Contrarian investing as a J.D./M.B.A.
Barry Volpert J.D./M.B.A. ’85 is chief executive officer of Crestview Partners, a private equity firm he co-founded in 2004 after retiring from Goldman Sachs, where he was head of the Merchant Banking Division in Europe. Based in New York City, Crestview has about $4 billion in assets under management. Volpert graduated magna cum laude from HLS, where he was an editor on the Law Review, and he received his M.B.A. from HBS with high distinction and was a Baker Scholar. Volpert has served on the Dean’s Advisory Board at HLS for Elena Kagan ’86 and Martha Minow.
What has been the value to you of the joint J.D./M.B.A. program at Harvard?
It was critical in my decision to choose a career in private equity and to develop a specialty in bankruptcy and distressed investing, and even to this day it helps me negotiate private equity investments with greater confidence, especially when complex legal judgments are an important aspect of an investment thesis, which is so often the case. For example, in the mid-1990s, when I was working at Goldman Sachs, we were able to structure a “rescue financing” to a mortgage trust that ultimately allowed Goldman Sachs, together with David Rockefeller and other investors, to acquire Rockefeller Center on very advantageous terms. The combination of my legal and business training helped enormously in developing this investment at a time when New York City real estate was deeply depressed, and it turned into one of Goldman’s best investments.
Why did you choose to launch your own investment firm?
After nearly 20 years at Goldman Sachs, the last six of which were in London, where I headed their international private equity business, I felt ready to launch an entrepreneurial venture. As the biggest investment banks and mega-funds grew very rapidly, I thought there was a window of opportunity left behind to build an excellent team and focus on generating strong returns in the middle market. Moreover, with all the information available on the Internet and various databases, I also felt that an entrepreneurial boutique, such as Crestview Partners, would have access to all the same information as the bigger firms with fewer headaches, and would be more fun to work at compared with a large organization.
What is different about your firm?
At Crestview, we like to focus on complex and difficult situations that many other private equity firms tend to avoid, with the expectation that periodically the “baby is thrown out with the bath water,” and we can find a great opportunity that has been overlooked. Very few of our investments are plain-vanilla LBOs. And, very importantly, we have a substantial personal investment in each fund, which aligns our interests with those of our investors. We also have in-house operating and executive expertise that enables us to help improve our portfolio companies’ operations, rather than relying on financial engineering to generate our returns.
What do you enjoy about the work?
I enjoy identifying investment opportunities where we think the conventional wisdom is wrong. I enjoy recruiting great people whom I have the privilege of working with every day as members of our firm. And, I also enjoy interacting with our investors and portfolio company executives, who I think are among the brightest in the world of business. Mostly, I enjoy working with our companies to help them succeed, grow and prosper, which, at the end of the day, is why we are in business.
What is your advice to students who want to be entrepreneurs?
Just do it! There is no substitute for the “thrill of victory and agony of defeat” that you feel as an entrepreneur. If I could do it over, I would have launched Crestview sooner.
Also, the most important thing is who your business partners are—investors, colleagues, executives—the people you work with every day. HLS students are smart and motivated, and most will be successful. Looking back, you remember the people more than anything else, even more than the financial returns. When I am asked for advice by people about to enter the business world, I tell them, try to surround yourself with people you admire and respect and enjoy, and who are intelligent, ethical, motivated, creative, loyal and, very importantly, have a sense of humor.
What do you see when you look at HLS today?
For those alumni from the mid-’80s who were at HLS for the faculty battles and drama, the school is a much different place and a much better place than you can imagine, with great leadership under Martha Minow. It’s very exciting to watch. It has smaller sections and more practical training and is more technologically savvy, more focused on exciting new legal frontiers in intellectual property and international law, and more focused on leadership training. It is really an honor for me to be involved in a small way in supporting the growth and success of the law school, and I enjoy contributing an investor’s point of view from time to time.
Tell us something about your outside interests or passions.
I do enjoy Burgundy and have a small investment in a winery. It’s like “The Producers”—we lose money every year and sell a new share at a higher price to finance the losses when we need to. And I’ve been pretty active supporting a fellow J.D./M.B.A. running for office this year.