YouSaid · the spoken record

José E. Feliciano

lines on the record: 79
first: 2023-02-13
most recent: 2023-02-13
sittings or episodes: 1
sources: podcast

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“Think sometimes conflict is okay. I think sometimes you have to be able to deal with conflict and work through it. And that makes you stronger and makes the relationship stronger with whoever it is, business personal relationships. I think if you got to raise that, some of that conflict comes because you have to be true to yourself in terms of avoiding or giving the easy answer. So we should learn that to you.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Many, many things, but I think perhaps the most important one relates to people, the most important and significant person that you're dealing with the same way that you would treat the person that cleans the floors and serves the food or cleans the bathroom or whatever. Work is honorable and people are people and we all have our stories. People respect that being deserved. And you never know. You never know that person that you touch and you meet that someday do something for you or will help you in some way. So I think it's that concept of treating people with respect. It doesn't matter who they are.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“One, sweetly, when the duck comes start to work on in the 90s and 90s failed, that was difficult. But in some respects, 2009 is a really difficult year. We were still in the midst of trying to raise our first institutional fund and markets were closed down. And there were times, particularly that first half of 2009, where go home and look in the barrier and say, you know what, this thing failed. We may not be around in a year or two. And that was difficult having absorbed one significant failure in your special career, I think I had the greater resiliency to do it again, but that'd be really disappointing and hurtful. Luckily, we pulled through, but there were really difficult moments during the great financial crisis.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“I truly believe that there might be one day somebody listening to it that may say, hey, that got into sound that smart. Providing that type of inspiration, I”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“First partner at Goldman Sachs in the group that I always am, he was actually a fellow Puerto Rican. And I was really getting to know Wall Street. And really, that was the world that I did not really understand. A few times he pulled me aside and just gave me right advice on how I really appreciate that. And then the other person that I would say, even though he's a friend, it's always a mentor, but not in the traditional sense. But Robert Smith is a person that I know for a long time. And as a fellow entrepreneur in his business, but also as a minority, he's African-American and Latino. He is somebody that from afar and sometimes close by, I've seen great different types of barriers. I think we all need role models like that, people that allow you to book up and say, gee, if he or she can do it, I can't. Oftentimes, there's a lot of reason I'm doing this podcast with you is.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“You are in the Muslim committee. I clearly would know that you showed me an upside case that includes a bunch of acquisitions that we haven't done that have not been identified, you're going to be called out for it. It's okay to have a buy and build strategy. It's okay to have a buy and model that incorporates that. But if they're not incorporated, you better show me with M&A and without M&A. You only show me the M&A case of stuff that's not identified, just a picture of your imagination. You won't hear from me.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“I still love turnarounds. I think they're probably some of the most challenging and intellectually stimulating types of investments where everything is possible. And as I always tell people, great turnaround investment ultimately is a growth investment because it's not fun understanding the bleeding first, stabilize the patient that they want to see grow. You want to see that investment flourish. So I still are probably like turnarounds.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“So the more somewhat active things they do like to play golf. I was struggling golfer. And then on the more quiet times, I'm a geek. So I love anything related to sci-fi, Star Trek, Star Wars.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“The most interesting trend out there that we have to think about is the different versions of permanent cattle. And that can mean a waterfront. There's a version of permanent capital that could be partnering or doing something with an insurance company that has a permanent source of capital. It could be products or fund structures like BDCs or RICs or variations of those products that are ever green products. Or it could be going public, for example, at the managing company. Those are all different variations, but it's generally the same theme, permanent capital. And our business, that is the Holy Grail, is something that we certainly spent some time thinking about. I honestly can't say that we have decided to do any of those things or that we are pursuing any of those things and earning this. But those are the type of things that I got to be.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“A great team that continues to provide great results and excitement for a great fan base, having a great product, great fans will allow us to have a great content that we can monetize from a media perspective. And then ultimately our betting also in the T-growth and expansion of the reach of the Premier League from a carbon media property perspective. And we think there's an incredible amount of upside for the industry premierly on that front. 500 to 800 million people per week watch it premierely and they watch the premier league 170 plus countries. That's amazing. We are product rate outside.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“So far, a limited amount of time. And then strategy wise, what are the things that we can do to make the team better, to make the club better? And we want to consider things outside of the box. Not that we've got to do all of that, but we want to think about the neighbor one goal, which is hopefully to.