Kasper Wichmann

Welcome to Balentic Edge. guest today is Diana Tenkova. Diana is the founder of Institution Quality, a leading platform curating top tier content and candid commentary on private equity and alternative investments. With years of experience across investor relations, fundraising and thought leadership, Diana has become a go-to voice for clarity and insight in a rapidly shifting market. In today’s conversation, we’ll dive into the recalibration of LP expectations, the credibility gap in GP marketing, and what it really means to stand out as an institutional quality fund in 2025. Welcome Diana.

Diana Tenkova 

Thank you so much, Kasper, for the lovely intro. Pleasure to be here.

Kasper Wichmann

Diana, you’ve worked closely with a number of GPs across fundraising, investor relations, capital strategy. But for our listeners, can you tell us a little bit about Institutional Quality? What are you trying to achieve and what motivated you to start it?

Diana Tenkova

Yeah, thank you for the question. Yes, institutional quality essentially was, I guess, a dream for a few years before becoming a reality. And that’s really because in my previous role, I used to speak to a lot of emerging managers, first-time funds that were looking for help, looking for access to investors. But especially for the GP/LP relationship, working with emerging managers becomes a very difficult task because of that perception of them being inexperienced, them being new. So essentially the possibilities that they have in terms of getting support on fundraising, investor relations, the universe for services for them is very limited. They’re pretty much left on their own.

For a number of years, I was thinking that there should be something that’s more adapted to where they are at, at the moment. So institutional quality was born to specifically support that group of fund managers that essentially are looking to get exposure. They’re looking to get these investors. They’re looking to build the businesses of their dreams, but need a little bit of support, specifically on the fundraising, on the positioning side as well. So finally I took the leap and here I am with institutional quality.

Kasper Wichmann

Well done to you for pursuing your dream. I really admire that. Can you also give us a little bit about your own background?

Diana Tenkova

Yeah. So I’ve spent 12 years working with institutional investors, family offices, managers, around CapIntro meetings, which was great. And I’ve learned so much and I’ve been lucky that I actually wasn’t directly linked. To a specific fund management company within the distribution team, because I think every company has their own rules in terms of how things should be done. But I’ve seen how hundreds of funds are doing it. And also I was able to get feedback from a variety of LPs, being a family office or an insurance company or a pension fund. So it was interesting to see. A lot of the dynamics around how funds are presented to these investors, how the investors react to the different offering, and sometimes those little things that can make a difference. So I feel quite lucky for being able to work and support quite a big variety of fund managers in their, pursuit of capital and relationships. So that was a really, really valuable period in my career and really what brought me to where I am today. So essentially the whole offering is around the right funds sitting in front of the right investors.

Kasper Wichmann

Yeah, I’m going to double click on that a little bit later, but you told me just before we jumped on that you’re growing and have launched a new division, LinkedEquity Can you tell us a little bit about that and what the purpose is

Diana Tenkova

Yeah. So LinkedEquity I’m really excited about this new division because I’ve been blown away from the power of LinkedIn. You and I, we got to know each other from LinkedIn. And similarly, I’ve built some amazing relationships with people that I think I wouldn’t have been able to if it wasn’t for LinkedIn.

Kasper Wichmann

Thank you.

Diana Tenkova 

And I’ve seen how impactful LinkedIn can be for fund managers and especially emerging managers that don’t really have the massive marketing budgets to be everywhere all the time, like the bigger asset management firms. And LinkedIn gives them a voice and allows them to build relationships that

otherwise would be very difficult to build. So I launched LinkedEquity specifically to support fund managers around LinkedIn and helping them understand the platform better, treat it as what it is, which is actually a social network and not a broadcasting platform.

And yeah, I’m really excited about it.

Kasper Wichmann

Excellent. Well, I for one will be looking more into it and I look forward to seeing how it develops. Let’s dive into this. You work with emerging managers and we all think they have a role in the ecosystem. Yet many LPs would argue that backing emerging managers is a risky and inefficient bet. Track records are thin, teams are unproven, the risk adjusted return profile,

probably really doesn’t justify the extra effort you often have to do as an LP to commit. So Why should institutional capital, family offices and up pay attention to less established GPs, emerging managers, first, second time managers, call it what you want?

Diana Tenkova

Great question. I think there are four types of LPs out there, specifically for the emerging manager universe. There are the LPs that know they don’t want to invest with emerging managers. There is a second type, which is LPs that think they don’t want to invest with emerging managers.

