IN THE NEWS

Learning from your mistakes and improving the lives of others

Last year, José E. Feliciano, co-founder of Clearlake Capital Group, the 30th largest private equity firm in the world, donated half a million dollars to the Toigo Foundation, a non-profit organization that supports education, leadership, and diversity in the financial services industry. Feliciano, who recently virtually attended his 30-year high school reunion, has carved a path through his positivity, humility, and good old-fashioned hard work, becoming one of the wealthiest and most successful Latinos in the United States. Though he would readily admit that failures and great losses were all part of his path to success, the long and winding road traveled by this self-made billionaire solidified core values that haven’t changed since his modest upbringing in Puerto Rico.

Source: Latino Leaders

Born and raised in a middle-class family, his parent’s sacrifice is a big part of Feliciano’s success. Connecting the dots in adulthood, he is so appreciative of how his parents always put their children first, making love and education pillars of their parenting. They saved enough money to send their son to a private school that taught English, preparing him for his eventual travel to the United States. “I was just lucky enough to have the benefit of a very supportive family and one that was very focused on education,” he noted. Feliciano and his wife Kwanza Jones, whom he met in college, share his parents’ values and give back to others for precisely that reason.

Although he excelled in math and sciences early on, he displayed an uncharacteristic lack of certainty when the time came to choose a university to attend post-high school. But the extension of a helping hand led to a life-changing decision. “I was thinking of staying in Puerto Rico and studying engineering after graduating from high school,” Feliciano admits. Then serendipitously, a classmate applied to Princeton University and prompted a hesitant 17-year-old Feliciano to do the same. This was 1990 and the internet was merely a whisper in America, and almost nonexistent in Puerto Rico. So with very limited research, Feliciano almost blindly applied to one of the most prestigious schools in the world. He had never met anyone who had attended Princeton and admittedly didn’t think he had much of a chance, so he didn’t even fill out the paperwork completely.

Once he submitted the documents, the young man was contacted by a Princeton alum named Ronald Blackburn who changed Feliciano’s life forever. Blackburn saw the potential in the teenager and convinced him to finish his application. As part of the alumni interview process, he contacted the Feliciano family and portrayed Princeton as a paradise in academia, which of course struck all the right chords with his parents.

Feliciano never forgot this interaction, which taught this investor-philanthropist another important lesson — know how your actions can affect others, and try and make each interaction honest and thoughtful. Blackburn’s thoughtfulness steered Feliciano to Princeton University which changed his life forever, introducing him to his two great loves. If it was Feliciano’s parents that imprinted the value of education in their oldest son, then the time spent as an undergraduate at Princeton sparked his love of entrepreneurship, and perhaps most importantly, led to him meeting the love of his life, Kwanza Jones. Together, the couple have carved a unique path of accomplishments including climbing Mt. Kilimanjaro and creating the SUPERCHARGED Initiative, an organization dedicated to positive social impact. At the time of this article, the SUPERCHARGED Initiative has donated more than $25 million to organizations focused on education and/or empowerment in diverse communities, and invested or committed almost $50 million to ventures led by women and/or underrepresented minorities.

Accompanied by his soulmate, and on his way to graduating from Princeton with High Honors and a B.S. in Mechanical & Aerospace Engineering, another significant relationship led him away from engineering and into the world of finance. At this time, Feliciano was on his way to literally becoming a rocket scientist, and he genuinely had no concept of what investment banking was. However, in another serendipitous occurrence, his roommate, Alex Doñé, now Chief Investment Officer for the $200 billion New York City Retirement Systems, had gone to work on Wall Street. His roommate’s journey sparked Feliciano’s interest in finance and led to him working several years at Goldman Sachs after college where he became involved with many international companies doing business in Latin America, primarily Mexico.

This is not only where Feliciano gained his formative experience working with companies like Televisa and Telmex, but it was also during his time at Goldman Sachs that he met one of his mentors, Robert F. Smith. Smith is the founder, chairman, and CEO of Vista Equity Partners, one of the most successful private investment firms in the world, and a well-known philanthropic-minded investor. While working together at Goldman Sachs, Smith introduced Feliciano to the idea of being truly impactful in business and personal interactions, and they are still good friends to this day.

