On Nov 12th, the Johns Hopkins Private Equity and Venture Capital Club (JHUPEVC) warmly hosted Mr. Chris Hoehn-Saric, Co-Founder and Managing Partner of Sterling Partners and JHU alum, for a presentation and discussion at the Johns Hopkins Carey Business School.
Chris has a deep connection to Johns Hopkins University – from his own engineering major background, to his parents being Professors in the Johns Hopkins Department of Psychiatry. Chris is also a current member of the Johns Hopkins Board of Trustees, and an ideal speaker to connect with JHUPEVC members and discuss key issues in the private equity industry.
Chris’ presentation started with a discussion on the returns across investment classes and how investment in private equity has delivered notable and outstanding returns compared to investments in public companies or venture capital over a period of 81 years from 1926 to 2006.
He introduced his own firm Sterling Partners which was started in 1983 by four young entrepreneurs who began investing in companies by raising funds on a deal-by-deal basis. The firm has come a long way since then and it is now one of the leading private equity firms that specializes in growth capital investments. Chris shared that Sterling Partners is focused on investments in education, healthcare and business services, and seeks companies with strong growth characteristics and an opportunity to become a market leader in their field.
Venture Capital or Private Equity?: Crafting a Thorough Investment Strategy
Private equity and venture capital are terms that are often used interchangeably by the general public – which was a misconception that Chris neatly clarified for JHUPEVC members. Chris highlighted the fundamental differences between both investment models and shared that compared to venture capital, private equity had lower volatility and their returns are measured in terms of 2-3x returns on money.
To illustrate this, Chris described how Sterling Partners acquired Spartan College of Aeronautics and Technology (Spartan), a prominent aviation-maintenance school for training pilots, aviation technicians and nondestructive testing professionals in Jan 2013. Chris shared with the audience the investment thesis for investing in the aviation training industry and how Sterling Partners planned to add value to the company through the restructuring of the business and executive teams. In addition, he discussed the growth opportunities that Spartan would be able to capture with the support of Sterling Partner’s investment and partnership. This was a useful illustration of the different investment models, and how private equity could provide a win-win situation for both investor firms and businesses.
In the final section of his presentation, Chris shared his outlook on the private equity industry and his thoughts on the rapid changes within the industry as large scale private equity firms like Carlyle, KKR and Apollo gradually become multi-asset managers. He added that technology would be both a key enabler of innovation, while posing increasing opportunities for disruption in many industries. He advised JHUPEVC members that finding a good private equity company with an outstanding management team that could navigate these challenges and thrive would be the most important task.
The Johns Hopkins Private Equity and Venture Capital Club is grateful for Mr. Chris Hoehn-Saric’s time and candid sharing about the challenges and opportunities facing the private equity industry. We are also grateful to hear his sharing about the evolution of Sterling Partners and the case study sharing of Spartan College of Aeronautics and Technology – all of which will benefit JHUPEVC members as they enter the field of private equity and investments.
