Insight
Bushey: Small funds cannot outsource fundraising to dedicated sales hires
“And then marketing, I would say, whatever you want to call it, business development, marketing, the truth of the matter is in a small firm, it's next to impossible to have someone else sell marketing.”
Insight
Bushey: Fund business risk stems from misaligned capital, not AUM size
“It's not necessarily size that's ever a part of the business risk. I think it's, if you have mismatch of expectations and your capital, that is what really creates business risk. It doesn't matter if you're five billion or ten billion or fifty billion or fifty…”
Opinion
Bushey: Traditional private equity auctions are an inefficient capital allocation method
“When I was in private equity, I was the associate in charge of handling sort of the mail would come in and you get. 15 companies to look at and you'd pick one and you'd go bid and there'd be 50 other bidders on that. And that just never struck me as an efficie…”
Assertion Not checkable as stated
Bushey: Quants at previous fund claimed losing over 5% was impossible
“At the firm I worked for, there were three Cambridge PhDs who would send me a spreadsheet saying it would be impossible to lose more than five percent of our portfolio.”
Insight
Bushey: Hedge fund AUM lacks the stability of private equity commitments
“Three billion dollars of capital is not the same as a three billion dollar private equity fund. And so as quickly as that goes up, even if performance isn't bad, it was primarily European fund-to-funds money, and that, that was a piggy bank very quickly”
Insight
Bushey: Mega-fund PMs have a distorted sense of raising outside capital
“I would say both of those experiences probably gave me a different sense of how hard it was to raise outside capital than it should have been. You didn't have to market. You just get a phone call being like, XYZ client wants to send you a large pile of money. …”
Insight
Bushey: Public small-caps trade at a 50% discount to PE multiples
“But in the public markets, especially in months like we just had in October, you're able to buy really great long-term outcomes for half off of a multiple you'd be willing to pay for in the private markets.”
Assertion Not checkable as stated
Bushey: 200 of first 300 allocators called Sunderland's strategy ludicrous
“I mean, of those 301st meetings I had, probably 200 of those people told me why what I was doing was ludicrous, and here's how they would do it, and here's what their funds do.”
Insight
Bushey: Allocator pushback tempts emerging managers to sound generic
“When you launch and you maybe are doing something that's not well understood in the market, you get a lot of pushback. And then maybe I would even say to myself that we kind of pulled back a little bit and we'd go into meetings and we'd start even being vaguer…”
Opinion
Bushey: Learning rudimentary DCF modeling in school has little real-world application
“Spending like a year of your life learning how to make a very rudimentary DCF model doesn't really apply in the real world so much.”
Disclosure
Bushey: Sunderland Capital launched after securing BlackRock fund's seed client
“And so I approached the client who seeded this fund at BlackRock and I said, would you support me if I did it independently? And I was really lucky that they said yes.”
Disclosure
Bushey: Sunderland Capital launched with capital in the teens of millions
“Gosh, it was in the teens of millions of dollars. I don't remember exactly, but it wasn't a lot.”
Disclosure
Bushey: Zero LPs called when Sunderland's largest position broke
“We had a deal that was going to happen and broke, and it was our largest position, and I didn't get a single phone call from one of our 50 LPs in a very bad month for our largest position, not one phone call.”
Disclosure
Bushey: Most of Sunderland Capital's 50 LPs are entrepreneurs or fund managers
“Even in what we do now, if you look at of our 50 LPs, most of them are entrepreneurs in some form and fashion. They either run an asset management business or have built their own company”
Disclosure
Bushey: Sunderland's Anchor Client Funded Its Institutional Infrastructure at Launch
“Our initial client was also very supportive of our business financially as well, so they were willing to help me spend the amount of money necessary to Set it up institutionally, and that was important to me. I didn't want to just get an office in the suburbs …”
