YouSaid · the spoken record

Stefan Kaluzny

lines on the record: 72
first: 2021-10-21
most recent: 2021-10-21
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“That's right. We tried to save money on our telephone bill by having voice over the internet in the 90s when you did it over some sort of cable television thing. And that was way, way, way ahead of its time. Both of us would have been great ideas if I just stuck with those ideas, but applying them to the grocery business turned out to be horribly, horribly underutilizing the idea. But I was drawn to the opportunity to take an existing business and do it dramatically better. And it turned out in that particular case that it wasn't especially financially rewarding for me, but we did build a business and we did create jobs and we did make a difference in 20 some odd communities in and around Chicago land. And I remain proud of that legacy, but I needed to move on. And so when I chose at that point, eight years out of business school, and as I said, I was a bit of a late bloomer along the way, I realized that the thing I wanted to do was to”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“hierarchy and there were fewer set and wrote steps that one needed to follow and there was the opportunity if one applied oneself and was skilled to move faster and I was drawn to that. The choice to be an entrepreneur after business school was on the one hand the madness of youth and on the other hand many of those same themes. I believe that we could do it better and that we could work harder and be more thoughtful about it and find a way to make a better mousetrap. This was a business we started in the 90s and there were a lot of things about it. We had a focus on the Hispanic customer at the time that no one in the world really understood or appreciated was the fastest growing demographic in America. We were 20 years too early.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, let's see. So, there's some meaningful things, and then there are some just the reality of life. So the introduction to management consulting was the first job I had out of college paid $2,500 more dollars a year than the other job I was offered out of college. $2,500 a year was $200 a month and $50 a week. And that was $10 a day. And that was lunch. And so that drove that decision. And I can't say I understood or knew much more. But I did choose to join a new consulting firm that had recently spun off of one of the traditional big shops. And there was a draw there for me even at 21 or 22 years old for the possibilities of the new. And that was a draw. And at the margin, I chose a path where there was less.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Exactly. It's not just there. We learned that in business school, too, I think. That's one of the complaints I've always had about business school HBS in general. They teach you how to do the job. You're going to have 30 years from now, not the job when you first come out of school. But all that stuff we learned there has so much to do with what we are doing right now and how we have to think about it to your point about how humans interact with each other and think about each other. I do love that your career path has been a winding road and so many of us went straight at it and you started out as a consultant and then you were an entrepreneur and then you made the transition into investment. What drove those decisions? Was it someone introducing you to the idea of a change or did you identify a problem and think I'm going to attack that problem this way? I just love to hear how you thought about each of those pretty significant transitions.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“An enormous amount of human behavior. It's not that one walks into a meeting and describes it that way, but it is that one can stop and frame the world and say, you know, is this person operating out of fear in the middle of last year's investment? Were we operating out of fear? Is this person making this decision out of honor? Are they just making a good business decision because it's in their interest and so on?”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“And spent a lot of time talking about, in this particular case, the origins of war in Thucydides. Thucydides described the causes of war. Wars are always fought out of honor, fear, or interest. And if you take that and take a step back and take the drama of war out of it for a moment and think about people and candidly think about investment decisions and candidly think about how people go about leading their business lives or negotiating framing many of those kinds of decisions around honor, how do I feel about myself? How do I appear? What do I look like? How does the world see me fear? I don't think that needs more description or interest. Interest being, do I make more money? Is it in my interest? And recognizing that those three very basic principles drive”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“The human beings with whom you are partnered. Our success rises and falls with our ability to identify and partner with and create an environment of success for great management teams. And we have done that over and over and over again. And whenever we haven't been as successful as we otherwise generally have been, it has been because we have stumbled with respect to management. There are universal truths that come out of any long classical education that I think apply and are helpful in understanding people as an example.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“So the classic speech is that liberal arts education enables one to think broadly about a wide range of subjects. And we're encouraged to learn how to think rather than to have rote memorization of specific skills. I guess I would say in early life in the intellectual pursuit is healthy and good. I probably from a dollars invested by age cohort would have gotten to the investment business earlier if I'd had the training earlier and I don't know that there are any special lessons that come out of a classics education or a history education, but there are things that I believe are universal truths that I think have come to be helpful in my business life. One of the things that I've learned is that success, at least in the leverage buyout business, in the private equity business as we practice it, is all or entirely about”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Really interesting. There's so much there that I need to delve in a little bit deeper on. But let's start first with the fact that you started out as a classics major or at least for some part of your time. I'm assuming that while you were in college, you were a more liberal arts major as opposed to a business major. How do you think that's informed your thinking?”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“And moved to California and joined a brand new nascent leverage buyout firm in San Francisco and began my investing career eight years after I'd gotten out of business school. So I was a late bloomer.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“And I found at Business School that that came naturally to me and one thing led to another. But even after business school, I rather than following a traditional path into the investment business, along with another classmate from business school, I chose to be an entrepreneur and I moved to Chicago and started a chain of inner city grocery stores serving poor black and Hispanic neighborhoods. This was in the early 90s when there was a lot of discussion of food deserts and the inability to obtain fresher, healthy food and challenged neighborhoods. And we built that business from zero to 100 and some odd million dollars in three or four years and learned more than I ever learned at business school, but ultimately found that it was not going to be my calling for the rest of my career. And so after six or seven years left that in the hands of a management team and stepped away.