I've spent the last few years helping to launch a quant fund, so I have a sense of what institutional investors look for. I'm impressed with the thought and hard work that went into Didact, but this guy never had a shot of attracting interest from the types of institutional investors who fund large quant funds.
The strategy has a 18% correlation to SPY, so "beating the market" is the wrong benchmark. The proper reference point is probably 0, when correlation is that low it shouldn't matter much whether the market's up or down.
The strategy had 14% return and .82 Sharpe ratio, so 17% vol. That's bad. With large asset levels and a long track record a Sharpe of 1 might be OK, for 1 year with minimal assets a Sharpe less than 2 isn't necessarily that impressive.
Another huge issue: this strategy was run with less than $1mm. It would certainly perform worse at higher asset levels as market impact becomes meaningful, the only question is how much worse.
Finally, results matter, but fund raising is primarily a sales process. Investors aren't just looking for the highest numbers. They're going to evaluate the people and processes involved, the risk management philosophy, really every aspect of the business. OP has some professional finance experience but it doesn't sound like he has the connections or reputation that would help with fund raising. If his sales pitch was anything like this article I don't think most institutional investors would be impressed (EG, minimal references to risk management, frequent comparisons to SPY performance when that's not an appropriate benchmark.)