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Once you own the business, what are the best practices that we can facilitate? What terms of operations people have strategy? In this case, obvious need to bring more people because it was a T because of sections and other idiosyncratic reasons. It was not the best run operation that we had ever encountered. So we have been bringing in new talents. That's easy but challenging and it will take time to bring the type of talent that we want to the team in all areas, not only in the sporting side, but in the commercial side. It has meant how do we make the business more efficient? You have, again, an incredible team, incredible fan supporter base. We want to provide the best possible product, the best possible team on the pitch, but that requires a lot of face. That requires a world-class recruiting effort that requires a world-class data effort, analytics, et cetera. So we're trying to build all those things, albeit.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“To take us out of the running here, price was not the most important factor, speed, certainty, understanding of the situation, understanding how to turn a business around, perhaps. Those are actually more important considerations. And that enables us to prevail.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“former owner of Chelsea having to put the team up for sale. So situationally for us, Chelsea was essentially a forced auction by a forced seller, where however where a significant part of the traditional buyer universe for these type of assets was not allowed to bid. So if you were certainly a Russian billionaire, Arley were not getting a call from the bank, but even other perhaps natural bias for the asset were not able to participate happened very quickly. So SideChips basically kicked in in February and by May, real death might have May 31st last year to finish transactions. But a lot of things that aren't really play against us in the mass them like this, premium asset of where you only need one buyer to basically pay a really rented premium.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Revolves around monetizing content and using analytics monetize that content. It's all about ROI, things like that. When you look at the sports side of the world, sports world has been evolving. Baseball maybe being the best example of it. Using technology, analytics data to provide a better tea, a better product on the view or on the pitch, as we would say, for Chelsea. So when we looked from afar, 50,000 of you, a lot of the elements that we were seeing in some of our other businesses and some of our core sectors, particularly tech, were very similar to the core competencies at today's sports business requires. And then that caught a little bit of a very interesting situation in Chelsea led to the opportunity. Ronnie is worth spending 30 seconds on the background of the investment, the economic sanctions that the UK”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sports is at a fascinating world. It has to really now be called maybe more established, legitimate part of the investing world. When you think about the business of sports as a lot of analogs to other businesses, particularly actually tech related businesses, a lot of the revenue in a traditional major sports league team is actually recurring route and best locked it. A lot of that revenue is media related. So a lot of these properties think about them as such, they're really valuable renewable content essentially that is consumed by all the world. You look at top 100 programs consume where you launch in the US. I think the number is staggering. It's like 75 of them are NFL broadcast. So you have recurring revenue where a lot of the upset or a lot of the analysis.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“And then being aggressive when you find those opportunities, our investment Chelsea in some ways is a great example that very unique idiosyncrasic opportunity where it probably wouldn't be an opportunity unless four or five things happen, but they have and they provided an incredible opportunity for us that we have to match.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Let's look at the best opportunities that we're finding in our sectors. Let's analyze those. And let's only invest in the places where we have very high conviction. Today, that probably means there's very little going on in the traditional bio world, primarily because of the lack of financing. That really puts a dapper offense. And people are bringing businesses in traditional private equity options. Because why sell now? You don't have to. So our pipeline right now is used a little bit more into special situations. It made me bespoke transactions where we were basically providing either some type of debt instrument or structure equity instrument to a company to enable something, liquidity, position, something unique or secondary market primarily the stress opportunities that you might be interested. This is a time to be a little more selective, a little more picky, a little more to find that idiocy risk that we love and accompany.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Alpha Lapses, our biggest challenges for firm. And we're having widest funnel possible, perfect world. You see every opportunity to invest that exists in the world. And then the challenge is how do you narrow that really white funnel to things that are actionable? Some of that attrition happens because the circumstances in the market. We're at a point where clearly we're in the mess of a pricing interest rate environment. So I haven't seen a long time. There are generations of private equity investors and other types of investors haven't seen that period. And that's coupled with a period of high inflation of uncertainty kind of in the socio-political environment. And coupled with a lot of uncertainty about whether or not there's going to be a recession. What I would say is that this is a time when you have to be careful in those times you basically go back to fundamentals.