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

What is a crucial tip Verdis Investment Management VP Jamie Rhode has for GPs from the LP's view?

28 Oct 2022 · 1 min

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In this interview excerpt, Verdis Investment Management Vice President Jamie Rhode explains a crucial tip for General Partners (GPs) from a Limited Partner (LP) perspective, focusing on family offices. He outlines two distinct family‑office models: (1) offices tied to an operating business that receive regular cash inflows (e.g., quarterly cash receipts) which must be actively deployed, and (2) standalone investment‑pool family offices, like Verdis, that manage a pool of capital without operating‑business cash flow. For the latter, the ability to meet capital calls depends on receiving distributions from the GP, making cash‑flow planning and timely distributions essential. Rhode emphasizes that GPs should understand these cash‑flow dynamics and structure fund distributions to align with LPs’ need to fund capital calls.

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What else do you wish that GPs knew coming from the LP perspective? So I think there's 2 key distinctions there, and I believe they're more related to family office world, especially because I think that that's a pretty opaque world. One, family office could be still involved in an operating business and receiving cash flow from that operating business. So they're receiving, you know, money monthly or quarterly that they need to actively deploy. So they could always have every quarter For example, $25 million of cash coming in that has to be deployed. Then there's another type of family office that's far removed from an operating business and just has a pool of capital that gets invested. We are the latter. So for us, because we've been around since 2004, to fund capital calls, I essentially need distributions. And so you really have to think about kind of the cash flow planning piece of that.