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Peter Lacaillade: Why Now is the Best Time to Invest in Emerging Managers | E1096

Every single 20VC episode is recorded with Riverside.FM. It is the one product that I could not live without. Try it today here (https://creators.riverside.fm/20VC) and use the code 20VC for 15% off. ----------------------------------------------- Peter Lacaillade is a Managing Director @ SCS Financial Services where he leads its private investment program where he oversees the firm’s activities in private equity, opportunistic credit and private real assets. Peter has been an early backer of Thrive, Founders Fund, a16z, Greenoaks and 20VC. Before SCS, Peter was an Associate at HarbourVest Partners in its Secondary Group where he analyzed venture capital, growth equity and buyout investments. ----------------------------------------------- Timestamps: (0:00) Intro (00:44) Entry into SCS (03:00) Impact of 2011 Market Timing (13:38) Quick Assessment of Manager Quality (15:42) Insights into Peter's Role as an LP (18:05) Lessons from Mistaken Intuition (20:13) Funding Diversification Strategies (23:35) Analyzing Recent Vintage Performance (26:19) Evaluating Resources at Founders Fund (27:19) Ideal Timing for Onboarding New Managers (35:18) The Role of Direct Investing (39:59) Understanding GP and LP Differences (44:18) Capital Needs for Co-Investment Programs (48:32) Current LP Investment Attitudes (52:36) Liquidity Management Strategies (01:15:45) Quick-Fire Round ----------------------------------------------- In Today’s Episode with Peter Lacaillade We Discuss: 1. Becoming One of the Great LPs in Venture: How did Peter make his way into the world of fund investing as an LP? What does Peter know now that he wishes he had known when he started as an LP? Why does Peter believe now is the best time to be investing in newer, emerging managers? 2. How to Pick the Best Venture Managers: What are the commonalities in the best VCs Peter has invested in? How important is track record for Peter when evaluating managers? What mistakes has Peter made when it comes to manager selection? What did he learn? How do the best managers build relationships with their LPs? 3. Building a Portfolio That Can 5x: In a venture fund portfolio, what is the distribution between those that outperform, perform as planned and then underperform? How does Peter invest in both large franchises and emerging managers with a barbell approach? How much in established franchises and how much in emerging managers? Are managers actively marking down their portfolios in the last 18 months? Who has been the best at this and who has been the worst? How much should portfolios be marked down? How does Peter evaluate the compression of deployment timelines we saw in the last 18 months? 4. A Breakdown of the LP Landscape: Family Offices: What are the biggest dangers of having family offices as LPs? Why do multi-family offices tend to be better? Endowments: Are they really as stable as people think they are? What separates a good vs great endowment? Who stands out? Fund of Funds: Why does Peter think fund of funds deserve more credit? How should managers think about working with FoFs most effectively? What is the right level of concentration managers should have between these different LP profiles? What are the biggest mistakes emerging managers make when approaching LPs? ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Peter Lacaillade on Twitter: https://twitter.com/PeterLacaillade Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #VentureCapital #PeterLacaillade #SCSFinancial #harrystebbings

Peter LacailladeguestHarry Stebbingshost
Dec 17, 20231h 22mWatch on YouTube ↗

At a glance

WHAT IT’S REALLY ABOUT

Why Today’s LP Landscape Favors Agile Backers Of Emerging Managers

  1. Peter Lacaillade, a leading LP at SCS, explains why current market dislocation and LP pullbacks make this an unusually attractive time to back emerging managers, especially in venture and lower middle-market buyouts.
  2. He contrasts his multifamily office structure and incentives with those of pensions, endowments, and banks, arguing that many large pools of capital are structurally unable or unwilling to take the risks required to back the next generation of top managers.
  3. The conversation dives into how he evaluates GPs (emphasizing team quality and “force of nature” personalities over raw track record), constructs diversified portfolios of niche funds, and builds a scaled, fast-moving co-investment program.
  4. Lacaillade also covers secondaries, liquidity management, and the common mistakes both LPs and emerging managers make, arguing that thoughtful partner selection and long-term alignment matter more than chasing brand names or short-term optics.

IDEAS WORTH REMEMBERING

5 ideas

Now is an unusually good time to back emerging managers.

With many traditional LPs overallocated or structurally constrained, strong emerging managers are more accessible than they were in the 2016–2021 boom, allowing newer LP programs to gain entry to future franchise firms.

Track record matters, but team quality and strategy fit matter more.

Lacaillade treats historical returns as only the 4th or 5th-most important criterion; he prioritizes quality of team, clear competitive advantage, right-sized fund, and strong alignment over backward-looking performance.

Do targeted, off-list referencing to avoid echo chambers.

He assumes on-list references will all be positive and instead seeks off-list, trusted sources to surface nuanced weaknesses or risks, using soft questions to draw out what a manager really lacks.

Build a barbelled, highly diversified manager portfolio with focused underlying funds.

His model is 10–15 funds per vintage, mixing large franchises and small, highly concentrated specialists; across those, 3–5 funds exceed expectations, 3–5 meet them, and 1–3 underperform, still yielding attractive blended returns.

A scaled, fast, and selective co-investment program can materially boost net returns.

By co-investing only alongside top managers in their core areas, targeting 2.5–3.5x net base cases, and running a process that can say “yes” in 1–2 weeks, SCS gains fee savings, deeper insight, and better alignment without pretending to be a GP.

WORDS WORTH SAVING

5 quotes

We had a choice: go into the B-plus funds everyone could access, or pick the next‑gen emerging winners. We chose the latter.

— Peter Lacaillade

Track record is important, but for me it’s maybe number four or five on the list.

— Peter Lacaillade

If I do ten funds, three to five exceed expectations, three to five meet expectations, and one to three underperform—and you still make money.

— Peter Lacaillade

If you see a venture fund on a bank platform, holy shit—that is not a good sign.

— Peter Lacaillade

Funds last longer than the average marriage. Don’t just take the quick money.

— Peter Lacaillade

Peter’s career path and the early build-out of SCS’s private equity programWhy market timing now favors backing emerging and niche managersStructural weaknesses and incentives across LP types (pensions, endowments, banks, multifamily offices)How to evaluate GPs: team quality, “force of nature” founders, and off-list referencesPortfolio construction and diversification across funds and co-investmentsCo-investment strategy, process speed, and lessons from mistakesSecondaries, liquidity management, and why private equity penetration can still grow significantly

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