As a member of the Church Commissioners’ private equity team, Daniel Kylander brings a seasoned perspective on what distinguishes fund managers, especially in terms of tech-enabled diligence, brand credibility, and effective engagement strategies.

In this fast five interview, Daniel shares insights into the qualities he values most in fund managers and how brand builders and capital raisers can better engage sophisticated institutional LPs.

About Daniel Kylander
Daniel is responsible for helping manage a substantial endowment, with a focus on investments that align both financially and ethically with the mission of the Church of England. His role emphasizes a long-term view, considering not just financial returns but also sustainability and mission alignment.

Daniel has extensive skills and experience in private equity manager selection, due diligence, and portfolio construction. He began his career with Cambridge Associates where he helped advise US and UK endowments and pensions on alternative asset allocation and portfolio construction. Daniel holds an MSc from the University of Oxford and a BA from Durham University.

Impact of Brand and Reputation in a Crowded Market

With thousands of funds currently in the market, differentiation has become more critical than ever. In such a competitive environment, a fund manager’s brand and reputation can be powerful tools in standing out and attracting LP interest. Understanding the weight these factors carry in the decision-making process is essential for capital raisers and brand builders aiming to make a lasting impact.

In your experience, what brand attributes do you find most compelling when evaluating fund managers, and what are some of the most common brand missteps that GPs make?

In an increasingly competitive environment, specialisation and differentiation have become fundamental brand requirements for success. While there are always exceptions to the rule, we believe that sector-focused funds typically outperform generalist managers. The more specialized the sector, the more potential for alpha generation. Examples of this include funds that are exclusively focused on healthcare, technology, and sports; all highly technical domains where knowledge and networks matter.
Specialisation can also pertain to geographic focus where managers will invest in a specific geography and by doing so provide a differentiated offering not only to their limited partners but also the founders and entrepreneurs who look to partner with regional experts they know and trust. Examples of this include funds that exclusively invest in the Nordics, Benelux, or Iberia. Geographic expansion in a GP’s mandate should be done gradually and only when there is a strong rationale for doing so as it often requires significant team expansion which can come with its own risks.
The biggest brand missteps we see are managers looking to do too much too fast. This recurring phenomenon presents itself as rapid team expansion with a lot of external hires, significant fund size growth, or shifting a mandate’s core geographic or sector focus. It’s better to know your expertise and your own limitations to avoid becoming a jack of all trades but master of none.

Leveraging Technology in Due Diligence:

How has the rise of industry-specific technology transformed the way institutional investors assess potential fund managers? What advice would you give GPs on engaging effectively with tech-savvy LPs during the fundraising process?

As technology increasingly eliminates burdensome aspects of quantitative due diligence coupled with the institutionalization of the broader industry through intermediaries, limited partners now have more time to assess the qualitative aspects of a manager. A strong track record of relative and absolute outperformance is still necessary but no longer a sufficient condition for garnering capital allocation.

Different limited partners will always have various critical financial and quantitative metrics they prioritize but across the board for all managers there will be an increase in data requests, both in quantity (given new market entrants) and in complexity (given increasing allocator sophistication).

Benchmarking tools are becoming increasingly sophisticated so managers should know how they stack up to their competition and anticipate these questions from potential investors. Furthermore, limited partners are increasingly leveraging highly customizable software solutions to expediate quantitative analysis so managers should acknowledge this trend and be flexible with new data requests.

Role of Social Media

As digital presence becomes increasingly critical, social media platforms offer a powerful channel for fund managers to showcase their brand and engage with potential investors. However, not all content resonates equally with LPs. For those building brands in the private markets, it’s crucial to know what works.

How do social media platforms influence your evaluation of private equity firms or fund managers? Are there particular platforms or types of content that you find most valuable?

The proliferation of social media across all our personal and professional lives is undeniable. Having a powerful digital footprint on global platforms like LinkedIn can indeed be beneficial for individuals and fund manager’s personal brand, albeit the maxim of quality over quantity rings true now more than ever.

In our portfolio, several managers have highly sophisticated data rooms with dynamic content including videos of portfolio company CEOs or quarterly reporting presentations. The more interactive and tailored the content is, the more likely existing and prospective limited partners will engage with it. With the rise of private wealth channels looking to get exposure to private equity, managers should also leverage social media to share educational content.

Long-Term Relationship Building

When you look for long-term partners, what characteristics in fund managers indicate that they’ll be able to adapt and grow in alignment with an LP’s evolving needs? What can GPs do early on to set the foundation for a lasting relationship?

Culture, reputation, and other intangible criteria are becoming increasingly important predictors of long-term success. The broader alternatives space continues to be a people driven ecosystem where strong teams are the most important factor in driving strong returns. As such, fund managers need to carefully construct their organizations to ensure they have not only the bandwidth and expertise to execute their current strategy but can also anticipate the evolving needs of both the limited partners but also their underlying portfolio companies. GPs should focus on building talent from within with dedicated professionals in sourcing, value creation, ESG, and investor relations .
Trust between the GP and LP is something that takes a long time to build but can be broken so quickly. Fund managers need to continue to prioritize transparency, proactive reporting of any changes (either at the organizational level or at the underlying portfolio company level), and be willing to embrace self-reflection.

Advice for New and Emerging Fund Managers

For emerging fund managers in particular, what would you say are the top priorities for building credibility and trust with institutional LPs like the Church Commissioners?

Building on what I said earlier, emerging managers should acknowledge that trust is the fundamental building block with of all relationships. Emerging managers often lack the team bandwidth and resourcing that their larger counterparts do with respect to marketing or fundraising; however, they can pitch themselves as the new kid on the block ready to go after a niche where they have a right to win, but they need to have a convincing story.

Unlike their larger counterparts, they don’t have to think about reinventing themselves or worry about generational transition; however, they need to demonstrate a track record (either at their prior shop or on a deal-by-deal basis) that will be relevant for the future strategy they seek to execute. Furthermore, they need to be clear and realistic about what their goals are and what their plan is as they evolve and institutionalize.

Bonus question

Thinking beyond the private markets, what is your all time favorite brand and why?

One of my favorite brands of all time is the Boston Red Sox iconic baseball cap. It has a classic red-letter B print on a dark blue hat that is distinctly recognizable and truly global. Whenever I’m walking around London or visiting another city, without fail I will see someone wearing one.

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The LP Perspective: Fast Five with Daniel Kylander, Investment Team – Private Equity, Church Commissioners for England