Bridger Pennington started a fund at 22 by first proving his model with personal capital, then running single-asset deals to build a track record before scaling to larger multi-deal funds. He walks through the practical steps he took to establish credibility as a young fund manager.
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How to build credibility as a new fund manager and the path forward. We're going to answer this question in 2 minutes or less. My name is Bridger Pennington, the founder of 2 8-figure investment funds right now. I launched my first fund in college at 22 years old, so I know a little bit about trying to build credibility as a brand new fund manager. So let's dive down to the iPad and talk about it. So how do you do this? Okay, how do I build credibility? There's an old adage and proverb in the Bible that talks about if you're a good steward over small things, you'll be made a great steward over many things. The same thing is true with money management. If you can do well with a small amount of money, the odds are you can do good with a bigger or larger amount of money, or people will at least give trust in doing more of that. There's 2 different types of paths here that people, you know, they spin out. Maybe they worked for a fund for 20 years, they were on Wall Street for 20 years, and they spin out to do their own fund. I've still seen these people struggle to raise money sometimes because people still ask the question, well, how is it really going to work? I know it worked when you worked at Apollo or BlackRock. because you were at Apollo or BlackRock. Could you really do it on your own? Generally speaking, I see a pattern. Here is the pattern. You start out to build credibility. You do something with your own money. You prove the model and you put a lot of your own skin in the game. You say, you know what, I believe in this so much, I'm going to put my own money down. We're buying businesses, we're trading options. You know, I'm just gonna do it with my own money because I just know. And now sometimes you can't do every deal with your own money. So you're going to use a little bit of other people's money, but a lot of your own money as well. And that might take you to the second phase here, which is you actually do a single asset fund. So you With your— a lot of your own money. You say, okay, we're going to take down just one property. We're going to take down just one business and I'm going to prove the model. I'm going to show how good we can do what we call a single asset fund or a syndication where we actually prove this out. Once you've proven this and sometimes you can do 3, 5, 10 of these. Once you've proven out, oh shoot, like we can do this on an individual asset level, then we can move to a full-out fund. And a fund is going to do— We're going to do, you know, 20 deals over the next 18 months on this certain vertical. Now, that's generally the path. If you're, again, new to build credibility, this is generally the path you go. Now, you could jump to number 2 or number 3, but even you'll do a small fund to build up to a fund 2, to a fund 3. The whole goal of building your first fund is all around credibility. Let me tell you a little story. I was 22 years old. A lot of you guys know my story. I pitched my dad for money. My dad said no. I'm going to try. I'm trying to go raise money. And I'm out there. I'm doing a small debt fund. I put a lot of my money, pretty much most dollars that I had in this world, I put into this fund. I was then raising some money to get a little bit more money to go out and do this. And I would pitch them like this. I would say, hey, I know you think I'm too young to do this fund. I know you don't think I have the credibility because I don't. I'm in college. I haven't even graduated college yet. But let me tell you this. Number one, the deal is so solid. Just look at the asset. Look at what we're investing into. I'll give you all the pro formas, the underwriting. Please poke holes in the deal. I took the focus off of me and I pushed it onto the deal. Number two, I actually leaned into it. I said, I know I'm young and guess what? It actually is to my advantage. I'm not here to make tons of money. Yes, I hope I make a little bit of money doing this, but I am here to build credibility. My goal of this fund is so that you get an amazing return and you go tell all of your friends and family how amazing it was investing with Bridger. That's my purpose of this fund. And because I want to do a fund 2, a fund 3, I've got a long career ahead of me. I've got to crush it on this. And actually, the last thing I said too, I said, furthermore, You know, you would probably want me to have gray hair and, you know, have all this stuff, which is fine. That can work. And I tried to lean into this. I said, well, you know, if I had gray hair and I was in this big house and I was already rich, I'm not going to work very hard because I'm already rich. Guess what? I'm young. I can work 15 hours a day to make this thing work. I've got all my own money tied up in this. Furthermore, if I was rich and 60 years old, I go to Hawaii 3 times a year. I've got my house in Palm Beach. I've got kids. I've got stuff, a lifestyle I've got to keep up. I'm like, right now I live in college. I have— I pay $400 a month for an apartment. Like, I live off of nothing. I have no propensity. I don't need to commit fraud. I don't have to keep up a lifestyle like some rich guy with gray hair would have to. Furthermore, I can work 12 to 15 hours a day on this. And when you're looking at the deal, I don't see very many ways we can lose. Please poke holes. If you see more ways than I've identified we can lose, tell me. And And I leaned into the fact that I was young. I said, let me show you why that plays to my advantage. Okay? It didn't work on everybody. Okay? Let me just say that straight. But it worked on enough people. We raised our first fund and then our second fund. Pretty much just me raised that entire 2 funds based on that. And it built me a track record. It built me credibility. Our first group of investors got a 64% return. The next 3 years, we got 62%, 47%, and 36% cash-on-cash returns in these 2. I kind of jumped to a fund. These funds were small though. They were more like a single asset fund to kind of structure. And it built me credibility. And now then I launched my third fund and we raised 8 figures on that. Where our fourth fund we just launched, we're hoping to do up to 9 figures. So you build upon this as a career. Think about this not in 2-year, 3-year timestamps. Think of this in 10 years, 15, 30, 50 years where you could be if you do this well. That's how I would lean in and at least one avenue to build credibility as a new fund manager. We might have gone over a little bit on 2 minutes, but hopefully that was useful. See you next video. Bye-bye.
