#30 Charlie Eaton - Pioneering the Placement Agent Industry

The Wall Street Lab

This week we are talking about the placement agent business in the alternative investments space. We could not have imagined finding a better person to discuss this topic with than Charles “Charlie” Eaton, the Founder of Eaton Partners and one of the pioneers of the whole industry. Charlie founded Eaton Partners in 1983 as one of the first and now one of the largest placement agents in the world. Eaton Partners was acquired by Stifel Financial in 2016.

According to Eaton Partners’ website, it has been widely recognized as the world’s leading placement agent. Since the firm’s founding in 1983, they have participated in raising over $100 billion of institutional capital across more than 125 highly differentiated investment funds, including private equity, private credit, real estate, real assets and hedge funds. Eaton Partners currently employs over 80 professionals in nine offices worldwide. We speak about the early days at Eaton Partners and how Charlie was able to experience first hand how the industry has evolved over the years. He discusses his “simple” formula for selecting fund managers and shares his views on what he thinks are attributes of successful fund managers. Charlie discusses how Eaton Partners is able to connect supply from fund managers and demand from investors, the increase in competition amongst investment managers and the challenge of partnering with the likely winners. He discusses how Eaton Partners has always been willing to make bets on first-time fund managers and how that has led to very successful fundraises over the years.

The topics discussed include: 10:00 – the early days of the placement agent industry 16:00 – Charlie’s simple rules for selecting fund managers 18:00 – lessons learned from fundraising missteps 24:00 – The current state of the placement agent industry 27:00 – the impact of the Global Financial Crisis on the Eaton Partners 29:00 – Eaton’s early decision to open an office in Mainland China 33:00 – Stifel Financials’ acquisition 35:00 – Balancing the interests of GPs and LPs 40:00 – challenges of raising capital 47:00 – Taking risks and betting on 1st-time funds 51:00 – Characteristics of successful money managers 53:00 – The future of the Placement industry

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Luke, Leo & Andy