Chris Mahatma is a Principal on the Cloverlay Investment Team. Prior to joining Cloverlay, Chris was with LLR Partners, a $2.5 billion growth equity and buyout firm. Chris was a member of the Financial Services investment team, responsible for the generation of investment theses, interaction with operating partners, identification of and contact with potential investment opportunities, detailed industry research, construction of financial and operating models, and composition of letters of intent, term sheets and investment presentations. Prior to LLR, Chris was a member of the private equity investment team at Morgan Stanley Alternative Investment Partners (AIP), a division of Morgan Stanley’s institutional asset management business. Prior to AIP, Chris was an analyst at Standard & Poor’s, responsible for modeling residential and commercial mortgage securitizations.

Business Today (Reade Ben): Your career path has been incredibly diverse, from your time with LLR Partners, to your time in Private Equity at Morgan Stanley Investment Management, to working as an analyst at Standard and Poor’s, you have done it all.  If you had to pick one position from your past, excluding your current, which one would you say is the most valuable and why?

Chris Mahatma: Probably my Morgan Stanley experience. It was the most enjoyable due to diversity, range, and real-world exposure it gave me in private equity across different sectors and geographies. Getting that range of exposure and being trained by intellectually curious professionals was very enjoyable and valuable. From a career perspective, having that early, diverse, on-the-job training served me well both at LLR and here at Cloverlay. 

BT: How would you say that your role in advising clients contributes to fostering a closer relationship between Cloverlay and its companies? 

CM: At Cloverlay, we’re managing relationships and building bonds that occurs at the private equity fund level. Fostering a closer relationship with managers that are helping us invest our capital within certain specialized strategies is valuable for us at Cloverlay. It’s about building brand and a reputation in particular sectors to be able to get a look at different opportunities. From a diversification standpoint, we invest across a variety of sectors and strategies as part of our broader mandate. This allows us to maintain portfolio diversification as well as enriching our company through cross-cultural dialogue and diversity in thought. 

BT: Now it sounds like you guys cast a very wide net. With all the people and companies you deal with it, it sounds like it could be a very arduous selection process. I was wondering if you could give a quick crash course version of that process, and maybe talk about the length of the process or the part you find the most fruitful.

CM: It is something that’s brought up a lot. Prospective clients and current investors say - “it seems that you guys cover a lot of ground: how do you guys do that?”

The one thing that tends to tie different verticals together is that all of them have some sort of asset underpinning, whether it’s tangible assets or intangible assets. That provides us with an initial screen in the types of opportunities we are looking at. 

[The] filtering and selection process can run anywhere from six weeks to two years. Six weeks involves opportunities where the relationship with the deal sponsor has already been established. That comprises financial analysis, modeling returns, industry analysis, the market landscape, the capital supply and demand of landscape, management team’s experience, and how that experience interfaces with broader economic dynamics. It also includes speaking with industry experts and people who know the management of the opportunity well. 

Then we move into the more in-depth process I mentioned and underwrite the industry in which they operate for broader economic dynamics. 

It is a process that can be compressed or expanded if it needs to be. 

BT: Given your impeccable track record, background, and current success, I was wondering, for the students out there that are hoping to also pursue asset management careers, what would you say are your top tips, codes of conduct, or rules to live by to be a successful type of Principal or someone involved in Private Equity.

CM: There are hard technical skills that are needed for mastering financial modeling. There are definitely more quantitatively and algorithmically-oriented asset management strategies, so if that is something you want to pursue you should definitely go into math or coding. But if you’re thinking about pursuing a career on the private side of asset management, then private equity might be best for you as it’s really a people-oriented business. In this industry, developing that social skill set and the ability to have a conversation and find common points of connection and build relationships is critical to long term success. That gives you first and last looks at deals and helps you get through diligencing where there is not a whole lot of public data. Really being able to underwrite an opportunity, knowing the right people to talk to, and getting behind closed doors sort of access to data -- that’s something for longer-term success. It’s really important to have a diversity of experiences, too. There is not one right academic or personality profile to be the person that does well in this business. Reading deeply and widely and developing that ability to cross the sea of information you are seeing and recognize patterns across a variety of sectors and strategies and disciplines has served me in good stead because it allows me to approach an investment opportunity from first principles.