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“A whole host of reasons. And so when I was in college, I thought I was going to be a classics professor. I was interested in and majoring in Greek and Latin. And that was what I wanted to do. And a number of events in my life came to pass that pushed me on a different path. My parents have both passed away when I was very young, and so I found myself needing to look after myself a little more than I might have anticipated. that led me to a business job after college, which led me to choose to go to business school where you and I met. We won't say how many decades ago now.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm afraid I'm a first generation investor. By way of background, I grew up in New York City. I grew up on Lower East Side of Manhattan. My parents had come from very different worlds and had come together, I guess, first in a cold water flat on McDougall Street and then moved over to an apartment on Grand Street, which many, many years later I still own to remind me of a place and time a long time ago. I was fortunate in that I went to a series of great schools, but my parents, my father was originally trained as a pianist, and my mother was a teacher. And so began programming computers in the mid to late 60s. And so in many ways, both my parents came from a more academically oriented background. There were no investors and no business people.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'm so excited to spend some time talking with you and learning more about your story and sycamore partners. So let's start with your background. What influences in your life led you to be an investor? Do you have any family members who are investors or are you just the new Kalesne who is an investor?”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“A different underwriting, and it's not a strategy that's typical for us. And they are for sure managers that we give a lot of leeway to branch out into new directions, especially when we think that the other business gives them a leg up in being able to be successful in the ways that they're branching out. And so the stories you have to be told, I have to say that over the years, I've heard Stefan talk about other areas that he's thought about branching out into. I think he's very thoughtful about it. He'll come up with an idea. I think I can leverage this and I can be successful with this. He'll go down the road. If it turns out that it's not what he thought it was, you'll never hear about it again. So he brought up credit. I think he's exploring it. I don't know for sure that he's going to do credit, but I think that if he does it, it's because he's analyzed it and decided that there's an opportunity there. Because like I said, he's in the past named a number of things that he hasn't ultimately done.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“I have one more question, which is towards the end of your conversation, Stefan talked about potential product expansion into credit. How do you think about assessing your interest in rewriting the private equity strategy, whether you look at a distressed or credit strategy and how those fit together?”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Much better for him, but people's lives change. Success changes your risk profile. It can make it better, it can make it worse, but really trying to understand that. So we have to assume that it's a real full reunderwriting of the relationship because I don't. Want to be pro cyclical. I don't want to be the investor who says retail is bad, I don't want to invest in it. I want to say someone's going to make money in this bad environment. Can it be me? And is this the manager that can help me make money in this? I don't want to just run away from retail”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“It's constantly listening to lessons learned. If someone isn't speaking differently now than they were speaking 10 years ago, then they've not learned anything. It is going to be around how do you see the market differently than you see it before? How are you using the resources in the organization? You've made a lot of changes in the organization. It has grown significantly. Does that help you? Does that hurt you? I try to spend a lot of time talking about people's, especially Stefan his risk profile now. He's a different person than he was ten years ago. He's married, he has two children now, I think. Quite honestly, that is beautiful.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“It'll be interesting to see how it evolves over time because he's growing as an investor. It's a difficult space. He had a tremendous amount of success out the gate and now everything is different about retail. And so I think a re-underwriting by everybody is going to happen. So it's going to be really interesting.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Think it was because I was the most critical, ultimately. I actually went in with many more lists of, here are the things that we should be concerned about. Not to be overly specific, but has not managed a team before people who are new to managing teams will always think they can do better. They will have foot faults. Here are the list of foot faults I think that might be possible. Also, this is a person who is incredibly confident, not always sure he's going to be able to recognize the moments at which he's getting ahead of himself. Think about this. Here's some questions you need to ask. And also this fun size, is this an appropriate fun size for a new manager? Let's go back and do some work on that and what does that look like? So I think that I tried to get ahead of it by being very clear that I did not think this was a slam dunk. Here's all the things that I think we need to do a lot of work on. This underwriting happened when I was at Carnegie. It just so happens that he's also in the Columbia.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“And as you look at the way your team worked, knowing that you're the leader, them knowing that you had a friendly relationship with them, how do you think you were able to navigate kind of a clean process to get to a decision about sycamore?”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, I did know him when I was at business school, and I think that it helped actually my relationship with Golding Gate, where he was prior to starting sycamore, because at the time, there were many moments of angst there, and I had somebody who worked there who I could talk to and who always quieted it down. And so it worked really well. When he decided to leave and spin out to form his own firm, I tried to be very distant in the due diligence and say to people, look, I'm going to vouch for his intellect. I'm going to vouch for the fact that I think he's a good guy. Here are the things that I've noticed about him that I think we should pay attention to and do some work on, but I am not going to be actively involved in the due diligence process. And so the rest of the team took it and went. When there was a sticky question that they had a challenge getting the answer to or when there was a term that they didn't like, then they put me in.”
2021-10-21 · Capital Allocators · Stefan Kaluzny – Sycamore Partners [Manager Meetings, EP.16] · IDENTIFIED FROM THE TRANSCRIPT · source