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“And I said, you know well with manager that you know well and having that choice is fantastic we thank for our l piece and by the way it's not binary you get take some money off the table and reinvest the rest and multiple permutations about how you can do that but we have found that particularly LPs have sophisticated all investments practices or co-investment efforts they're getting increasingly comfortable analyzing these type of single asset integration vehicles and doing that And for us, there's also a different version of these evergreen funds. I know there was a lot of talk in our industry about evergreen funds. Seems like that's an idea that's still trying to flourish. It's been a little more difficult for LPs to really capture that. For us, this is a version of that. It may not be forever, but it gives a company another five to ten years of runway.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“At what price? Or you can roll egg. And when you roll into this vehicle, we're not only going to buying or transferring the company one vehicle to the other, but we're also going to provide significant additional capital for that company to be able to realize or crystallize the next chapter of growth or value creation in that business. And the good thing is that we have done five of them, total capital, roughly just shallow $10 billion in those five vehicles. And the first two have already returned all the capital back to the new investors. I think we have seen in their evolution about how RLPs are looking at this opportunity if they see at the beginning it was a little unusual and they were seeing G, but I don't have the ability to analyze this investment that this is different. I think by now a lot of our LP base has realized, you know what, we have an existing relationship with Clearlake. We know this asset might as well reinvest and continue.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Is that for whatever reason I have taken longer to sell, in some cases, maybe because they were challenging, there was something going on in these companies that made it a little bit more difficult to realize an accident, we looked at it completely different. We thought of continuation vehicles as a great vehicle for companies that were A plus accidents that we wouldn't mind only for a long time, maybe forever, certainly for a long time. And for whatever reason, we felt that even though we may have realized a lot of value already for the funds, the next chapter and the growth curve of that business might require more capital. What we did there is go to our LPs and like we always do have a very transparent, very straightforward conversation. This is what we bring this company needs. We will give you the LP the choice to continue with us in this journey so you can cash out now and you'll know exactly”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“The idea of contamination files BRL over really long time pretty much since the beginning of the secondaries portion of our business, the industry. Looked at it with a different lens. And the innovation that we introduced to the market, if you will, was this idea that you could do a single asset continuation vehicle, just to summarize it super quickly, what you're talking about here is taking an existing investment in a fund and dropping it down into a new SPV, into a new vehicle and bringing new investors, creating essentially a new fund with a single asset. And there are obviously lots of instances probably more prevalent to have continuation because they have multiple assets. And the way we looked at it is that these sort of not traditionally people thought about continuation vehicles towards the end of a fun life. And oftentimes they were the assets, the company.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Our strategy and so have to do that. We have gone through that lifecycle, if you will. I think what we have found in general is that if you're good to your partners, he'd want to be good to you as well, right? Having that dialogue is important, having transparency is important. I think we find Dial and Peter Sill that they're always trying to help trying to make us better. Having a window to what others are doing, when you want a phase that is difficult as a founder of a firm like this one, is that there's no manual out of user manual, there's no growth manual, there's some strategy that you can follow. So really talking to other peers, understanding what others are doing, understanding what best practices might be, understanding what the right benchmarks are, that's invaluable. Those guys have been really helpful in helping us out that journey. So it's been a really good experience for us.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“To create a base of permanent capital at the GP level that would be used to invest in our own funds. And the other thing is we always have the idea, right? We were more than just private equity firm that was going to raise falling one through whatever relevant normally. We did think that there was some synergies and some benefits of creating what now we have, which is multiple products under one umbrella. And for us, that meant that we always have the idea of the integrity competitor free from traditional private equity all the way to credit. Having that urban capital also, we thought would allow us to either buy or build something in the credit space, which at that point we had a hybrid fund that could do structure, equity, debt with warrants and other things, but we actually didn't have a pure play credit arm at that point. We felt that strategically, that would fit in very well.