Earlybird Welcomes Digital West Partner, Vincenzo Narciso
European Investor Relations in a New Fundraising Era
We recently announced Vincenzo (Enzo) Narciso as a new Partner, Investor Relations, in our Digital West team. Now we have an opportunity to learn from his experience, apply it to current market conditions, and discover his long-term goals at Earlybird.
Enzo splits his time between London and Berlin, bringing to Earlybird over 20 years of industry experience both as a Limited Partner and as an Investor Relations professional at several blue chip alternative firms including The Carlyle Group, Rhone, UBS and Adveq/Schroeders.
He has known our Co-Founders & Partners Hendrik Brandis and Christian Nagel since 2005 when he was responsible for the global Venture Capital program at Swiss Re. Vincenzo’s industry expertise, deep network, and strategic leadership skills mark the beginning of a new exciting chapter in the development of the Earlybird Digital West franchise.
Here’s our conversation to better understand European Investor Relations:
1) You spent a large portion of your career on the Limited Partner (LP) side; how was the transition to Investor Relations (IR)?
Having been an LP myself for many years helped me make a quick transition to IR. It gave me perspective on the market and competitors. Most importantly, it helped me relate and interact with LPs — understanding how they think, their processes, and their challenges.
I was fortunate to be part of the ‘old’ Carlyle and to work closely with David Rubenstein who is an exceptional individual and true visionary. Great professionals like Mike Arpey and Thomas Fousse also taught me a lot.
2) The past few years have seen exponential growth in private equity and venture capital. What’s the status of the fundraising market?
Indeed, the last few years have been busy in private markets. Returns have been strong which helped the asset class to grow and attract new investors, while existing ones increased their allocations to the asset class. Today, alternative investment is accepted as a mainstream asset class among both institutional and high net worth individuals. The issue lies with the supply of capital (from LPs) which has not grown as fast as the demand of capital (from General Partner, GPs); this has created a huge imbalance.
GPs have raised bigger funds and have compressed their fundraising cycles from 3–4 years to just 18 months. This has put enormous strain on the LPs who struggled even to keep up with ‘re-ups’ (investments with existing managers), let alone looking at new relationships. I don’t know how sustainable this is in the long term. LPs may have to start making tough decisions and the industry will have to go through a much-needed ‘Darwinian selection’.
3) How have IR and fundraising adjusted to this new world?
Fundraising and IR have evolved. Today they are quite different to what they were 10–15 years ago. The approach is much less ‘old fashioned sales’ and much more ‘facilitating’. It’s more professional, more systematic. LPs are very sophisticated and know exactly what they need and don’t need, to add to their existing portfolios. IR is therefore key to stay in front of the LPs, to understand their mentality, their asset allocations, and see if there could be a fit.
The role of an IR professional is to build a long-term relationship of trust and be a resource to the LPs. You need to know your portfolios as well as your colleagues in the investment team so that you can make every meeting count and be seen as someone who adds value. Smart GPs, even the ones with great track records, have now realized that IR is key to the success of any firm and have been investing in it.
4) You have spent many years with some very big players focusing on Private Equity. What made you want to join Earlybird?
First of all, the people. I’ve known Hendrik and Christian and Earlybird for 20 years, since my LP days. I have followed them from afar and been amazed by their progression over the past 2 decades. Aside from being great people, I admire their relentless desire to grow, improve and learn from any mistakes. You can’t do this for 25 years if you don’t have that fire inside that makes you special.
Second, during my LP days as a VC investor at Adveq and Swiss Re, I was fortunate to invest with top firms like Sequoia, IVP, NEA, Index, and Silverlake, to mention a few. This gave me an understanding of what it means to be a top VC. Success drives success. The more you win, the more you get to see the best deal flow and get to partner with great founders. Earlybird has reached that status in Europe; we now have somewhat of an unfair competitive advantage towards many other firms which is the key to success in our business. I wanted to be part of this great success story.
Finally, over the past few years, the European venture ecosystem has finally caught up with the US. We have amazing technology, great talent, and the mentality has changed. Younger generations are willing to take risks and failure is no longer a stigma. The best firms in European VC have generated great returns over the past few years, which underpins this positive trend. I believe European VC will continue to grow in the coming years.
5) What would you advise younger professionals thinking about starting a career in IR?
My general career advice to anyone starting out is to figure out a way to have fun, find reasons to wake up in the morning, and feel energized about the day ahead. Approach your job with passion and dedication and aim to excel in whatever you do. Work hard, stay curious. In PE/VC IR there isn’t a specific profile. People who are more extroverted tend to prefer distribution (client facing functions) while others are more keen on the project management side of the business. Generally, what matters is your attitude and openness to learn.
PE/VC is an industry which tends to be hard to break into from the outside. If you come in as a young graduate, I always recommend starting with project management in order to get a good understanding of the basics, the processes, ‘the plumbing’ so to speak. Then over time, people gradually move into more of a distribution role if that’s desired. Building long-term relationships with LPs and prioritizing those is always key.
6) Looking at the money that has flown into VC, valuations, and the correction in public tech stocks, one might argue this is not the right time to go into VC. How would you respond to that?
I’ve been in private markets for 20 years and I can’t remember a single time when people talked about how great valuations are, how easy it is to fundraise, or to generate great returns. The industry is more efficient today and we have a fiduciary responsibility towards our LPs to be the best at what we do, regardless of market conditions.
I’ve gone through 2 major financial crises in my career and looking back, my biggest regret was not investing enough during a downturn! Periods of dislocation create great opportunities. If you add to that the fact that innovation and technology are uncorrelated to financial cycles and will continue to accelerate, I am quite happy to be playing in the EU VC Champions League over the coming years.
Thanks, Enzo! Welcome aboard.
Interview edited by Elisheva Marcus
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