global investment firms.
Jonathan is responsible for the firm's strategic direction and oversight. In this role, he primarily focuses on distribution, client servicing, business development, and executive search functions.