Paige Finn DohertyFounding Partner, Behind Genius · Founding Partner at Behind Genius Ventures

What commonalities has Verdis Investment Management VP Jamie Rhode seen with top performing GPs?

30 Oct 2022 · 1 min

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In this interview excerpt, Jamie Rhode (VP at Verdis Investment Management) explains that a key trait he observes in top‑performing general partners (GPs) is the speed at which they deploy capital. He notes that the best GPs tend to make their final investment within roughly 2.5–3 years of a fund’s inception rather than waiting five years. Because most private‑equity funds have a ten‑year life, investing earlier gives the portfolio company more years to compound, potentially delivering a higher terminal value. Consequently, faster deployment can lead to superior returns without requiring the investment to achieve an unusually high growth rate.

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What commonalities have you seen with your top-performing GPs so far?
Yeah, I think that, you know, this is always a really interesting question and I might get a little flak based off the market environment, but deploying capital faster. It sounds super weird. And when I say faster, I don't necessarily mean like a year. I mean like 2.5 to 3 years. Versus 5 years, for example. Mm-hmm. And when you think about it in terms of a 10-year fund life structure, if you write your last check into a new company in year 3, in theory, you have 7 years worth of compounding to get to a terminal value of X. But if you make your last investment in, say, year 5, you only have 5 years to get to a terminal value of X. So you need to find an investment that's compounding at a higher rate than the investment you would've made