There are the LPs that think they would like to invest with emerging managers, and there are the LPs that know they want to invest with emerging managers. And if you ask any of these…

for types of LPs for their reasons why they do or don’t invest with emerging managers. They’re going to give you some amazing reasons. And I think all of them are valid, right? I think it’s a wrong approach to try and convince, for example, that type of LP that no, they don’t want to invest with emerging managers. I think it’s a waste of time and effort.

to try and give them all the reasons why they should be investing with emerging managers. And it’s the same thing. You ask an LP that has a very clear strategy of investing with emerging managers, and they’re gonna give you some amazing reasons of why that is. So I’m really trying to say that we shouldn’t be trying to convince everyone that emerging managers are the best at, right?

Everyone has a point that is valid. But I think overall there is a misconception when we speak about emerging managers and this is what I’m essentially embracing as a mission to try and break that misconception, which is an emerging manager is somebody who has no idea what they’re doing, right? An emerging manager is somebody who is inexperienced, you know, just woke up one morning and thought,

You know what? I’m going to start a fund

Kasper Wichmann

Well, they exist as well, Diana, right? But it is a very small subset. can you define what are most emerging managers Where do they come from?

Diana Tenkova

Right. So from my experience it wasn’t an overnight decision. many of them left very comfortable jobs with bigger organizations, bigger asset managers. they left.

a secure paycheck, which is quite significant in many cases, to go and pursue their own fund business, typically these are people that saw a need in the market or something that they know how to do. Whether we speak about the specific niche sector or…

some specific inefficiencies even in the space that they were operating before and now they know they can make a difference so it’s that drive inside them that actually tells them okay you should go and do this obviously there could be many reasons of why somebody starts a fund but just from my experience it’s typically the case when there is a very strong belief that there is a need

for what is it that they’re offering in the market, So having said this, a lot of that misconception of somebody’s inexperience comes from the fact that many of the emerging managers, if they’re coming from the investment team or they have an investment background, they didn’t have to worry where the capital was coming from.

Okay. So when it comes to some of their, activities to the outside world, what it’s about their positioning, storytelling, digital presence. Tends to be very weak because they’ve just never done it before. And they can be amazing in terms of their, investment capabilities, but that other side is just.

makes it look like some of them don’t really know what they’re doing and it’s not the case. So this is what I’m trying to really act

against that misconception that if somebody is an emerging manager they have no idea what they’re doing. Obviously there are a lot of parts to managing a fund business that will be new to them but going back to those type of LPs that have a very clear understanding of what it means to invest with an emerging manager they have the right expectation as well from them in terms of certain parts of the

operation or the team building side et cetera, et cetera.

Kasper Wichmann

If you put your LP hat on, what are the pros of investing into an emerging manager and the cons what should they be aware of if they start considering this or maybe even already are doing this?

Diana Tenkova 

I think one of the main reasons for a lot of LPs to consider investing with emergency managers is the return profile, which tends to be, higher than some of the established managers. so I know there is a lot of debate around it, some

People say, there are certain factors that are not taken into account and it’s not precisely true. But the reality is that when there is a new fund, the willingness of the team to really make the best possible decisions because they want to prove themselves is unmatched, Much more than a team that can afford.

to make a mistake here and there. So I think there were a lot of LPs that appreciate that real focus and real discipline around how the investment decisions are made. And also in terms of some of the sectors that they invest in, a lot of sophisticated LPs that are really thinking about portfolio construction.

they are thinking about what are specific niches, specific areas that we’re not exposed to and that we should be exposed to, And they can get that very niche and specialized exposure through emerging managers, They’re opening new doors, new markets, new niches. And then speaking about the actual relationship and I guess also

the educational side. You could be very significant LP in a massive fund, but typically what you will get is maybe a quarterly report, maybe a few invitations to an LP event from that manager, they wouldn’t really, and I’m not saying that disrespectfully at all to the bigger manager, but it just,

The way that it is that you have to be really a massive investor in order for them to really invest and spend more time in educating you in terms of how the decisions were made or why specific investment didn’t perform as well as they thought they would. And with an emerging manager, an LP actually gets that. They get that education as well through the investment with them.

