Welcome to The Private Equity Podcast! In this episode, host Alex Rawlings talks with Javar Avery, President at Sun and Moon Capital. They delve into micro-cap investing's potential and the essential role of operational playbooks. Avery discusses the rationale behind focusing on smaller, often overlooked companies, detailing the importance of detailed due diligence and strategic deal-making. He highlights overcoming key risks, like key man risk, and maintaining owner engagement for success. The episode also touches on Avery's influences and reading recommendations, offering insights into effective strategies for micro-cap investment growth.

Breakdown:

[00:00] Javar Avery discusses the potential of investing in micro-cap companies and wonders why larger firms aren't more active in this space.
[00:15] The focus is on market competition, management, and team evaluation, introducing governance playbooks for strategic guidance.
[00:37] Introduction to Javar Avery and Sun and Moon Capital's focus on microcap investing, targeting companies with $1 million to $2 million of EBITDA.
[01:07] Exploring the opportunities and challenges in microcap investing, and Avery's emphasis on the use of playbooks for business implementation.
[01:37] Avery provides a brief overview of his background, his role at Sun and Moon Capital, and his personal life.
[02:59] Discussion on common mistakes in Private Equity and the necessity for having a clear rationale and strategy for deals.
[03:26] Avery shares an experience with a deal that lacked rationale and emphasizes the importance of having a structured due diligence process.
[04:47] The significance of playbooks in overcoming integration challenges and maintaining structured operations post-acquisition.
[06:35] Avery discusses his interest in micro-cap investing, influenced by recognizing the potential value and challenges in smaller businesses.
[08:30] Reasons behind choosing micro-cap investing include less competition, potential for significant value addition, and the unique challenges of smaller businesses.
[12:46] Details on Sun and Moon Capital's due diligence process, tailored to their investment rationale and focused on commercial, financial, and management evaluations.
[15:12] The ECE strategy used by Sun and Moon Capital to provide operational support without running the companies directly.
[17:06] Key risk factors in micro-cap investing, such as key man risk and concentration risks, and strategies to mitigate these risks including retaining skin in the game for owners.
[19:34] Avery shares his reading interests, emphasizing autobiographies, business insights from books like "Moneyball," and his passion for learning outside his expertise.
[23:32] Recommendations for books and influences, highlighting the importance of different perspectives and personal development.
[28:14] Contact information for Javar Avery and an invitation for listeners interested in learning more or seeking investment opportunities to reach out.
[29:10] Closing remarks, thanking Javar Avery for his insights into micro-cap investing and the critical role of operational playbooks.

You can connect with Javar Avery on LinkedIn by visiting his LinkedIn Page.

Thank you for tuning in!

To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.

Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com.

Welcome to The Private Equity Podcast! In this episode, host Alex Rawlings talks with James Mackey, the Managing Director of Climate Investment. They discuss the advantages of a focused investment strategy for boosting deal flow and addressing the climate crisis. James highlights the importance of precise investment criteria in attracting impactful projects, especially in hard-to-abate sectors like heavy industry and transportation. He stresses the need for realistic assessments and data-driven decisions to scale investments effectively. The conversation offers key insights for investors aiming to contribute significantly to environmental sustainability through disciplined investment approaches.

Breakdown:

[00:00] James Mackey discusses deal flow and the selective nature of investments under Climate Investment's focused mandate.
[00:17] Highlighting how specific criteria and investment goals can increase deal flow, contrary to the belief it might limit opportunities.
[00:43] Shifting to the role of private equity and venture capital in addressing climate change through strategic investments in critical sectors.
[01:13] Introduction to James Mackey and his role at Climate Investment
[02:12] Mackey outlines his background and Climate Investment's mission for strategic decarbonization investments.
[03:07] Detailing Climate Investment's focus on sectors with high carbon footprints and the challenges in attracting necessary capital.
[04:07] Emphasizing the scale of impact and the targeted carbon reduction goals of their investments.
[05:05] Discussing the Oil and Gas Climate Initiative's evolution and its broader mission beyond the oil and gas sector.
[06:02] Exploring the engagement model with LPs and the success of pilot programs and commercial orders for portfolio companies.
[06:54] Addressing common mistakes in underestimating execution challenges and the importance of realistic goals.
[08:19] The necessity of data-driven approaches and asking critical questions to evaluate investment potential.
[09:18] Highlighting the importance of being data-driven in understanding the potential for disruption.
[12:08] The challenges in finding investments with significant carbon impact and the stringent selection criteria.
[14:33] Example of evaluating a plastics recycling business and its difficulty in meeting carbon impact requirements.
[16:28] Discussing Climate Investment's strict investment model, driven by clear focus and robust deal flow.
[19:24] On the current capital flow towards climate improvement and the need for more targeted investment in neglected sectors.
[22:20] Highlighting the mismatch between capital flow and emission sources, stressing the need for catalytic capital in emerging sectors.
[25:13] Discussing investment horizons, compensation models, and incentives for directing capital towards impactful solutions.
[26:11] Mackey shares his approach to staying informed through diverse news sources and listening to inspirational podcasts.
[28:04] Providing contact information for James Mackey for investment proposals or inquiries.

You can connect with James Mackey on LinkedIn by visiting his LinkedIn Page.

Thank you for tuning in!

To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.

Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com.

Welcome to The Private Equity Podcast! In this episode, host Alex Rawlings chats with Reuben Munger of Vision Ridge Partners about the intersection of Private Equity and sustainable investments, focusing on the electric transportation revolution. Munger, a pioneer in sustainable real assets, shares insights into transitioning from hedge funds to Private Equity with a sustainability lens, and the impact of electric vehicles and infrastructure on the environment and investment returns. Dive into this engaging discussion on how Vision Ridge Partners is leading the charge in sustainable investments, shaping a greener future through strategic, impactful projects.

Breakdown:

[00:00] Definition and focus on Vision Ridge Partners’ approach to investing in sustainable real assets.
[00:15] Discussion on building and owning charging systems, operating electric fleets, and the firm's role in sustainable investing.
[00:43] Insight into the focus on vehicle electrification, niche specialization in private equity, and the broad appeal of narrowing focus.
[01:09] Munger shares his journey from the hedge fund industry to private equity focusing on sustainability, managing over $3 billion across various sectors.
[01:39] Munger discusses the motivation behind the shift and the value of active ownership and sector-specific knowledge in private equity.
[03:02] Discussion on the need for infrastructure and real assets to become more sustainable, focusing on efficiency and lower resource intensity.
[04:29] Vision Ridge’s approach to investing in assets with a sustainable edge and the transition from "gray to green."
[06:40] How sustainability shapes Vision Ridge's investment strategy and decision-making process.
[07:39] Differences in sustainability mindsets between Europe and North America and how it affects investment strategies.
[10:05] Discussing unexpected opportunities and challenges in portfolio companies, emphasizing agility and innovation.
[11:55] How Vision Ridge’s focused approach has benefited the firm in terms of differentiation, expertise, and deal flow.
[16:18] Discussion on electrification in the transportation sector, including commercial vehicles and the impact on sustainability.
[21:38] Alex Rawlings mentions Raw Selection's role in private equity executive search and salary surveys.
[22:08] Insights into the transition towards electric ferries and the challenges of electrifying longer maritime routes.
[23:59] Exploration of competition and collaboration in the electrification of commercial vehicles.
[25:55] Munger shares his recommendations for podcasts, books, and resources that inspire him in the field of sustainable investing.
[28:51] Closing remarks and how to contact Reuben Munger for further discussion on sustainable real assets and electrification.

You can connect with Reuben Munger on LinkedIn by visiting his LinkedIn Page.

Thank you for tuning in!

To get the newest Private Equity episodes, you can subscribe on iTunes or Spotify here.

Lastly, if you have any feedback on the podcast or want to reach out to Alex with any questions, send an email to alex.rawlings@raw-selection.com.