In this episode, Carlyle Group CEO Kewsong Lee discusses how the pandemic has reshaped his investment outlook, why he thinks the biggest risk as an investor is not taking any risk at all, and why EQ—as much as IQ—shapes a successful investing career.
On how he’s thinking about risk in the new investing landscape: “I think the biggest risk a firm can take right now is not taking any risk at all. I know at Carlyle our mentality has been: we're going to coexist and adapt in this new world as opposed to wait it out and then return. I would point out while everybody's looking for the recovery, etc., I kind of view it as: it’s not the new normal, but it's the ‘new-new.’ I would say a lot of folks are trying to think about what's changed and what's not. The bigger issue for me, I think—as a risk—is to try to think about what's really going to be different? We have to all understand what changes are temporary versus what changes are permanent and structural. And that's the key, I think, in terms of appreciating risk and the key thing for investors to understand as they try to navigate through this complex environment.”
On what makes a successful investor: “I think over time from a personal perspective, certainly EQ is exceptionally important. I'm not saying IQ isn't important, but I'm saying great investors, in my mind, in the private equity business also have a very good sense for EQ. And they have really good pattern recognition. A lot of times it's not about just the granularity of putting a deal together. It's the ability to instantly and intuitively appreciate certain types of patterns based on what they're seeing in front of them and to have an instinct or an intuition as to what makes for a good deal.”