Juan Sabater has more than 25 years of private equity investing and investment banking experience. He’s currently co-president and partner at Valor Equity Partners, where he focuses on investor relations, investment prospect generation, due diligence of potential investments, and investment structuring and execution. Valor has been a part of Addepar’s journey since 2014.
Please tell us about your background. What led you to Valor and Addepar’s Board of Directors?
I can tell you this—growing up, I never envisioned being in private equity. I was born and raised in San Juan, Puerto Rico, and moved to New York at age 13. For college, I attended Princeton with the help of its Army ROTC program. I also studied history at Oxford’s Mansfield College, earned my J.D. from Stanford University and served for a bit in the military.
My professional experience began in the intense environment of mergers and acquisitions at the Skadden, Arps law firm in New York City. From there, I moved into investment banking eventually ending up at Goldman Sachs, where I served in a variety of roles including COO of Goldman’s Brazil office, Deputy to the COO of its Investment Banking Division and as a Managing Director.
Following Goldman and before joining Valor, I partnered with a law school friend to help build Augeo Affinity Marketing into a successful private company in the affinity and loyalty space. I remain an executive co-chairman at Augeo. At Augeo, we have sold two subsidiaries for approximately $500 million and continue to have a growing business with approximately 350 employees. All that said, my time and attention is dedicated to Valor. I met Antonio Gracias, Valor’s Founder, CEO, and CIO while serving on a not-for-profit board and, after several years as an advisor, I joined the firm full-time in 2010. Not only is Valor a successful partner and investor in some extraordinary companies (like Addepar), we also are a certified diverse-owned firm (which is rare in the finance industry).
What attracted you to Addepar?
It’s the passion of the people who work here — their desire to do something transformative. Addepar has an extraordinary product and team, with a compelling business model. It’s clear that the people truly believe in what they’re doing and are heavily invested in the opportunity to make a profound difference in investment management.
Addepar is growing quickly under the leadership of Eric Poirier, whom I’ve known for many years. What makes the company even more special is the way everyone works together and helps one another. There’s a multiplier effect. We’re creating solutions that make life easier for our clients and their clients.
And along the way, this has enabled Addepar to build a platform aggregating and reporting on $4 trillion in assets. Not many companies can talk about business in the trillions! And the Addepar platform just keeps growing.
What trends are you seeing in fintech, and is there anything that’s surprised you lately?
First, surprises in business should never be a surprise. Clearly, we’re in a very challenging time. We’ve known for a while that the cycle of growth was coming to an end. The pandemic-induced financial crisis led to massive monetary expansion as our government sought to refloat the economy.
This has been followed by global shocks to the system due to the major land war in Europe and related supply chain impacts. Demand is up, supply has been pressured down and people have savings, so the result is a surge in inflation.
Recession speculation means there will be a large volume of dollars chasing the best opportunities — including in fintech — while avoiding companies that lack pricing power, are not sufficiently differentiated, and are unable to prove they have a sustainable business model. In periods of inflation, efficiency becomes even more important. Automation and computer-based distance learning will likely increase. That said, I believe that there will always be a demand for human engagement. While organizations will certainly leverage new technologies to run their businesses more efficiently, the need for personalized human contact also will continue to be essential.
Why has technology adoption within wealth management been relatively slow?
I think there are a number of reasons: fear of change, embedded biases and complexity. Once you get past the up front resistance, integrating a new platform or solution isn’t easy. It creates risk both for the organization and for the people who are overseeing the transformation.
Being the first mover in a new area can be difficult. It’s easier to let someone else figure things out, and then follow once someone has proven that an approach will work. This is why what Addepar has accomplished is so impressive, and frankly, courageous. Addepar’s success is powerful and inspiring.
There’s been a lot of hype around the fintech category. But what’s not overhyped is the drive to leverage technology to provide better, more accurate and reliable information and services. Whether it’s back-office transaction services or a front-office wealth management platform, solutions that help clients more efficiently analyze and understand what they’re doing are very relevant and compelling.
What do you see in private equity investing over the next 5–10 years?
I believe the market is going to be much more volatile and ultimately downsize somewhat. Private equity investing has become increasingly commoditized. This will eventually lead to diminished pricing power and consolidation. Some industry leaders will get larger, while other firms may disappear. There will also be niche players that thrive by delivering specific types of value.
Investors will be reminded that venture capital can perform extraordinarily well at times, but can also be fragile—with early-stage companies more vulnerable during difficult economic periods.
So in the near term, we’ll see a rationalization of the industry. But remember, the U.S. remains one of the most dynamic economies in the world. At times, it may not seem like we’re making progress. But when you look back over the past ten years, it’s clear that as a society, we’re moving forward in exceptional ways with an extraordinarily bright future. New business formation is strong, and this includes companies led by women, Latinx, Black and LGTBQ individuals—among others.
You’re among the founding members of the board of My Brother’s Keeper Alliance, an initiative addressing the opportunity gaps faced by young men of color. What’s your focus there?
I’ve always been engaged in diversity initiatives. I’ve been very lucky in my life, starting with those scholarships that got me through school. So, I never forget my good fortune—and that’s why I’m involved not only with the MBK Alliance, but also with many other diversity initiatives.
I received a call from the White House during the Obama Administration asking if I’d be willing to serve as a Latinx voice to complement the growing number of Black voices in the initiative. It’s been a privilege to be involved with the MBK Alliance Advisory Council. The goal is to engage with at-risk Black and Latinx youth and provide opportunities that can help change lives. It’s been an incredibly compelling and humbling experience. Every life is full of dreams and potentials, and if you can help unlock just one of them, you can potentially change the world for the better.
What advice do you have for the next generation in wealth management?
Start by cultivating a series of mentors. I’ve always sought the guidance of individuals of all ages. Those older than me have offered the wisdom of age and perspective, while younger mentors keep you up to date and relevant.
In terms of applying this advice, it’s important to be authentic. I believe that you can never do anything in life if you’re not. No amount of money is going to make you happy or attract more friends. Embrace who you are, and always be comfortable with yourself.
Then, use this advice in a way that’s constructive and truly makes a difference. Over time, I believe people will find that this approach enables them to lead a meaningful life that results in greater happiness and is much more sustainable.