“5 things I wish someone told me before I started leading my company”, with John Carrick of Integrated Capital Management
Lead by example. As founder, people will look to you to define the company’s internal culture and external brand — establish a set of priorities, communicate them to anyone who’ll listen, stay on point, hold people (most of all, you) accountable for them, and stand for something!
As part of my series about the lessons of accomplished business thought leaders, I had the pleasure of interviewing John Carrick, founder and managing principal of Integrated Capital Management (ICM), an investment management firm in Los Angeles, CA. ICM invests the commercial real estate allocation of numerous family offices and private wealth relationships around the world by identifying largely off-market opportunities which are institutional in quality but require more nimble execution and decision making.
Thank you so much for joining us John! Can you tell us a story about what brought you to this specific career path?
I love this question, because a person’s career path is rarely a straight line and mine is no exception. From early childhood to adolescence, I cycled through aspirations of being a cattle rancher, a veterinarian and an ER trauma surgeon. Immediately following university, however, I enrolled in law school and functioned as an attorney for nearly six years after graduation — three years in private practice representing various Wall Street interests with respect to their real estate finance transactions, and three years in public service for the government agency charged with resolving the country’s savings and loan crisis during the early 1990s. I very much enjoyed my role as counsel, but, as time progressed, I wanted to better understand client-side issues such as pricing, valuation, structure and their relationship to risk. When the agency sunset by statute, I pursued a Master of Business Administration and transitioned to a career in real estate investment banking and private equity.
Can you tell us a story about the hard times that you faced when you first started your journey?
When a person looks back on their career, certain inflection points stand out. One of those inflection points for me was most certainly the transition from an attractive salary plus annual bonus I enjoyed as an attorney to a commission-based compensation structure as an investment banker. That transition occurred in 2005, and several years later — just when the seeds I’d been planting should have borne fruit — Lehman Brothers collapsed, and the global financial crisis immediately followed. I knew we could add value as long as deals were transacting, but when everyone was sitting on the sidelines paralyzed by shock and fear … well, those were very lean years.
Where did you get the drive to continue even though things were so hard?
To be honest, faith — faith in myself, faith in my team, and faith that we were as smart as anyone, and that we could outwork everyone. Our families, friends, and anyone who sincerely cared about us rightfully pleaded that it was time to do something different. With my experience, resume and relationships, there were plenty of more traditional opportunities that I could have found safety in. However, my business partner and I knew in our hearts we had something special, and that rather than seek safety, we looked past the immediate gloom and pursued a vision that was long term and could be shaped by our creativity and persistence. It is in these very toughest of times when a person has the opportunity to test their constitution, push their boundaries and truly find themselves. For me, I was guided by an inner voice that encouraged me against all odds to stay the course.
So, how are things going today? How did grit and resilience lead to your eventual success?
Things are great! Being an entrepreneur and business owner certainly has its challenges, but I’m glad I made the leap and can’t imagine any other lifestyle. We started ICM in 2017 and are proud to say our debut private equity real estate fund closed successfully and oversubscribed. The Fund is a unique, single-source solution for an investor who recognizes commercial real estate as an attractive alternative asset class and who seeks a portfolio allocation that is truly diversified among sponsors, product types and geographic markets. Some investors are comfortable allocating capital into public vehicles to get commercial real estate exposure, but most of our investor base are seeking higher returns and a manager with whom they not only trust, but also can speak directly to. In fact, whether an investor is visiting Los Angeles, or if we are visiting their hometown, we always make time to meet in-person and, whenever possible, walk the real estate their money has been invested in. Last year was the Fund’s first full calendar year of operations, and its seed investment increased in value by forty-three percent (43%) on a marked-to-market basis during a period when the public equity markets were flat at best.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
This wasn’t a funny scenario but a mistake I learned a great deal from. Soon after transitioning to a commission-based compensation structure, I was fortunate to be awarded the equity and debt placement related to a large, mixed-use real estate development in Southern California. It was a high-profile transaction, and I was confident the engagement would raise the awareness of our brand and the resultant advisory fee would fund our growth for the next several years. With so much at stake, I felt the complexity of the deal required my full attention to the detriment of all other priorities including lead generation, and, I was left to start over from a standstill when the underlying transaction fell apart more than a year later for reasons completely outside my control. In that moment, I became acutely aware that I do not control external market forces and that I must make sure my work effort accounts for the unknown and considers how a business plan is impacted over time. As a direct result, some portion of my efforts are now always focused on new business development. Similarly, within the context of our Fund’s investment strategy, we make investments that we believe can absorb short-term market volatility and will deliver results over varied timelines.
