In every market cycle, investors devote enormous energy to underwriting strategy, structure, alignment, and incentives. Term sheets are negotiated. Waterfalls are refined. Legal documents grow longer and more complex, often in the belief that enough precision and foresight can anticipate every outcome.
Yet time and again, the ultimate determinant of outcomes has little to do with structure at all.
It comes down to character.
Over the course of a career, investors inevitably encounter three types of managers. They appear across asset classes, geographies and market cycles. They differ not in sophistication or ambition, but in how they behave when circumstances change and incentives shift.
The good
These are managers who always honor their commitments — not because they are forced to, but because they believe it is the right thing to do.
They understand that contracts are a framework, not a shield. When circumstances change,
