Karey Barker, founder of Cross Creek on an Emerging Asset Class: Late Stage Private Growth Companies
About Karey Barker: Karey is a generalist with broad public and private investment experience. She is interested in great business models across sectors and has led investments in a variety of industries, including digital marketplaces (IronPlanet, Ticketfly), consumer internet (Angie’s List, Scopely) health care services (Bravo Health, Assurex Health, Bright Health, Accolade), life sciences (Fluidigm, NxStage) marketing and advertising (BounceX, TubeMogul), and enterprise software and services (Telogis, DocuSign, Drillinginfo, Simplus, Pindrop, Dataminr).
Karey formed the concept for Cross Creek while working as a portfolio manager at Wasatch Advisors, where she spent over 15 years managing small-cap growth stocks. Over time, she saw a need to develop expertise in venture capital, to better understand emerging themes and competition. In 2006, she founded Cross Creek within Wasatch Advisors to address that need and went on to lead the Cross Creek team through its transition to an independent firm in 2012. She also served as a member of the Wasatch Advisors Board of Directors for 17 years. Independent of Cross Creek, she serves on the boards of directors for MEDNAX, Inc. (NYSE:MD) and ARUP Laboratories.
Karey holds a Chartered Financial Analyst® (CFA) designation, as well as bachelor’s degrees in finance and French from the University of Utah. She also studied at the Université d’Angers in France. She enjoys skiing, hiking, and especially traveling with her husband and four children, together known as the “B6.” CFA® is a trademark owned by CFA Institute.
Consumer Internet & Digital Marketplaces Health Care Services & Life Sciences
Marketing & Advertising
Enterprise Software & Services
Her bio is taken from * https://www.crosscreek.vc/karey-barker
Below are the She-VC Questions we discussed:
1. You have been an Investor for over 30 years starting out in the public equity markets and a now venture capital. How has your public market investing experience shaped your investment thesis in the private venture market?
2. Can you elaborate about the new market opportunities in private growth companies? And how has the market changed in the last 5 years?
3. It is said that venture capital is all about identifying patterns in time. Yet some of the bigger ideas are unpredictable and sometimes those investment decisions can be non-consensus among Partners. To invest in such unpredictable big ideas one has to learn and see things differently, analyze markets that others don’t necessarily find exciting. Do you agree? How important are patterns to Cross Creek?
4. Do you see non-institutional investors moving into later-stage investing since the small cap public equity marketing is shrinking? How can they do this?
5. Unlike a hedge fund, private equity liquidity has been an issue for some investors for a long time. During an unusual time like this, how do you approach the liquidity question to your incoming LPs, especially the individual investor who may be more averse to illiquidity? Has your risk profile changed over the years especially more recently during COVID-19? How important do you feel time-diversification /vintage year is when thinking about a venture-oriented portfolio?
6. Cross Creek has two primary venture strategies -- investing in both late-stage companies and leading venture capital funds. In total, you have seen 21 IPOs and 15 acquisitions by public companies in your portfolios over the years – not to mention even more by private acquisition. Can you elaborate on some or your successful investments along with perhaps some of your not so successful investments?
7. By recycling, GPs are extending the capital pool to deploy. Can you elaborate on how this strategy benefits your LPs?
8. What is your take on distributing cash vs distributing public securities? In your view, what benefits and LP more?
9. For fund managers there is always the question on what is a good expected return? Achieving expected returns is not simply a function of high multiples. It depends on the risk profile, and time invested and stage of capital deployment and overall market? Now when you are a fund of fund and also a direct late stage investor, how do you navigate those questions?
10. Valuation is both an art and science. What are your most important criteria when evaluating late-stage private opportunities and how do you value the performance data during your due diligence process?
11. Now heading back to the big picture, what is the biggest misconception you are seeing about venture firms currently, particularly smaller venture firms?
12. What types of venture funds/companies do you expect to be most successful coming out of the COVID-19 crisis?
13. Do you feel that this is an opportune time to invest in venture capital? Are you still seeing strong capital flows and/or do you feel valuations are optimal?
14. To invest in such unpredictable big ideas one has to learn and see things differently. I think venture capital is not a job but it is a lifestyle.
So how do you prepare yourself for such a lifestyle. What learning habits that you have or acquired
How do you maintain work life balance?
How has being a female in a male-dominated space help you see things differently?