With New Sectors Come New Questions
Catalyst Investors is a growth equity venture capital firm investing in technology-enabled businesses. Their investments can range from communications and wireless infrastructure to the software and services that infrastructure supports. Catalyst is currently investing out of their $377 million fourth fund, making three to five investments each year, less than one percent of the deals they look at.
To get to those few worthwhile investments, Catalyst relies on extensive research. After seventeen years of this approach, they’ve built up considerable institutional knowledge within their most active fields. But there are always new markets and new sectors to consider. For that, Mia Hegazy and her colleagues at Catalyst look outside the firm and its network of portfolio companies. They learn from top experts about rising trends and test their emerging investment theses. And when the learning and conversations are over and a new investment begins is where it gets special for Hegazy: “the fun part about working in this industry is finding companies that we can get excited about that are operating in an interesting space.”
I’m Mia Hegazy. I work at Catalyst Investors. We invest broadly in tech enabled service businesses, which include everything from infrastructure investments in communications and wireless to the software and services that sit on top of it. We’re investing out of a 377 million dollar fund and we’ll make anywhere from three to five investments each year, that’s less than one percent of the deals that we review.
Catalyst has had a long history of being research-driven. And a great way to connect with the companies that we’re most excited about and the sectors we’re most excited about, is by establishing thought leadership and an expertise in the sectors that we’re interested in. Where it becomes more challenging is when we’re investing in new sectors that we maybe don’t have portfolio companies in or we have less experience operating in this space.
When we’re evaluating a deal and we’re trying to reach out to experts on our own, it’s a far lower success rate than dealing with GLG and knowing that we’ll definitely get connections and we’ll definitely have people that fit the criteria that we’re seeking. The culmination of identifying a sector that’s interesting, of seeking out companies and meeting with management teams that we can learn from and then of speaking with experts that GLG can connect us with leading to you know an investment is really exciting.
Having such an open mandate where we can really learn and identify sectors based on what we think is most interesting has been a great experience and is definitely helping the firm to continue to grow and evolve.