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Sergeant Lifecycle, or was we did the seed deal 10 years later, we actually bought back that stake with the help of a structured deal. And then a few years later, we actually partner with probably the two largest in the industry. We actually did a deal at the same time with Dial, Lu Capital, and Petersill, which is not a golden sack. And for us, it was fairly simple as we had grown. We actually had a fairly LP-friendly fund structure where a significant amount of R carry is in the European waterfall versus an American waterfall, meaning one, we have to return the whole fund versus a yield by yield basis. So what that meant is that as we were ramping up the investments in our own funds, we were not getting that many distributions. And you do have to meet capital goals with cash. So there were two primary reasons for us to pursue a GP stakes deal. One was”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“External impediments or structure, legal structure that would force us to do something or other. And by the time it went to Grace, our first institutional fund, then we had a much better idea what a still want to achieve with that one and what part of the strategy we wanted to focus on. It was an incredible opportunity for us. So they were great for us. Obviously, they own a significant amount of economics. So for LPs in particular, the idea of outside investors in a private equity fund 20 years ago was actually not as well understood and there was a little bit of resistance and a little pushback. To this day, there are LP segments of the LP world that build up that idea, don't love the idea that they look at it and they think, well, we think that that main misalignment incentive some ways. And there's still some elements of the LP base out there that really love the idea of a minority investor.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“In the seating world, or was a reservoir capital by Dan Stern and Craig Of, they provided us with that initial capital. Perhaps most importantly, having only one LP in that first fund allowed us to experiment. You look at that fund, quote unquote, it was set up as a fund. But it was almost an experiment, the idea where we did everything. Now we do, but under much larger umbrella and different fund structures, we did a little bit of everything back. We did a couple buyouts. We did a couple disrupt for control deals. We did a couple structure equity deals. We did a couple of rescue financing with warrants and things like that. So it was kind of a petry dish for us to experiment. Very few firms have that ability to respond to do that. Because if your first fund is institutional, fine, you are going to have a lot of pressure. Obviously, great track record to be able to”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the first step in our journey was starting the firm, and for us that meant how do we bring some of those elements that I talked about before, right? Sector expertise, ability to invest in press and economic or credit cycle, and operational expertise. How do you bring that all together as a startup firm? And very quickly, we determined, right, we were going to have to have a bigger team that also startup investment firms. And the best way of doing that was probably partnering with somebody. And that was difficult. entrepreneur took a little bit of a instinct of keeping 100% of every bank. Often tell this to entrepreneurs and this business much, much better. And we have a good example of that to own 7,500 or 80% of your business and be able to grow that business and scale that business and make that meaningful and only 100% of nothing. So in our case, we partnered with a firm that's fairly well known.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Develop is difficult. What makes it easier is that we have been together for so long. So I know in the case of my partner that I'm referring to, he's going to make the same decision pretty much that I'm going to make that I will have made 90% of the time. And we have the trust and we have built the rapport over time that that other 10% that might be in that gray line, we can talk about it. And that, I think, creates an environment where people feel like they're growing, they have enough autonomy, responsibility to imply interesting, but at the same time, we're not losing. We haven't lost whatever secret sells, whatever magic sells, clearly had five, ten years ago.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Or an interest he challenged in some respects. I'm never really sure if it's correlated necessarily with size, but it's people. We have had incredible consistency, a very little turnover amongst our team. So, for example, one of my partners that I work with very closely hired him 16 years ago. Second job out of school. He was a baby back then, but it's 16 years later. You cannot grow as a firm. You cannot succeed as a firm if you're not allowing your people to grow, develop professionally over that time period. So clearly what he's doing now is very different than when he was doing 16 years ago. We have a much bigger team. But for an entrepreneur, somebody like me and my co-founder and ultimately our first love was investing. Sometimes stepping back a little bit and creating that room for others to grow.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Clearly, the companies are a little bit bigger, but in a way parts of our job are easier now. Five, ten years ago, nobody knew clearly it was. Now I think chancellors are people in our world, you know who we are. We do fairly martial transactions. That means that we pay a lot of fees to a lot of banks and stuff like that. So we get our cost return a little faster now than we did five years ago. So I think those are all positive things. The companies that we're partnering with by and large have deeper benches, more sophisticated management teams. What we have found is that the type of change that we bring to the table is actually easier to point it now than it was five or ten years ago or smaller company. Not necessarily because these companies are embracing at any more or any less, but they have just a deeper edge and the ability to implement those changes and a little quicker than smaller companies. We also be the bigger challenge.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“You do the right things for your clients, in our case our LPs, over the long term that's going to benefit the farm. And we have subscribed to that. That has allowed us to scale in a way that for some has been surprising. We're a 17-year overnight success.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“So that was a magical combination where we were able to go back to our LPs, show them what we have to be able to do for them, not a theoretical basis, not in the mark-to-market basis, but distributions almost year in, year out, or increasing distributions for our funds. So that took us down this path. We were able to scale our business. At the same time that we were scaling our investment capabilities and doing that, demonstrating great results. At the core, I think that's extremely important. We always go back to that. Every single conversation with my co-founder, Bedek Bali, I have my other partners starts and ends up, how is this going to make clear Nick better? Not for us, but for LPs, because I still subscribe to what's a Goldman Sachs Niels, you have the 40 principles. I think Golden Steel has those. But one of them was that essentially, I was paraphrasing was.