Because for that emerging manager, that LP, even if it’s with a smaller commitment, it plays a very important role in the fund, So the fund manager tends to have a much closer relationship with that LP and they tend to also lead them through the entire process of how things were done, why is this doing well, why is this doing not so well? And the LP gets that value add

of actually learning about the space and a sector that the GP, the fund manager is specialized in. So these are some of the, main reasons from an LP perspective. And then obviously there was the other side of the coin, which is essentially the risk.

perception of investing with an emerging manager, which is real. And it’s in many cases, due to the fact that obviously they don’t have a lot of previous track record to actually give that confidence. So the due diligence process is actually much more time consuming and complex from an LP perspective.

when it comes to reference calls, when it comes to due diligence on the operations, on the team, it can become quite a costly and time consuming process there are simply some LPs that don’t think it’s worth their time and effort to go through that due diligence process. And then obviously it’s just simply the fact that

There are some emerging managers that may be too niche for a specific LP, which could be a great benefit for somebody else. But there are some LPs that want to, let’s say, keep a more generalist strategy. So again, going back to that original point, there is a bit of everything. And I think all the perspectives are valid.

But let’s break some misconceptions that are out there.

Kasper Wichmann

Diana I want to zoom in a little bit on two things you said, the return profile and also risk. Because as an LP, I have actually backed first-time managers. One of the things I always struggled with is the fact that there is, conceptually at least, a mismatch or a misalignment between risk and return I’m being asked to take first-time manager risk, but my returns are, by and large, not going to be much higher versus a third, fourth, fifth, sixth time manager. And so always try to tell them, guys, you need to find a greater alignment. You’re asking me to take some “venture” risk. Yes, you’re a serial entrepreneur. You have some successes behind you, but you’re coming in here and asking what a buyout manager with 30 years of track record would ask for. What do you say to that? What do you say to your GPs in that regard? Because, you know, two and 20, yes, it may be market standard, but not everybody can command two and 20.

Diana Tenkova

I think LP alignment is crucial. It’s one of the most important aspects, I think, in any GP-LP relationship, not just for emerging managers, but even for more established firms. So you’re bringing a great point there, because I see some funds thinking investors are almost obliged to be interested in working with them just because it’s very innovative and the upside could be attractive. But you bring a very important point because there should be reasons beyond the actual return expectation of why an LP should invest with that money. 

And I think a lot of and GPs alike can do a much better job in speaking about these other aspects in a conversation apart from just the return profile, just as you said, the question that you asked. think this GP was lucky that you asked that question because many LPs think about it, never ask it, and the GP never thinks about even addressing something like this. So LP and GP alignment is crucial.

Kasper Wichmann

Going a little bit further, we hear lot about all funds are our first quarter funds. That’s hard to argue with the emerging manager, but at least they then want to be institutional grade. What does that mean to a GP and what does that actually mean then to an LP?

Diana Tenkova 

That’s also a great question. I think institutional grade nowadays has a very different meaning to what it meant five years ago, right? Five years ago, being institutional quality or institutional grade meant having billions in AUM, massive team working with the big four accountant.

Firms, et cetera, et cetera, right? Today, being institutional-grade and being institutional-quality has a different meaning. Today, you need to be as transparent as somebody with that institutional quality is, and this is something 100 % accessible for even emerging managers. You need to have discipline and a process around your investment decisions, just like a big asset manager would have very strict criteria in terms of what they say yes to and what they say no to. And this is what an investor, an LP expects from a fund that they will invest in. They want predictability, right? They want to know what could potentially go wrong and how will the fund manager

Address these kinds of situations? Do they have processes and policies in place to address that? And again, this is also something that is very accessible and easy for even an emerging manager to implement. And then I guess from an institutional quality perspective, we’re also speaking about scalability, Because from a bigger, more established firm, you would expect

That they have the capability of actually managing investor capital, where this capital can grow and they can go into new asset classes, new markets, or expand on their strategy, So an emerging manager, obviously at the point where they are now, they’re limited in terms of their ability to invest in certain amounts and certain regions, certain type, et cetera, et cetera. But that scalability is very important, right? Because for example, if you speak about venture capital and you’re gonna hear every single venture capital fund speaking about their unique network, But what are they doing to be expanding that unique?

network? well, where is the scalability or speaking about a very specific niche in the market? But then how big is that market and how much this market can can grow? And what’s their capability in terms of attracting and retaining team members? So all these aspects are very important. They’re linked to somebody being that institutional quality and I think all of them are very achievable, even from an emerging manager perspective.

Kasper Wichmann

Moving on a little bit, capital raising has changed a lot in the past four or five years. Arguably probably the hardest environment we’ve ever seen. You have seen hundreds of pitch decks and you’ve probably seen hundreds of pitches too. Where are GPs going wrong today

Diana Tenkova

I think just pitching the way the way fund managers were pitching 10 years ago, which is this is what we do and these are our returns. Do you want to invest? today, apart from this is what we do and these are our returns, you also need to speak about this is who we are.