What do you think makes your company stand out? Can you share a story?
ICM stands out for the passion we demonstrate for our business and the commitment we make to both our investors and the real estate sponsors with whom we invest. We closed our inaugural real estate private equity fund with a diverse base of investors including several large family offices, registered investment advisors, high-net-worth individuals and foreign capital sources. During one fund investor presentation, I was preceded and followed by two bulge bracket investment banks that I very much respect and that were competing for the same allocation of capital. Months later, after winning the business, I asked the investor why he had selected ICM over the competition, and he said simply, “this is a big decision for me, and I believed in my heart that you’d care more about the outcome.” It is gratifying to receive a strong vote of confidence from such a variety of significant private wealth relations, and we very much appreciate their trust.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
I often mentor undergraduate and graduate students, as well as young professionals, considering careers in capital management. At our first introductory meeting, I generally ask, “So, what interests you most about real estate private equity?” The answer is nearly always the same — money! Wrong answer. In case it hasn’t yet become clear in this interview, I truly love what I do … and, because I love it, I’m pretty good at it … and, because I’m pretty good at it, I’m able to make a decent living. Money is simply the natural byproduct of doing what I love; it is not the primary motivation. If you are in this business for the wrong reasons, it will eat you alive. Similarly, I encourage colleagues to come from abundance rather than scarcity. Finance does not need to be a “zero sum” game the way it is frequently characterized — there is enough opportunity in the world for all of us to be successful.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
There are innumerable persons who have contributed to my success in meaningful ways, but I am particularly grateful to Brian Watson, chief executive officer of Northstar Commercial Partners, and Greg Martin, president of Shamrock Holdings. My professional and personal relationship with Brian and Greg began more than a decade ago — over the years, they have been capital sources, valued clients and ultimately trusted friends. Prior to forming ICM, both asked me, “imagine if you worked as hard for yourself as you do for your clients?” They encouraged me to bet on the team, and each of them made a strong vote of confidence in ICM by making significant seed commitments to our debut fund.
How have you used your success to bring goodness to the world?
I seek to bring some modicum of goodness to the world each and every day in my daily interactions, since even the smallest gesture of kindness can have a profound exponential effect. On a grander scale, however, I strive to create a culture of social consciousness at ICM where philanthropic contributions of time, talent and treasure are encouraged. Engagement letters related to our advisory services, for example, include an explicit contractual commitment to pledge three percent (3%) of any resultant commission in support of a charitable cause chosen by the client. I also personally Chair the Outreach Commission of my church where we partner with sixteen (16) service organizations at home and abroad to improve conditions related to homelessness, mental health and addiction, food scarcity and child welfare.
What are your “5 things I wish someone told me before I started leading my company” and why. Please share a story or example for each.
- This is going to be harder than you ever imagined. Having previously capitalized entities as an investment banker, I knew our first fund raise was going to be difficult, but I liken it to when my wife and I climbed Mount Kilimanjaro — Catherine and I trained for several months, and we were both mentally and physically well equipped for the task, but nothing prepares you for summit night!
- Financial forecasts are always wrong, but occasionally useful. Financial forecasting and sensitivity analyses are obviously critical elements to serving as a responsible fiduciary. That said, no one has a crystal ball — make good decisions with the information available at the time, realize you can only control so much, account for the unknown, and don’t beat yourself up too badly if you’re not 100% correct!
- Stay vigilant and open minded. Opportunity comes in many forms, and you might meet someone in the frozen food aisle who can change your life!
- Question everything. There may well be a reason something has been done a certain way forever, but everything can be improved, and the entrepreneur in me always wants to build a better mousetrap and leave the world a better place!
- Lead by example. As founder, people will look to you to define the company’s internal culture and external brand — establish a set of priorities, communicate them to anyone who’ll listen, stay on point, hold people (most of all, you) accountable for them, and stand for something!
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
In the United States’ current democratic political system, without any reference to party, I believe a material reformation of both the electoral college and the laws governing campaign finance are required before change of any magnitude can be initiated.
How can our readers follow you on social media?
Personal LinkedIn: https://www.linkedin.com/in/john-m-carrick-1856785/
ICM LinkedIn: https://www.linkedin.com/company/integratedcm/
This was very inspiring. Thank you so much for joining us!
