Sundheim Is The Man - D1 cap thoughts

Bloomberg put out a piece on D1 today. Tremendous amount of respect for Sundheim, he really dug himself out of a hole and has been killing it. To be down 20% and then finish the quarter down 3%, that takes some serious skill; I don't know of many who can do that. My claim to fame is I went to the same school :) hurrah hurrah no frat stuff tho haha. His buddy Plotkin is having some trouble. If you are interested in L/S, D1 should be on your list. Scaled from $4bn to 20 in THREE years...sheeeeesh. 

Does anyone know if D1 recruits from IB, or is it strictly MF PE and probably HBS I'm guessing? Put up 50% last year, and they probably have an investment team of what like 20-25 -- Sundheim at the top and then a bunch of analysts? Pay probably blows, guessing those analysts got juicy $1-5m bonuses last year. 

Also, how sick of a name is D1. 

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Comments (33)

  • Associate 1 in IB-M&A
Apr 21, 2021 - 9:22pm

Wonder how much of the returns is from stock picking versus beta and private markets/IPOs. Either way, it's impressive he came out of that hole. 

  • Prospect in IB-M&A
Apr 21, 2021 - 9:25pm

Are you saying he is lucky for his factor exposure?

  • Investment Analyst in HF - EquityHedge
Apr 22, 2021 - 10:05am

Dan is obviously an incredible investor. They have people from a variety of backgrounds, ex journalists, ex MFPE analysts/associates, analysts from MMHFs, ex bankers, Viking ppl that left with him, as well as quite a few people from the credit side at funds like Silver Point. Investment team is closer to 30-35 people.

Think you are exaggerating the comp for junior analysts there, like its been said, Junior analysts are viewed as a fixed cost before producing PnL and taking risk. Im sure some senior analysts made well over the numbers you outlined tho. Honestly who cares what comp is at a place like that, obviously its a great spot to work at no matter what. 

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  • Investment Analyst in HF - EquityHedge
Apr 22, 2021 - 11:16am

Sorry, I am not going to disclose people names on this forum. There are quite a few at really good funds tho, suprised me when I first heard about this trend.

You can find them on LinkedIn if you are really interested, just takes a bit of digging.

  • Investment Analyst in HF - EquityHedge
Apr 22, 2021 - 1:43pm

The reason for hiring journalists is pretty easy if you think about it. What is the role of an analyst at a hedge fund? They have two jobs, 1 to dig for/analyze information and find misconceptions in how the world/market views the information, 2 to convince the PM/firm to put on the position and be able to convey your conviction accurately. Enright explains this well on twitter.

A journalist does this in almost an identical manner, particularly financial crime journalists. They find sources for information and dig/analyze to find things out that other people dont know yet. They then have to convince people that the information they have found is correct and explain the ramifications on the world/why its worth printing.

Apr 22, 2021 - 3:36pm

Dan the man. Heard they had a crazy year last year, over 50% I think. Business Insider has a list of their VC investments, and I think several of them are going to IPO in the coming months. D1 is only like 3 years old, how much do you guys think an analyst that joined in 2018 made last year, what like $5m+? Maybe a junior analyst made like $1-2m. I think most analysts come from IB --> PE background, or maybe just IB

Funniest
  • Associate 1 in IB-M&A
Apr 22, 2021 - 3:38pm

gamergorilla61

Dan the man. Heard they had a crazy year last year, over 50% I think. Business Insider has a list of their VC investments, and I think several of them are going to IPO in the coming months. D1 is only like 3 years old, how much do you guys think an analyst that joined in 2018 made last year, what like $5m+? Maybe a junior analyst made like $1-2m. I think most analysts come from IB --> PE background, or maybe just IB

Here we go again..

  • Analyst 2 in IB - Ind
Apr 30, 2021 - 12:35am

No doubt he is a legend, but I'm a little confused about how so much of the fund can be in privates. Back in 08 when people were doing this it led to serious liquidity issues at the fund level and over 6 years later you are able to buy HF secondaries for illiquid privates that were still being wound down. Assume that most of the capital is external since their returns have been OK except for 2020, so probably $1-2bn is Dan's personally (heard he was worth about $500mm-$1bn by the time he left Viking). Unless it's locked up and the lock-ups are perpetually rolling, it seems kind of risky? Probably way above my pay grade and that's why Dan Sundheim is a legend and I'm on WSO.

  • Analyst 2 in IB - Gen
Apr 30, 2021 - 1:06am

You hit the nail on the head, they definitely have rolling lock-ups. Same reason why Melvin hasn't had to wind down even after their painful Q1.

Most Helpful
May 16, 2021 - 9:57pm

If I remember correctly, something about how he doesn't really see the rationale in having his squad spend time finding shorts. They're running something like $20bn, and as you get bigger, short alpha is gonna continue to diminish. Long alpha can grow with AUM, can't say the same for shorts bc the Enron type plays present themselves once in a blue moon. He's not against shorting, I think he said how it's positive for markets, he just doesn't see the need for his analysts to focus on it. Solution is put less of an emphasis on shorting for risk mgmt purposes (I guess Reddit really gave these guys a wake up call lmao)

On an "emotional level"- Dan said how he would rather help a founder @ one of his portcos scale their business, rather than finding flaws in businesses and shorting them.

  • Analyst 1 in IB - Restr
May 16, 2021 - 10:04pm

Fucking love this kid Shaq - bro where do you learn this shit 😂.. I wish you the best of luck at graduation and prom, if those things are still on for you with COVID. D1 needs to sign this kid lmao

  • PM in HF - Other
May 16, 2021 - 10:33pm

Shaq summarized pretty well. But the main thing he pointed out was "it was not a long painful short like tsla/hlf" the majority of pain happened in 2days ($500 squeeze). So he mentioned the learning was not to allow that to occur. In other words blow me up but I aint defending that shit nonstop. 
I mean the dudes who shorted $500 gme are prolly doing just fine, $7 not so much. While TSLA shorts just been dead forever.

  • Intern in PE - LBOs
May 16, 2021 - 10:06pm
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