This is why we’re doing this. This is why this matters. So everything around the why, which I see is missing from a of the fund managers. And I think LPs are hungry to hear about those whys and they want to know more about the team and what made them start the fund.

What are their values and how they operate as a team and what are some mistakes that they’ve made in the past and what is it that they’re doing to make sure they will not make these mistakes again and why is the need for this fund in the market? And then also in terms of actually their message.

being distributed, There are still a lot of funds that think, we’re building something that is very good, so LPs will come to us. Which, you know, in some environments, some years ago, was true that LPs had a lot of, let’s say, outbound requests to GPs, where they would have…

significant research teams that will actually reach out to the GP, whenever there was a good opportunity in the market. But nowadays, there are so many funds and so many options that unless you’re going out there with a message that is differentiated, that is clear, and that is appealing to investors, the likelihood of somebody knocking on your door just because you build something good is very low.

Kasper Wichmann

No, here I think I’m stealing a comment you had at one point. Okay, so you have a fund. Why should I care as an LP?

Diana Tenkova 

Exactly, exactly. So if you’re not able to answer this question, you’re gonna have a difficult time. But you shouldn’t be waiting for an LP to ask you, why should I care? You should be building a story publicly so that LPs actually see and understand why this matters and

why they should get involved.

Kasper Wichmann

So let’s zoom in on that because we live in a world of noise. There’s very little signal. LPs are overwhelmed. So how do they do that? How does a GP cut through this noise? What kind of channel should they be using? And how do they, build their credibility with LPs?

Diana Tenkova 

Great question. So first of all, there were a lot of different aspects within a fund that people are not immediately thinking about. So obviously, the first most important aspect is the investment thesis. So the investment thesis is typically what will take a very big part of the pitch deck. So investors can understand about the investment thesis.

But then there other aspects that are very important that unless somebody is reading your pitch deck, they wouldn’t really know about these other aspects, which is, for example, the team, What was the experience of that team? How do they actually think about specific conditions in the market? How is it that they’re making certain investment decisions?

Are they being authentic? Are they being transparent? How are they impacted by, let’s say, certain events that are happening in the world? And also, what is it that matters to them in terms of their relationships with investors, their relationships with the companies that they invest in, with their relationships with the partners that they partner with? So this is something

that they can do through storytelling. And that storytelling needs to happen at places that LPs can actually hear that story. there are various channels that a GP can use to tell that story. podcasts, for example, tends to be, an incredible channel for

for a GP to tell their story, but also to be able to involve other players in the industry and to be discussing specific opinions, trends, share their knowledge. But my favorite is still LinkedIn. because LinkedIn, imagine,

a fund manager going to a conference, what happens there, If you are lucky, you might get a speaking slot or you might get to participate in a panel if you’re lucky or if you pay a premium for sponsorship.

Um, so it’s an opportunity that everyone is looking for, because they want to be heard and they want to be seen as an expert. And if you’re also lucky within the audience, there’ll be some, LPs that are relevant for you. And will, that will leave that speaking session thinking, I really like this person. And I think, you know, they’re such an expert in what they’re doing and it sounds interesting.

and they could come and approach you after this and say, I really enjoyed your speech and I think we should talk some more. So how scalable is this as a situation or how often can happen? And again, let’s remember we’re speaking about emerging managers that don’t tend to be invited so much to be the main speaker. Many of them cannot.

access the stage. So LinkedIn is that panel that you can have control over who is in the audience. You can be very specific in terms of who is in your network, And when you give a specific message, you should be thinking about am I giving the kind of message that I would give if I was speaking on a panel?

to the kind of audience that will listen to me and what is the impression that I want to leave.

Kasper Wichmann

This is very interesting, because if you look at the demographics of both GPs and LPs, I think it’s safe to say that social media is not something we grew up with. So what’s your best piece of advice for GPs coming out now to raise their funds? And maybe we’re also a little bit introvert. We’re not fully comfortable putting ourselves out there. So we are on LinkedIn, but we’re not…

We’re not joining the conversation. What’s the best piece of advice?

Diana Tenkova

I will speak from my experience because I did my post, I think, a year and something ago and I deleted it two minutes later because I got too scared that maybe people will judge me for what I said or it wasn’t good enough. So it took me another few days to actually do another post. So I know the beginning is scary because you think that people will judge you or you’re not really saying something that is so good that people will care, But that’s a bit the imposter syndrome, And you have to think about that if you don’t share these things, if you don’t share

how you think about certain investment decisions, how you see certain market trends, how you feel about your values. then it’s impossible for somebody who doesn’t know you to look at this and say, I agree.

