Sarah Kim

Partner at Clayton, Dubilier, & Rice

Background

I started in financial services banking at Goldman Sachs before joining a small middle market firm called McCown De Leeuw as my first entry into Private Equity. I then decided that I had a window to go back to school and pursued my JD/MBA. When I graduated, I joined another middle market firm but ultimately, I was looking for a place where I could learn from the best and spend my career, and when I was introduced to CD&R, I jumped at the opportunity to be part of that team. I joined in 2008 and have been here ever since. I’m now a partner in CD&R’s New York office, helping to lead our healthcare effort. 

Why did you decide to get a JD/MBA and how do you think that has helped shape your career today? 

It wasn’t as calculated as you might think… I had a strong interest in the law school education. But at the time, my mentors and colleagues were telling me it was crazy to go to law school instead of business school knowing I wanted to stay in private equity. So, I ended up doing both! 

I reaped different benefits from each. Law school teaches you deductive reasoning, a logical progression in thinking - less about learning how to read contracts or functional expertise per se and much more an underpinning of how to think about problems and solve them. It was very additive to what I personally took away from business school, which was much more about understanding how businesses work and how to think about pushing and pulling on the drivers of a particular business. So I found the two experiences very complementary.

What inspired you to make the jump to investing, and did you ever consider a different type of investing?

I was intrigued by the idea of being part of business-building without necessarily having to commit to a particular one. The idea of being an operator didn’t really resonate with me when I was deciding what path to take, but the idea of being part of a process that enabled capital to be matched to business need coupled with the opportunity to help drive a company’s strategy and driving value creation plan did resonate. That model fit very well with Private Equity and the first firm I went to. Although it was much smaller than CD&R, it was similar in the sense that operators and financial professionals combined their expertise to build better companies, creating value to deliver financial returns. That has been part of my DNA as an investor, so finding CD&R later in my career felt natural and was a great fit from that standpoint. 

How did you become interested in healthcare, specifically? 

I had the opportunity to move over to CD&R’s healthcare team at a point when we were more deeply organizing into verticals. It was a scary decision at the time because I was advanced in my career for learning a completely new sector, especially one as complex and specialized as healthcare, but it was the best thing I could have done. This decision enabled me to work in a field about which I had a deep intellectual curiosity (my father was an oncologic surgeon, and we were always talking about healthcare topics around the dinner table) and toward which I had a strong drive to be part of finding solutions. Further, the industry dynamics have attractive, long-term tailwinds, and it felt like there would be an opportunity to find compelling investment opportunities for many years to come and build out a differentiated franchise.

There is also a mission orientation to our healthcare investing – we really are trying to support businesses that reduce waste, drive efficiency, and improve health outcomes to create a better healthcare system relative to one that is very broken today. We are finding great investment opportunities, but we’re also working to positively impact the system overall, which helps providers and patients and their families. When you have a particularly hard day at work, knowing that at least some small part of what you’re doing is contributing to mitigating these intractable problems that impact everyone is really compelling and has been really energizing for me over the last number of years.

What drew you to CD&R outside of their operational strategy?

A couple of big themes drew me to CD&R. One is the firm’s approach to investing, the operational strategy which you note, was truly embedded in the firm. That’s what the firm has executed against successfully over 45 years through different cycles across various industries. It was compelling to me that there was a well-articulated value proposition that the firm had stuck to and been successful with over a long period of time. 

The second draw was CD&R’s culture. In my view, aligning with a culture that resonates with you is incredibly important. CD&R continues to be a group of people that is very team oriented, competitive with the external world but not with each other, focused on excellence, and very straightforward and forthright in terms of how they conduct business. As I think about the longevity of the firm, and the fact that many of us have stayed here for decades, one of the main reasons in my opinion is that the firm has created an environment that is supportive and team-centric, but also driven to be the best. 

What has helped you acquire the different skillsets required to transition from Associate to VP or Principal to now Partner?

Recognizing that Private Equity truly is an apprenticeship has helped me. Learning the next level of the job requires learning from the people that you’re working with and for. I think that it can be easy to say that this person has a completely different approach than I do and I can’t learn from that. But in fact, finding bits and pieces of what works for others and figuring out what works for you and how to adapt it to your own way of working is important. For example, I can tend to be more soft spoken, so looking at people who use that to their advantage in negotiation or the way they talk to management teams and build relationships has worked for me. Surround yourself with great people who care about your development, but also a diverse slate of people, so you can learn different things from different people and adapt them to your own personality and strengths. 

What is your favorite and least favorite aspect of your role?

There are many, many things that I really enjoy. One is that I like problem-solving and the fact that we can apply creativity to everything we do whether its deal structuring or creating incentive plans or thinking about M&A. Further, I really enjoy working with young people earlier in their careers where we can learn from each other. It’s fun to be surrounded by people who are talented, driven, and bring great energy to the job. 

I also enjoy building relationships with management teams and strategic partners. On the flip side, it’s not fun when that exercise goes awry, and we have to have hard conversations in various settings. Figuring out how to deal with those situations, hopefully with some measure of humility and grace, isn’t easy but it is a critical part of the role as well. 

Shifting outside of the workplace, could you speak about some of the not-for-profit organizations you work with? 

There are two organizations that I spend a lot of time with. One is the New York Foundling, which has a broad mandate to help underserved populations largely in New York with a focus on children, families, and IDD populations. I became involved through a family connection: my brother-in-law is a social worker who worked with one of the founding agencies 25 years ago, so we did some volunteering through which I came to know the agency and became part of the junior board and then the board of trustees. The other organization I work with is the Cancer Research Institute, which is a leading supporter of immunotherapy research to treat cancer. These two institutions are focused on causes that are very personal to me, and I really enjoy my involvement with them. These and other affiliations create communities for me outside of work which have been fulfilling and important in balancing the way I spend my time, and I’ve taken a lot away from these experiences that has also made me a better corporate board member and investor, so it’s a true win-win. 

Thank you for your time, Sarah! To learn more about CD&R, click here.