Sullivan: Firing PMs during drawdowns lets competitors benefit from their growth
Mark Sullivan · Mark Sullivan and Roberto Isch – Hedge Fund Investing at Wellington (EP.427) · Jan 16, 2025 · at 35:16
Mark Sullivan of Wellington Management discusses manager retention and why the firm provides longer evaluation horizons during drawdowns.
0:00 / 0:08exact quote · 8.9s
720p mp4 · rendered on demand · StarZero watermark
“The pressure of a drawdown often creates the innovation to get better. If you just fire people at that point, someone else gets the benefit.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Mark Sullivan
Sullivan: Hedge funds are the purest form of active management
“I think of it as the purest form of active management that exists in our industry. There's clarity of what you're trying to do. There was Indexes in long only that created inefficiencies and things that you had to do that weren't necessarily in pursuit of alph…”
Sullivan: Hedge fund industry tilts toward a mercenary P&L-driven model
“A lot of the hedge fund industry tilts more towards what I would describe as a more mercenary model and ties to most of the compensation models are specifically a hundred percent formulaic based on your piano and not much else.”
Sullivan: Global trade, capital, and labor mobility are reversing in new regime
“We're of the viewer living through a regime change, and that many of the characteristics that characterize the last 30 years or so, things like free movement of capital, free movement of labor, increasing global trade, that actually all these things are likely…”
Sullivan: Hedge fund asset growth is driven by performance, not new inflows
“Assets allocated to the hedge fund industry has increased, but that's largely been driven by
Performance of the funds themselves, not necessarily new money flowing into it.”
Sullivan: Institutional return-seeking capital shifted from hedge funds to private markets
“A lot of clients have been allocating to hedge funds for diversifying strategy that can give you a high sharp ratio, no correlation to market risk, et cetera.
That part of the market has grown dramatically over the last 10 plus years, and at the same time,
The…”
Sullivan: Fund-of-funds structures limit leverage efficiency, netting, and portfolio agility
“In our first and second generation approaches to Multistrat, we were largely relying on more fund-to-funds type structures, which have limitations in terms of the flexibility around
Your allocation process, the use of leverage efficiently, the benefits of nett…”