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“And at that point, we had a demonstrated track record. A team that happened together now for, again, almost a decade, and relationship provided LPs that had also encompassed most of our life cycle. We had a really powerful combinations. And at the same time, to be perfectly honest, it was an incredible time for private equity. I won't say never, but it was a time where barely been right in economic conditions, slow growth, but growth for a really extended period of time. You have really generous credit markets where credit was plentiful at really low rates and fairly flexible credit, meaning now that much in terms of covenant, et cetera. And equity valuations were sustaining a pretty sustained upward trend, particularly in some sectors. Some of those sectors happen to be the ones that we were experts in.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“At a time where there was a lot of changes in the world going to the great financial recession, et cetera, but it was actually a really difficult time to grow up as a firm, a financial investment firm. Not to be used to cliche, but made us a lot stronger those first five years. The next five years then were about kind of demonstrating that to market, if you will, right? This is a long-term business. The reality is that oftentimes you don't know how good or bad you are until five, ten years later. So really it was the investments that we did in that 2010 to, I would say that 2014 time frame that in hindsight were great investments. They were investments like the one I just described on SAGE. So I think in those second five years, if you will, clearly the existence, we demonstrated that we were able to apply all those lessons mart. Then you fast forward to gear.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Great question. Since history is written by the victim due to my version of what's happened for us, I bet there were a few elements that have come together over the past five or six years we spent the first probably five years of the firm cementing not only strategy but teeth and we did that”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“So you're going along running this business, and after a decade, you've got a nice business, call it two, three billion dollars under management, things are going well, and then you fast forward six years and somehow you're at $75 billion in assets. So what was the inflection to go from a good middle market flexible business to where you are today?”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Joint venture in Asia where they didn't control it, and over time, we got to control that. And we did all the blocking attack on that business. And then we actually sold it to a customer. Actually, customers slash supplier ended up making 10 times our money. It's certainly a great outcome. But at the core, I think it was the best of Player League in the sense that we identified an asset that people were not quite looking at it the way we were and we were able to bought that value or revenue potential. And a lot of the time, by the way, we were just listening to management and then tried to apply or borrow the best ideas. That's what we did.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“There are probably a couple that come to mind. I'll pick one in the industrial space. We partner with a business, coast say each other about it. Another sector's business in the world. They basically did automotive textiles. They have hecked as a carve-out out of a much smarter platform. Really tough time during the financial crisis. What we identified there is business had grant management team, a credible capabilities, but limited reach geographically or certainly geographically. And a great essentially distribution platform that could benefit from new technologies and new products. And in some respects, it was one of those investments that Einstein looks easy. You bought it that it really tracked with multiple. We partnered with the management team and we bought banks in Italy, Asia, and we did really innovative banks.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Maybe everything from MA to just looking at strategic growth map to product growth map, understanding what do we need, the geography, some type of technology or expertise. So understanding that and working with the imagination team to enhance that piece of the business. But out of the way, I think about OPS is very simple. You started kind of lessons learned. You use and builds that we have learned over the past 17 years and trying to memorialize them and institutionalize them so we can be systematic in the application. Only a great investment clearly getting that consistency. That's what we offer in every investment.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“I would de-mist it by sounds fancy, and I think our warrior stuff, you can put a trademark on LPS operations, people strategy. But I think of it as very simply, it's what we used to do when we were smaller and the companies were a little smaller. And they were the things that we used to do that flowed naturally. Lessons learned, all the accumulative lessons learned over time. And now we have tried to memorialize and we have to try to become more systematic about that is OPS and how we organize it is what we think are three significant elements of any business operations that may have to do with manufacturing efficiencies, it may have to do with supply chain, et cetera, which is a very significant aspect. We already discussed of any business. So it may be complementing the existing management team, bringing expertise that that team doesn't have, and then strategy.