As a result of these experiences, Feliciano embraced the intellectual challenge of understanding the operations of a business, its financial matters, and how the right leadership can create very significant value and very interesting results. That spark for business initiated by his roommate turned into a flame that led Feliciano to continue his education and pursue his MBA at the Graduate School of Business at Stanford University in California.

Coming out of business school, Feliciano gravitated towards private equity and the world of investments. His present-day private investment firm would end up overseeing more than $18 billion in capital from institutional investors from around the world since it was founded in 2006, acquiring technology, industrial and consumer-focused companies, and producing some of the industry’s best returns. Although Feliciano had discovered his new career pathway after taking a few forks in the road, there was still another detour left before he arrived where he is today.

Feliciano tells Latino Leaders the story of the first company he joined out of Stanford during the “dot.com” bubble with his sights set on changing the world. “I was one of the first 10 employees and over a couple of years I held multiple titles including CFO and COO, and ultimately we raised about $60 million from some marquee investors…But it didn’t work,” he laments. The internet-based company went bankrupt and had to restructure, and Feliciano had to personally fire a lot of his friends and colleagues whom he had helped recruit to the start-up. Up until this point he had experienced setbacks but ultimately had been successful in most of his endeavors. “It was one of the most painful personal and professional experiences that I ever had,” Feliciano reiterates.

But never giving up on himself, he used this experience to get back into the investment world where he joined Los Angeles investment firm Tennenbaum Capital. Forging a new path with the lessons learned through this trial by fire, he and his wife set up roots in L.A., where they live currently, and within a few years he became a partner at Tennenbaum. Here, Feliciano learned what it takes to build a successful investment firm, and eventually, he felt it was time to start his own firm.

For the past 14 years since he co-founded Clearlake, Feliciano has put two values above all else at his investment firm: Teamwork and Honesty. “The importance of a team is to make the other people around you, the person to your right and the person to your left, better.” He references Michael Jordan’s success when giving young proteges pep talks imparting that there will always be a hotshot investor who wants to succeed selfishly—but that approach will never work at Clearlake. If someone is not making the team better through cooperation, hard work, and positivity, they simply will not be a fit. Just as important as being part of a supportive team, a core part of the Clearlake culture is to be brutally honest and constantly embrace mistakes as opportunities to improve one’s work. “Understanding and dissecting, trying to analyze your failures or the situations where you haven’t done as well, and trying to make sure you’re not repeating those same mistakes is critical for continuous improvement and growth.”

It’s clear that Feliciano is a leader not only in the world of private equity but also in civic engagement and philanthropy. As an entrepreneur and optimist at heart, he sees Latinos as a vital part of American society who are on their way to reaching their full economic potential. “As best said by one of my heroes, Cesar Chavez, ‘We cannot seek achievement for ourselves and forget about progress and prosperity for our community… Our ambitions must be broad enough to include the aspirations and needs of others, for their sake and for our own.’ This is particularly important now when minority communities are threatened by the combination of a health crisis as well as persistent economic and social inequities.”

This is where the idea of empowerment plays into Feliciano’s ideals. He believes the Latino community will become a more empowered voice in the American economic landscape through its consumer power, its high level of entrepreneurship, and via the investment success of Latino-led firms. The Latino community is gaining power by voting with their dollar, and their point of view is starting to be noticed by American corporations targeting them as a valuable consumer market. Young Latino entrepreneurs today are also as well-versed in business operations and management as any other cohort, but the road is a challenging one for even the most accomplished and experienced. Notably, Feliciano has long promoted the idea that investment prowess does not have a color, gender, or ethnicity. He strongly believes that Latino-led investment firms are every bit as capable of producing incredible returns for their investors as any others out in the investment management industry—if only they are allowed the opportunity to tap into institutional capital. “There are challenges ahead, but our community has never shied away from hard work.”

Through its four key priorities, Education, Empowerment, Entrepreneurship, and Equal Opportunity, the Kwanza Jones and José E. Feliciano SUPERCHARGED Initiative seeks to invest in the future of those whose pathway to success has not been easy or fair. Feliciano’s own story is a story of success despite adversity. In this unlikely story, a young boy from a modest family in Puerto Rico is using the power and capital gained from investing in himself, and his industry-leading investment returns, to help others realize their own dreams. Certainly, a tough act to follow for anyone, but as a fellow mountain climbing enthusiast, I can confidently presume José E. Feliciano’s journey is far from over.