How to Tell If a Capital Raiser's LP Relationships Are Real
Every capital formation candidate arrives with an LP list. Institutional allocators, consultants, family offices, RIA platforms, a few endowments. The list is not the truly useful part of the conversation & conversion.
What matters is which of those relationships the candidate built, which ones they inherited, and which ones will still take their call after they leave their current firm. Those are three different things, and most hiring processes never separate them.
Here is how we separate them.
Sourced vs. inherited
The first question is simple: which of these LPs did you originate, and which were already committed when you arrived?
Both have value. A capital raiser who has covered a large institutional book competently for six years knows how those organizations make decisions, who the gatekeepers are, and what a real objection sounds like vs. a polite deferral. That is a genuine skill.
But inherited coverage does not travel. When the candidate leaves, the LP's relationship is with the platform, the strategy, and the track record, not with the person who sent the quarterly update. If a sponsor hires for portability and gets coverage experience instead, the first two years look very different than expected.
Ask candidates to walk through the list and mark each name. Most will do it honestly. The ones who cannot draw the distinction at all are telling you something.
Who do you actually know there?
A relationship is with a person, not an institution. Ask for names and seats.
Good answers are specific and current: the senior person who runs the real assets sleeve, the associate who does the actual underwriting, the consultant who has to sign off before anything moves. Weaker answers stay at the institution level, or name someone who left the seat two years ago.
This is also where you learn whether the candidate has been selling into the organization or just attending its conferences.
When did you last speak, and what about?
Ask for the last three substantive LP conversations and what each one was about.
The answers separate active coverage from a dormant contact list quickly. A capital raiser in market talks to allocators about pacing, denominator issues, where the allocation is going next year, and what they are seeing on fees. Someone who has not raised in a while talks in generalities.
What have you personally closed?
Ask for the commitments the candidate was the deal lead on: which LP, what size, over what period, and what the internal split of credit was.
Capital raising is a team sport and credit is genuinely shared, so expect nuance here. What you are testing for is whether the candidate can describe the mechanics of getting a commitment over the line: the diligence sequence, the investment committee dynamics, the side letter negotiation, what nearly killed it. People who have closed can describe it in detail. People who have supported closings describe it in summary.
What happens to these relationships when you change firms?
It is a fair question and the good candidates have already thought about it.
The strongest answer is usually a small number of names the candidate is confident will take a meeting for a new strategy, plus a clear-eyed view that the rest is coverage knowledge rather than portable capital. That answer is more valuable than a long list presented as fully transferable, because it is the one that turns out to be true.
What this looks like in practice
For sponsors raising a fund on a defined timeline, the cost of a mis-hire in capital formation is not the fee or the salary. It is 12 to 18 months of a raise that did not happen, during which the market moved.
Arcana runs this diligence on every capital formation and investor relations search we take. We reference LP relationships with the LPs where we can, we track which candidates have closed vs. covered, and we tell clients plainly which parts of a candidate's network we think will travel and which will not.
