As part of CEO Insights series, the Chief Executives Council recently interviewed Brett Hickey, founder and CEO of Star Mountain Capital, LLC, a multi-billion dollar specialized private investment firm, making loans, private equity investments, and secondary fund purchases. Mr. Hickey has over 20 years of private investing and investment banking experience, with over 15 years spent directly in the US lower middle-market. Star Mountain has been recognized as one of the best places to work by Crane’s, and Pensions & Investments in 2019, 2020, ’21 and 2022. Previously, Brett worked as an investment banker at Citigroup Global Markets, formerly known as Salomon Smith Barney in New York City, where he completed 24 billion in transactions for financial institutions. He graduated with distinction from McGill University in Montreal, Canada with a Bachelor of Commerce degree in Finance and Accounting, and he’s an alumnus of Harvard Business School’s Owner/President Manager Executive Training and Management Program.

His board positions include Harvard Alumni Entrepreneurs and the YMCA of Greenwich, Connecticut. He is also the founder and chairman of the Star Mountain Charitable Foundation of 501(c)(3) focused on job creation including veterans, women, athletes, economic development, health, and wellness. Mr. Hickey is a member of the Young President’s Organization (YPO) and is a former Canadian national golden medalist and North American gold medalist in speed skating.

Following are questions from moderator Neil Brown, and answers from Brett Hickey. If you are interested in learning more, view the full interview video archive here.

Q: Do you want to tell us a little bit about Star Mountain Capital?

A: Star Mountain Capital is a specialized private investment firm that is focused on an end of the US economy that’s surprising to many, represents about 50% of US GDP. And as many people likely know, over 90% of the businesses in the United States are private companies. I started my first private investment firm, which I later rebranded and structured into Star Mountain Capital 20 years ago. So excited to be celebrating 20 years of history of now investing in high quality growing private businesses. And I developed Star Mountain to try to bring large market expertise and capabilities to high quality growing private businesses that are cashflow positive and established in America, and to also give investors access in an efficient manner in customized manners and diversified manners into what we believe is one of the most compelling asset classes. Again, the US lower middle-market, which more granularly, we do private lending, private equity investing, and then what’s called secondary fund purchases, giving us a holistic and expansive data-driven approach to access the private, lower middle market in America, today managing just over $3.8 billion (Including debt facilities).

Q: What were some of the milestones of your career path to CEO?

A: One of the things that helped me early on when I started my career at Solomon Smith Barney and Citigroup, it was the largest financial services firm in the world. And at Citigroup I worked within the mergers and acquisitions investment banking division, helping buy and sell insurance companies, banks and evaluate them as well as portfolios of assets. So, working at the largest financial service firm in the world and helping not only work within the portfolio within Citigroup, but also other asset management firms, really gave me a lens and a perspective globally into what are people doing, why are they doing it, where have they failed, where have they succeeded? And I’ve really been a student and continue to be of learning as much as possible as frequently as possible.

The second one was really a job creation program. One of the things that the United States does a really good job of is trying to sponsor entrepreneurship and job creation, including through programs that we at Star Mountain manage, under the SBA, which is the small business investment company program. Back in 2004 when I launched my first lower middle market private investment fund, it was to help invest in companies that are women owned, minority owned, and in underserved areas of various states, including Texas, New York, and Alabama.

Q: What are your responsibilities and how might they be different in the financial sector versus other industries?

A: One is the regulatory framework upon which we operate, being responsible for managing assets for investors from nearly 40 countries around the world, including my father’s public pension. It’s not a dynamic where no big deal if we fail, it’s a dynamic that people live and rely on the results that we generate. We like to talk to our team about that a lot, which I think is just a critical part of how investing should be. I think a key part that’s perhaps different than some other sectors in general in just who our constituents are and how important our duty of care and our obligations are to them and the financial results that we generate.

Q: What are some of the most interesting aspects of your job?

A: I love building teams. When I went to Harvard Business School and joined YPO, I came away feeling that talent development was really going to be one of the most important things that I as a CEO do. I view strategy and talent development and then organizational structure are very interrelated as probably three of the most important things that I do as a CEO. And I think that the other thing, being a 100% employee-owned business, I share the carried interest and the profits with 100% of my team. And I think that being aligned and being focused is really a critical part of long-term success and is a lot of fun. It’s fun to drive hard with a team.

Q: Share some keys to your success

1. Being good at developing and thinking through a high-quality business plan that is really differentiated and has long-term value where you can consistently create competitive advantages.
2. Talent and Execution. A lot of CEOs, particularly for those of us that are founders, have to be executing. Whether that’s raising capital, finding investment opportunities, evaluating them, you’ve got to be good at that. But eventually you hope to build your team to where your focus really transitions into one of the things that I love, talent development.

Q: What advice would you give others that seek a CEO, the office of the CEO, or just to be more effective as a CEO?

A: I’ll frame in two categories; One is a founder, and one is what people would call a hired gun, somebody who’s hired into being a CEO role. I think first off, in either case is really thinking about the amount of energy, focus and dedication that it really takes to be successful. I’m fortunate to have people on my advisory committee that are former partners at McKinsey Consulting, for example, and they came out with a book called CEO Excellence recently, and they attributed about 60% of value creation to the CEO and leadership. And whether that math is right or wrong, I think the point is a CEO plays a critical role, it is a 24/7 job. So, when you think about wanting to be the CEO, yes, many aspects of it are very exciting, strategy is fun, being empowered is fun, but making sure you’re realistic about the efforts that it will likely take to be successful because you need to deal with challenges, you need to deal with opportunities.

The second one would be around coaching, which we talked about before, is finding high-quality people that have been there and done that, and you can trust, and you can work with that you’re not worried about their own agenda.

The third piece of advice I would give other CEOs, at least I’ve found has been effective for me, is aligning interests with your team, making sure your economics are vested and so forth, but really build alignment and a culture of partnership.

To learn more, view the full interview here.