Managed Investments are those transactions where CEA combines its extensive financing and management assistance with creative concepts and the management teams who introduce them.
Some of our most successful direct investments have originated through our investment banking activities. As our banking and direct investing activities increasingly fed one another, we amassed such hands-on operating experience and global relationships that we began recognizing transformational trends and designing opportunistic situations to capitalize on them as larger managed investments.
From a historical perspective, Rick Michaels and his colleagues started investing under the CEA banner more than three decades ago. Opportunities arose largely from CEA’s investment banking and brokerage business, providing insight and access to opportunities that otherwise would be unavailable to individuals or institutional investors not actively involved in the industries.
As the investment banking business provided a steady flow of deal opportunities and client relationships, CEA afforded itself the opportunity to learn the operating aspects of many businesses. We were able to craft ways of making money on business opportunities in conjunction with clients and friends on operating sides of the business.
Our success in managed investments led us to so many more attractive and such larger opportunities that, in the late 80’s, we began exploring the possibility of establishing CEA-branded private equity funds.
Rather than merely taking a seat on a board or passively investing otherwise, we use our experience, strategic contacts and access to value-added capital to actively participate in mapping out and executing strategic plans for managed portfolio companies. The result… a stellar track record of 89% IRR for more than 30 years of direct investing.
CEA has interest in a wide variety of industries. While our core strengths, expertise and industry contacts remain in the CME industries, we have been very successful in making active investments in industries as diversified as specialized real estate and death care, the common denominator being our ability to study and understand the value proposition within the context of the industry, and more specifically, the transformational trends that affect related industries. Other opportunities, which offer value creation through financial engineering, such as family buyouts and recapitalizations, are also of interest.
As a matter of general principal, CEA will not consider blueprints, startups, or pre-revenue companies. While we have been involved in ventures of this nature in the past, we have generally created them ourselves, have held majority or substantial equity positions and have played an active role in company development.
Detailed planning and an experienced team are both essential in order to maximize upside and protect against unfavorable risks. For this reason, we look to the management team to be able to articulate the direct benefits and potential value creation to be derived from our vision, expertise and contacts.
While CEA does not make passive third-party investments in any transaction, we would be interested in hearing from you regarding concepts for which a potential relationship with CEA might be advantageous.