Q&A with Hayley Kim of Clayton, Dubilier & Rice

Hayley Kim is an associate at Clayton, Dubilier & Rice, where she is a critical member of the deal team and focuses on enhancing investment decision-making through rigorous statistical analysis and financial modeling. Since joining CD&R, Hayley has been a leading team member in a number of significant transactions for the firm that have contributed to her established status as an investor in the realm of private equity. Previously, she worked at J.P. Morgan, where she applied her analytical skills in mergers and acquisitions transactions, resulting in a successful combined value of approximately $7 billion dollars. Now at CD&R, Hayley is well on her way to contributing to transactions on behalf of the firm exceeding several billion dollars. We recently spoke with Hayley about her career path, the mentorship initiatives she’s involved in and what’s on the horizon.

Tell us about your background and your path to private equity. What led you to CD&R?

I studied statistical analysis and financial modeling as an undergraduate at Wharton, but my interest isn’t in studying numbers themselves. Instead, it lies in understanding the real-life impacts of those numbers. My focus has been, and continues to be, how robust data analysis and financial modeling lead to more sound investment decisions.

After graduating from Wharton, I joined J.P. Morgan to gain experience working on a range of transactions across various industries. However, given my interest in making data-driven investments and better managing acquired companies, I decided to make the jump into private equity to put those skills to use. I was drawn to CD&R because, rather than placing bets on market trends or relying on upswings, I believe that CD&R is known for its thorough diligence process, thoughtful investment decisions and appetite for complexity. The firm’s deliberate approach to investments pairs well with my interest in using statistical and financial analyses to refine investment decision-making and drive growth.

What aspects of your time at CD&R have you found most rewarding?

The most rewarding aspect of my time at CD&R has been seeing the results of CD&R’s investments in the real world – not just in helping businesses become stronger but also strengthening the entire economic ecosystem in which the business exists. I’ve enjoyed partnering with management teams in-house at these businesses to grow their business’s top line and as a result, seeing the positive impact that a stronger company can have for all stakeholders, including the business’s customers, vendors and employees.

It’s exciting to think about the broader impacts of CD&R’s investments through the lens of our investor pool. By making sound investments, we strive to achieve superior equity returns for our fund’s investors, including institutional investors like endowment funds or pension and retirement funds throughout the U.S. In turn, those investors rely on returns of private equity firms to serve beneficiaries, such as retired citizens and leading universities.

As a member of the investment team, can you tell us about your responsibilities? Are there any aspects of the job or transactions that you’ve found particularly challenging?

At a high level, I lead the analytical processes throughout the deal’s life cycle, both before and after the announcement of a transaction. This process includes reviewing complex data sets, including data dealing with customer decision-making and building financial models based on this information. I analyze these data points with an eye toward important insights the data indicate about the investment. I then apply this analysis to the financial model for the investment to refine the range of potential returns. This kind of pattern recognition through data analysis ultimately helps us identify businesses that meet our investment criteria and, I believe, get to a better deal once we’ve identified a target.

For example, I’m currently working on a transaction that involves carving out a business from a global organization. The target business is deeply intertwined with the broader parent organization across every function, like HR, Finance and other back-office functions. So we need to filter through huge amounts of information to evaluate how this particular segment has been performing, separately from the broader organization. We also evaluate how the business will compare to other players in the market, since the success of the investment will be based on the stand-alone business’s ability to win client business in its industry. In the carve-out context, segment-level data also helps us identify areas where the business may be underperforming and generate forecasts based on stand-alone historical trends. Ultimately, this kind of detailed analysis allows us to determine our investment strategy and where to deploy capital, but it can be particularly challenging when the target operates globally or is housed within a parent organization.

Can you tell us about your involvement in mentorship initiatives for those looking to follow a similar path?

In my tenure at J.P. Morgan and CD&R, I have developed an original framework around data analysis and financial modeling that can be replicated by other professionals in other investing processes. Developing the kinds of skills that lead to sound investment decision-making requires what’s essentially an apprenticeship – we learn most from exchanges between the members of our team. We also work closely with our advisors, including consultants and accounting firms, providing them with the guidance they need in order to proceed with their work, which in turn feeds into our decision-making.

Outside of CD&R, I’ve been interested in learning about different investors’ perspectives and sharing my own insights by participating on panels at industry events or as a judge for case competitions. The discussions around different methodologies and strategies for investments are invigorating, since private equity investing requires a deep understanding of the different moving pieces involved in bringing a transaction together.

From your vantage point as someone who is at the top of the private equity field, do you have any advice for women looking to follow your path?

There are two key lessons I’ve learned so far. First, in terms of “hard” skills, we’re essentially flooded with data during the due diligence phase and during the portfolio management process. So, I push myself to look at the big picture: what are the key factors that affect the investment and its returns? Basically, it comes down to effectively filtering information.

Second, in terms of “soft” skills, investing is really about forming a judgment or an opinion about something. You need to have a perspective – one that is grounded on a robust analytical framework. So I remind myself that every time I look at a data set or an analysis derived from it, I need to form a view about what’s important about that particular data or analysis.

What’s on the horizon for you over the next few years?

As you can tell, I’ve found private equity to be rewarding so far, so my plan is to keep going – working hard on finding the right investments, partnering with the management team to better manage the company and generating returns.

Dominique Trudelle is an associate in Debevoise’s San Francisco office.

Comments? Suggestions? We’d love to hear from you. Send us an email at women@debevoise.com.