We're Hiring!

Private Equity Analyst/Associate Opportunity

Fund Description: Catalus Capital is a multi-strategy private equity firm founded in early 2011.  Catalus recently raised its second fund, Catalus Growth Partners (CGP), which focuses on majority acquisitions of businesses with significant expansion potential. CGP typically utilizes no leverage and has an indefinite hold period for its investments. This unique approach makes CGP an ideal partner for operators with long term perspectives and an attractive option for owners seeking to protect their legacy.

CGP seeks middle-market US businesses that have an established track record of success and are poised to become industry leaders with the appropriate capital and resource support.  CGP targets fragmented industries that can be consolidated and that could benefit from the increased use of technology or innovation. Platform acquisitions will have an enterprise value of $25 million to $125 million and will have generated at least $4 million of trailing EBITDA.

Opportunity Description: The fund is seeking a full-time Analyst or Associate to help support investment evaluation, deal sourcing, due diligence, execution, and other related tasks. The position reports directly to the head of the firm. Responsibilities include analyzing, summarizing, and presenting investment opportunities as well as assisting in developing the deal flow network, investigating targets, and activities related to managing the firm. Experience in private equity, corporate M&A, or investment banking are required. An ability to work diligently in an unstructured and entrepreneurial environment is also desirable. The position will allow for significant responsibility in the deal evaluation and investment process. This is an opportunity to join a newly raised fund within an established private equity platform.

Catalus prides itself on cultivating a more flexible, entrepreneurial, and fun culture than traditional funds.

Responsibilities/Requirements:

Prior experience in an investment capacity within a private equity or growth equity fund, or investment banking.       

• Expertise on the deal sourcing, diligence, and execution process.
• Ability to quickly and effectively evaluate, summarize and present investment opportunities.
• Strong analytical skills to evaluate businesses, market opportunities, and industries.     
• Strong communication skills and keen attention to detail. Applicant will be required to draft investment memoranda and present ideas to the fund’s investment team, in addition to interact with investment bankers, advisors, and directly with senior management of targets.      
• Strong modeling and deal structuring skills. Applicant will be required to evaluate multiple potential transaction structures and assess the impact on potential investments.     
• Ability to work in a flexible and entrepreneurial environment.

Location: Flexible. The firm’s primary office is in NYC with a satellite in Greenwich, CT. The right candidate could work remotely part or full-time, if willing to travel to NYC regularly.

Pay: Competitive based on experience.

Resume Submission: phil@cataluscapital.com

My Biggest Lesson 5+ Years After co-Founding Catalus Capital

The most important thing is the people that you work with, above all else. 

It sounds really basic, right?  Before starting Catalus I had probably read dozens of books and articles that emphasized the importance of working with honest, diligent, and reliable people that are experts in their market niche.  But I never really understood what that meant until years of ups and downs working with a range of amazing individuals to downright crooks. 

In my business, investing with great people means that you can trust what you’re being told, and that you’ll get the full story independent of whether its good or bad.  It means that you can rely on your partner to do their best to fulfill their promises, even if you’re not watching over their shoulder.  It means that they know their business cold.  You’re not guaranteed success but you have the highest probability of achieving it.

On the other hand working with people that have low ethical standards or don’t have the drive to go the extra mile can lead to some pretty negative situations.  These are the people that may lie, cheat, steal, or look the other way.  Furthermore, they can suck all the fun out of investing for a living.

In some of our deals we’ve dealt with amazing people that achieved incredible feats through their dedication and abilities.  We feel honored to be working with those individuals and appreciate their efforts.  But you don’t know a person’s nature when you meet them.  You learn that over time, and its easy to miss the early clues if you’re not watching for them. We’ve been tempted by deals that look great on paper but give us the feeling that something is ‘off’.  Eventually, we’ve always been thankful for passing on those.  Its human nature to give people some benefit of the doubt when a grey area exists.  But as an investor, it’s important to limit that instinct in favor of always demanding the highest standards out of potential partners.  

Buckle Up. Everything Has Peaked

For the last few weeks at Catalus, the big topic of discussion has been about how bad markets across the board are looking, and about how its only going to get worse. A lot worse.

Everywhere you look, problems are brewing, with the biggest warning signals flashing from the credit markets. Everything ranging from Treasuries, to leveraged loans, to high yield are down significantly (the latter being at a 5 year low). Credit downgrades are at the highest pace since 2009 and by some measures high yield bonds are at 2009 levels. You can paint a prettier picture by stripping out energy, but the losses are still significant, and the leftover companies are the ones that benefit from decreasing energy expenses.