And this is exactly what you’re looking for, because there will be plenty of people. And that’s a little bit the surprise, because then after a while, you actually start getting that support, which then gives you more power for you to continue doing this, because you’re starting to build an audience. And your audience is essentially made up of like-minded people. And that’s exactly what you need when you’re trying to build something from scratch.

Kasper Wichmann

It’s interesting, right, because what you’re basically saying is that SuperReturn’s main stage begins to feel like a safe space versus taking the plunge on LinkedIn. But what GPs and maybe also argue the LPs need to do is to take a deep breath, dive into the deep end But

How do you strike a balance between the storytelling, the social media, and then the need to also be professional, transparent, and do investments? It’s a very demanding job. How do you divide your time there? What would you advise a GP on this one?

Diana Tenkova

So first of all, managers need to need to understand what it takes right before they even go out there and launch a fund. They need to be prepared mentally that they need not 24 hours in a day they need a day of 54 hours, right, which doesn’t exist. there are certain activities that will be crucial. So the urgent and important, then the important not urgent, etc. etc. Right? So they need to be very, very specific in terms of where they’re spending their time. 

So when it comes to capital raising, fundraising, marketing activities, first of all, is making sure that whatever you’re doing, you’re doing on the right channel. because you can be, doing some

amazing blogs, for example, on your website, but if your website has no traffic and it doesn’t even show up on Google search, would that be the best use of your time? Probably not. So think about where are the channels that really you have the best opportunity to get your message across. So that’s number one. Number two is

Who are you trying to appeal to? So we spoke about those LPs that will not invest in emerging managers. So are you wasting time in trying to pitch these LPs and trying to get them to change their mind about why they’re not investing in emerging managers? Again, probably not the best use of your time. So really making sure that you know that your efforts are directed to the right people and distributed in the right channels. And then try and be as efficient as possible with these things.

Kasper Wichmann

I have to ask you also, and it’s a bit self-serving, but where do you think a channel such as Orca, our platform for LPs and GPs, where does that fit in for an emerging manager?

Diana Tenkova

You know, I’m a big fan of Orca ever since I saw Orca. I thought that was amazing, much needed in the market. Because again, we’re not living in a world where things just magically happen, If a GP is able to communicate clearly their message, their differentiation, their value And an LP can actually see this and understands why this is important to them and why they’ll be interested in this. Then they have a way to actually reach out to that GP and have a conversation

LPs are overloaded with information, pithces that are, just irrelevant, totally irrelevant for them. And the same for the GPs. They’re trying so many different things that again, they’re not being efficient with any of them. So I think a platform where everyone is very clear in terms of, that’s what I’m looking for.

And that’s what I’m offering. That’s who I am. And people can actually decide, yes, I want to know more. I think it’s so needed and so important.

Kasper Wichmann

I want to go back to fundraising What are you seeing out there? Is it going to get better or is it going to get worse?

Diana Tenkova

I think it’s going to get better. I’m very positive because I think from an LP perspective and what I’m seeing is that more and more LPs are opening up to the idea that there is so much value in working with specialized managers. And I’m not just speaking about ⁓ the new funds.

And from a GP perspective, because there is so much competition you can’t be mediocre anymore. You really need to do things well, which I think will also increase the level of commitments from LPs because every time the funds that actually make it to the market will be ones that are actually good ones and needed and have a very good potential. So I think these forces will drive an improved fundraising landscape.

Kasper Wichmann

That is a very positive note to end on, but we won’t end quite here. We have time for a short quick fire round.

One book, podcast that you’d recommend for an emerging manager to listen to or read?

Diana Tenkova

there is one and I actually shared it with with my network some time ago. a podcast from Thema, which is a fund the funds in the UK. there was a podcast with one of the co founders,

Kasper Wichmann

We’ll put the link into the notes.

Diana Tenkova 

the message that he was giving and the explanations and the insights from an LP perspective were just brilliant. And I think any emerging manager, any first time fund manager should listen to this.

Kasper Wichmann

Diana, we appreciate your time and the perspectives you brought. It’s really been a masterclass in what to think about whether you are an emerging manager or whether you’re thinking about or investing into emerging managers. Thank you so much for joining us on this Balentic Edge podcast.

Diana Tenkova

Thank you so much, Kasper. It was a real pleasure

Kasper Wichmann

And as always, thank you to our listeners for tuning in to Balentic Edge. See you next time.