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Are really important equally as important. What is it that we're going to do? What is it that we're going to do differently to make that a bigger, a better business? And if you can say that, you can express that specifically. I'm not a big believer having these 200-page PowerPoint decks. Believe it or more, I think it was Mark Twain that said, I didn't have time to write you a short letter. So I wrote you a long one. So PowerPoint presentation is just You didn't have time to really digest kind of the information for the consumption of the committee because Lacey had just put out every PowerPoint or every slide that you could. That's not the way I like to invest or evaluate businesses. Let's really look at what really matters. And we're going to get difference there. And you can fix a lot of other things later on.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“That's interesting. Sometimes we'll get into that relative value game, if you will. But we really try to analyze every opportunity on a standalone basis The dialogue that we need to have here, clearly, and that obviously committee has to be brutally honest. So if you come to investment committee at Clear Lake with a fancy deck and it's all upside and the objections go up into the right and everything's great, you're probably going to come out a little bloody from that investing committee because invariably there's no perfect investments. So we spent, I think, appropriately so more time thinking about, okay, what's the potential downside of an investment? What are the trends? What are the negatives that we need to overcome? Ultimately, what we want to come up with is a fairly succinct idea about what really matters to that business. And what really matters, there will be a few of those things that are going to be positive, right? The business, the underlying market is growing significantly and man is plenty for. This company has a competitive mode that allows us to have a great margin, all those type of”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's like that. I think the best thing you got your own competencies with both the upper TTIPs out there and obviously try to create something that's differentiated”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“For example, some of our investments, and you'll see a theme about cybersecurity. We have been in that theme for a few years now. I think to groundbreaking, but aspects of that within cybersecurity that are really interesting, healthcare IT is something that we felt we have developed a great platform. We have done very well in the auto aftermarkets. Take you to a very different place. So we have developed themes within our larger industry sectors that we think have allowed us to differentiate ourselves and exploit meaning trends within those larger sectors. And then that goes back to how can we make that business better. We try to find companies where our skill set is particularly useful. In a typical year, we'll do 10 platforms, 10 investment platforms, but we'll do probably 40 to 50 ads. So companies are sectors where buy and build approach is prevalent or effective. We love those sectors.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“So it starts with the separate, right? Everybody else, you have a team, a business developer, sourcing professionals are talking to bankers, brokers, corporate development professionals. So that's what I would call private equity while one type of source. We do that because of our strategy, we have to talk to maybe different potential sources of deals with different than traditional private equities. We also talk to turnaround professionals. We'll talk to our structuring lawyers. We'll talk to the stress desk at Bolin Sachs or JP Morgan, et cetera. So our dialogue has to be broader dialogue than the typical strategy. Ultimately, though, we have to couple that with some thematic ideas. And we're not wed to those themes, if you will, but we from time to time like to revisit things that we have done well or what is it that we are good at and what is it that we're less good at.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“Change in those two or three or four things, we have found that the better the outcome. And then everything else is secondary. Is it better to vaccinate economy or that sector is growing? Yes. Is it better to invest the valuations in that sector are going up? Yes. Is it better to invest at a time where capital markets are plentiful and you can leverage the business at a low rate with no governance? Yes, yes, yes, yes. But it all starts from what is it that you're doing differently.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“In the early days, I will have told you this is separate that we know what company that we know well and we liked about Asian chat, let's go for it. Over time, we have learned that we need to answer a third question. And this is perhaps the most important question. What is it that IRT can do with that business and with that partnership with that Ashne team that is different than whatever everybody else is speaking or at least more nuanced or at least differentiate to change the inflection point of the growth curve of that business? What is that we're doing differently to make that a more valuable, more strategic, more interesting business? Not perhaps now, but in the year two, five years. And that we have found is what makes the difference between a mediocre investment and a good to great investment. The better we are and identifying the two or three or four things that really matter that business and then making”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source
“So, the very second on Clear Lake is very simple. We have best sectors that we know well, particularly tech and industrials, a little bit in the consumer space. We do that across an economic and credit cycle. We're able to do that because we do everything from a traditional buyout to turnarounds, carve outs all the way to distress. Yes, we're looking for value always, but most importantly, we're looking for companies that have a great potential for us to transform them into better and bigger businesses. And we do that through our operational framework called OPS. So at the end of the day, we buy companies in those sectors. We buy them through different entry points. We buy them with the best value we can. We really make them bigger and better. And we sell them at a more reported. And we do that consistently. UDLP will be happy and we, the GP will be the happy.”
2023-02-13 · Capital Allocators · José E. Feliciano – Flexible Private Market Investing at Clearlake (Capital Allocators, EP. 297) · IDENTIFIED FROM THE TRANSCRIPT · source