Happy Thursday and welcome to another edition of Beyond TVPI.

Every GP has experienced it. One LP passes. Another becomes an anchor investor. A third asks for more information and then disappears. The surprising part is that they often made those decisions based on almost exactly the same information. This week, I explore what actually separates a “yes” from a “no”—and why it has far less to do with due diligence than most people think.

In Founders Corner, I share one of the biggest shifts I’ve noticed since starting FundFrame in 2024. Building software has become dramatically easier. The real competitive advantage has quietly moved somewhere else.

As always, if you have questions or comments I’d love to hear them! Just hit the reply button.

Enjoy the read,

Steffen

Every GP has lived through some version of this.

One LP passes. Another becomes an anchor. A third asks for more information and then goes quiet.

Same track record. Same management meetings. Same references. Same DDQ.

So how do smart, experienced investors, working from essentially the same information, end up so far apart?

The tempting explanation is that one of them saw something the others missed. Usually that’s not it. Manager selection isn’t an objective exercise where enough facts eventually force the answer. It’s an exercise in judgment.

By the time a fund reaches the onsite due diligence, most serious LPs are holding remarkably similar information.

They’ve spoken with the same partners. Reviewed the same portfolio. Called many of the same references. Understood the same economics.

The factual gap between two LPs is often surprisingly small.

The interpretation is where they split.

Five LPs can look at the same fact and see five different things. Just take these examples:

The facts haven’t moved. Only the lens has.

The bigger misconception is that a fund which clears diligence clears it for everyone.

It doesn’t.

Two LPs can both take the same manager all the way to onsite, both conclude the fund is good, and still land in different places - because they don’t believe the same things about what actually drives returns.

Good diligence doesn’t eliminate judgment. It simply ensures the judgment is being applied to the right facts.

Once you’ve reached that point, the decision increasingly reflects investment philosophy rather than information.

Every LP has one, whether they’ve written it down or not.

I certainly did.

Spending more than a decade investing primarily in buyout funds above €500 million, I generally preferred managers with more stable outcomes and a broader distribution of realized returns across portfolio companies, even if that occasionally meant giving up some upside. Someone investing in early-stage venture could quite reasonably arrive at the opposite conclusion.

Neither approach is objectively right. They’re different expressions of what each investor believes will produce the best long-term portfolio.

Some prize repeatability above everything. Others go looking for the manager who does it differently. Some weight sourcing heavily. Others care more about how the portfolio is built. Some want to see institutional maturity before they’ll commit; others believe that same maturity is where returns go to die.

None of that is a disagreement is inherently wrong.

It’s a difference in philosophy - and philosophy is what ultimately turns a good fund into a yes.

When an LP passes, the instinct is to assume you failed to make the case.

Often it isn’t that simple.

Another manager filled the allocation before you got to the vote. The mandate shifted between first meeting and IC. The committee simply landed in a different place on risk than you’d have predicted from the room.

That’s frustrating to sit with. It’s also healthy. If every LP reached the same conclusion from the same file every time, there would be very little reason to staff independent investment teams at all.

The thing that took me a while to appreciate, after more than a decade on the LP side, is that manager selection was never about collecting enough facts until the answer revealed itself.

If it worked that way, every serious LP would own the same portfolio.

The facts are the starting point. The value sits in how they’re read, weighed, and turned into a decision.

That judgment - not the diligence behind it - is what makes the job worth doing. And will increase become the job of the allocator in the age of AI.

When I started FundFrame in 2024, the challenge was getting the technical foundations right. Building a secure, scalable product that actually worked was by far the hardest part. Everything after that felt like the cherry on top.

Two years later, it feels almost backwards.

Getting software to work has become dramatically easier. AI has lowered the cost of implementation in ways I wouldn’t have imagined when we started.

The difficult part now is deciding what should be built in the first place.

That comes from understanding real workflows, having product taste, and making thousands of small judgment calls that no specification can fully capture.

In many ways, it’s remarkably similar to investing.

Once everyone has access to the same information - and increasingly the same tools - the differentiator becomes judgment.

This newsletter is written by Steffen Risager, the founder of FundFrame, a platform for LPs to manage their private markets investments.

Before that, Steffen was CIO at Advantage Investment Partners, a Danish Fund-of-Funds.

Steffen has a decade of experience as an LP, and has made commitments totalling approx. $6bn across fund- and co-investments.