Corporate profits have peaked with margins and earnings down despite the decreasing energy costs. In the last few years profits have been driven by stock buybacks, cheap debt, M&A, and cost cutting. The first three will be choked off with contracting credit markets and rising interest rates, and there's only so much corporate fat you can eliminate before you cut to the bone. Meanwhile US wages are marching upwards and the dollar is relentlessly rising, which makes our exports progressively less competitive.

US housing looks OK, but not great. The prices in gateway cities have risen to stratospheric levels. They outperformed in the last market downturn, but the reverse will be true this time around. Some markets are substantially over supplied, like Miami, Manhattan luxury condos, and some parts of LA. We won't see a crash, but there will be a more typical real estate correction, with the hottest markets getting hit the hardest.

Outside the US, the picture looks even worse. Emerging Markets are struggling, with some of the major ones like Brazil and Russia in deep recessions. China is just muddling along despite the government's forceful efforts to grow, and Europe has stagnated since the last crash.

Meanwhile in the face of all this the Fed will likely raise rates.

What does a responsible steward of capital do? At Catalus we've been waiting for this type of environment for years. In the meantime we've seen many market participants make some incredibly risky bets that will surely unravel if our prognostication is accurate. There will be opportunities in 2016 to pick up cheap assets; we're eagerly waiting.

*Update 1/7/16: On January 6th, 2016 George Soros referred to the current environment resembling that leading up to the crisis of 2008.  Let's hope that things don't get as dire as he predicts Soros Bloomberg Article.

The Next Big Thing

Once every few years we at Catalus stumble upon a trend or industry that we believe will generate attractive investment opportunities for many years to come and in some cases meaningfully alter the world that we live in. Sometimes these trends are controversial or contrarian, while others are completely unrecognized by the public. In this case, there's an almost cult-like following, and yet still we feel that there is an under-appreciation of the magnitude of this new industry’s eventual impact.

For decades, small-scale real estate developers and speculators have struggled with the inefficiency and difficulty of raising capital for deals sized $100k to $10 million. This size bracket is too small for institutional investors and dominated by unpredictable high net worth individuals who aren't in the business of investing, but rather do it in their spare time.

On the other side of the equation are the tens of millions of high net worth individuals in the US and globally that have accumulated savings, but don't have the knowledge or contacts to expand their investment portfolios beyond the traditional options. These individuals see real estate acquisitions, renovations, and developments happening all around them during their everyday lives, but rarely have access to invest, and don’t have the expertise to analyze the opportunities that they are presented with.

Crowdfunding will change all of that. If you’re not familiar with the industry, a good explanation is HERE.

Crowdfunding will enable technology to revolutionize how capital is raised, first in the $100k-$10 million size range, and then in progressively larger transactions as market-leading platforms are accepted in the deal community. Technology will also streamline the due diligence and closing processes, creating more efficiency and opportunity. As a result, real estate operators will have reliable access to capital through crowdfunding platforms and individuals will be able to participate in transactions with risk/reward ratios typically unattainable through traditional methods (the kicker is that some of these deals are really good… and some are pretty horrible). 

We've spent the last year studying the industry, meeting with the management of the most sophisticated platforms, and investing in deals. We're likely some of the best informed individuals on crowdfunding, and we continue to be impressed with its potential. I've personally been investing in these deals since early 2014 with excellent results, and we have now built a multi-million dollar portfolio at Catalus.

More to come.

Catalus Capital Partners with Genesis RE Holdings to Acquire Distressed Property

Catalus Capital and Genesis RE Holdings have partnered to acquire distressed residential property in Southern Florida. The deal was structured as a $10 million revolving first lien loan from Catalus and an equity investment from Genesis. The capital will be used to acquire foreclosed homes at auction.

Catalus continues to seek additional special opportunity investments that would benefit from a flexible approach.

See our email distribution here.

Catalus Capital's Marek Olszewski speaks to The Deal

Catalus Capital's Managing Partner, Marek Olszewski, recently appeared on The Deal to discuss the fund's opportunistic real estate investment strategy. Catalus seeks to partner with market leaders in specific segments and geographies where market inefficiencies exist.

Please click here to see the interview.

What am I Reading (listening to) Now?

*Update 12/4/14
Zero to One by Peter Thiel
Corner Description: The co-founder of Paypal and early investor in Facebook describes his views on how to build a successful business.


*Update 10/23/14
How Google Works by Eric Schmidt & Jonathan Rosenberg
Corner description: Insights on Google and running a business from two of the company's leaders.


*Original Post 9/16/14
I read a lot, so I figured it might be interesting to keep updates on the latest...
Inside the House of Money, Top Hedge Fund Traders on Profiting in Global Markets by Steven Drobny
Corner description: interviews of successful global macro traders on their strategies and experiences.