The easiest way for a limited partner to say no to a fund manager is to not return a phone call, said New York City Comptroller’s Office head of private equity Barry Miller at Dow Jones’ LP Summit Friday.
Searchlight Capital Partners co-founder Erol Uzumeri has been on both sides of that phone call.
Uzumeri highlighted the differences between the LP universe and what he jokingly referred to as “the dark side” in his comments at the Dow Jones event. His remarks came on the heels of his firm’s debut fundraise, which closed on more than $860 million in April.
“There were a number of factors in putting together a successful firm, and fundraise … but part of it was, it’s in the DNA of our firm to have an alignment of interest with [our investors],” he said. “Especially for a first time fund, relationships are critical as far as getting investors to commit.”
I'm always thinking of the lens of an LP
Before launching Searchlight, Uzumeri built up those relationships over seven years with the Ontario Teachers’ Pension Plan, where he headed the pension’s private equity programme. He left Ontario in May 2010.
His exit mirrored those of several of his peers in the US; an exodus of talent from public pensions notoriously referred to as the “brain drain”. Earlier this year, Christine Pastore left the New Jersey Division of Investment. Pastore had launched the pension system’s portfolio in 2005. Other pensions to lose heads of private equity recently include the Florida State Board of Administration, the Massachusetts Pension Reserves Investment Management Board and the Pennsylvania State Employees’ Retirement System.
However, Searchlight LPs may have benefitted from Uzumeri’s perspective. He attributed his lengthy experience as an investor to the firm’s success on the fundraising trail.
“I’m always thinking of the lens of an LP … thinking about issues of alignment, reporting,” he said. “No matter what you have in your limited partnership agreement, there will always be grey areas, and it’s how you address those … People had some legitimate concerns along the way, and we modified to that.”