Heath Zarin, founder of EmergeVest, on secondaries and industry focus supply chain investing
In a recent fireside chat hosted by Giovanni Amodeo, Heath Zarin, the founder, Chairman, and CEO of EmergeVest, shared his insights on the niche of supply chain investing and the dynamics of secondary markets. The discussion delved into various aspects of the industry, highlighting the strategic approaches and future outlooks in supply chain management and investment.
Key Topics Discussed:
Supply Chain as an Investment Niche: Zarin emphasized the attractiveness of the supply chain sector due to its significant share in the global economy and its highly fragmented nature. He pointed out the potential for growth by outpacing competitors and leveraging a buy-and-build strategy.
Value Creation through Supply Chain Optimization: The conversation touched on how optimizing supply chains and integrating technology such as AI and robotics can add substantial value. Zarin also discussed the importance of sustainability and ESG (Environmental, Social, and Governance) factors in modern supply chain operations.
Impact of Global Events on Supply Chains: Zarin shared insights on how events like the Suez Canal blockage and the semiconductor crisis have influenced supply chain dynamics. He stressed the importance of scenario testing and maintaining conservative leverage to navigate such disruptions.
Pricing Dynamics and Customer Impact: With rising costs in global logistics, Zarin discussed the inevitability of passing these costs to customers and speculated on future pricing trends, including the potential growth of financial markets around containerized freight.
Sustainability Initiatives: A significant portion of the chat was dedicated to sustainability, with Zarin outlining EmergeVest’s efforts to reduce carbon footprints through efficient logistics and alternative fuels, highlighting their commitment to creating environmentally friendly supply chain solutions.
Secondary Markets and Investment Strategies: The discussion also covered the evolution and sophistication of secondary markets in private equity, with Zarin predicting further growth driven by a broader acceptance of GP-led opportunities and geographical diversification.
Interest Rates and Economic Impact: Zarin touched on the implications of fluctuating interest rates on business operations and investment strategies, emphasizing the need for agile management of working capital in varying economic climates.
Vision for EmergeVest: Concluding the chat, Zarin articulated his vision for EmergeVest, aiming for the brand to be recognized for transforming mid-market businesses into global leaders through strategic investment and value creation.
Throughout the discussion, Zarin provided a comprehensive overview of the current trends and future opportunities in supply chain investing, underscoring the importance of innovation, sustainability, and strategic resilience in driving growth and value in today’s complex global market.
Key timestamps:
00:09 Introduction to ION Influencers Fireside Chats 00:35 Heath Zarin’s Background and EmergeVest 02:34 EmergeVest’s Focus on Supply Chain Sector 05:24 Impact of Macro Factors on Supply Chain Investing 07:12 Challenges and Disruptions in Global Supply Chains 09:08 Price Increases and Long-Term Impact on Customers 10:41 Financial Market Opportunities in Containerized Freight 11:32 Financial Opportunities and Hedging in Container Space 15:02 Comprehensive Metrics and Balanced Scorecard for ESG Performance 18:59 Evolution and Future of Secondaries in Private Equity 21:18 Perception of Pricing and Risk in GP Led Single Asset Space 22:13 Advantages of GP Led Single Asset Space 23:03 Geographical Diversification and Market Growth 23:31 Expansion of Secondary Fund Strategies 24:20 Funds Continuation and Value Extraction 26:24 Impact of Interest Rates on Business 27:35 Portfolio Management and Adjusting to Interest Rates 29:03 The Meaning of the EmergeVest Brand