What A Managing Partner At Cedar Crest Capital Wishes They Knew Before Entering Private Equity
Kazem, a Managing Partner at Cedar Crest Capital, reveals a key lesson learned: deal activity varies significantly between private equity firms, with some focusing on fewer, high-quality investments while others pursue a higher volume. This necessitates a shift in mindset from simply wanting "to get your first closing down," to prioritizing "the right investment opportunity," a crucial aspect of developing a skilled investor's toolkit.
Private Equity, Investment Strategy, Deal Closing, Industry Analysis, Patience in Investment
Advizer Information
Name
Job Title
Company
Undergrad
Grad Programs
Majors
Industries
Job Functions
Traits
Kazem Harfouche
Managing Partner
Cedar Crest Capital
Arizona State University (ASU) - W. P. Carey
Finance
Finance (Banking, Fintech, Investing)
Finance
Video Highlights
1. The frequency of deal activity varies significantly between private equity firms. Some firms may only do a few deals per year, while others do many more. It's important to understand a firm's deal flow before joining.
2. There's a learning curve to developing an investor's mindset. It's better to wait for the right investment opportunity than to force deals.
3. Focus on building your investor toolkit and skills. This is more important than simply closing many deals. Patience and selectivity are key to successful investing.
Transcript
What have you learned about this role that you wish someone had told you before you entered the industry?
Something I didn't know about the private equity world is how deal activity works and how firms stay busy. Every firm is very different in terms of how many deals they do per year and what comes up.
Some firms sit back and wait for a golden opportunity to jump on a deal. This means you might not close a business for one, two, or even three years. As a young individual, you get pretty excited to get your first closing, second closing, third closing.
It's a challenge, right? You have to rewire your mindset. You don't want to be forced to do a deal; you want to sit back and wait for the right investment opportunity to jump in.
Some firms do 20, 30, 40 deals a year – it's just a different nature of the beast. You have to understand the firm's specific industry. More than anything, you're training your investor toolkit.
If you're sitting back and waiting for the right investment opportunities, it's a better way to look at an investment than just saying, "I want to do 20 per year." That doesn't make sense as a true investor.
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