In twenty-five years, exactly one investor ever came back after a full redemption.
One.
At our peak, we had 114 investors — 100 in the funds and 14 managed accounts. Over the life of the business, with all the turnover, the real number was in the hundreds.
They redeemed for every reason you can imagine. In 2008, our leveraged share class returned 46 percent and we still had more redemptions than subscriptions that year.
And of all of them, one institutional investor redeemed in full and later came back.
I've thought about why the number is so close to zero, and I think the logic is simple.
If you perform well after they leave, coming back means admitting they were wrong — and buying back in after missing the upside. Almost nobody does that.
If you perform badly after they leave, they tell themselves they got out at exactly the right time. That feeling is permanent.
Either way, the door closes behind them.
I bring this up because a manager asked me about it recently. An investor had redeemed in full, and he wanted to know how to win them back.
My honest answer was: don't.
Not because it's impossible. Because the energy you spend on it is energy you're not spending on investors who haven't made up their minds about you yet.