- “Coming together is the beginning. Keeping together is progress. Working together is success.”
- Henry Ford
Our Industry Speaks Alignment.
We Live It.
D Cubed’s approach to alignment is unique in the private equity industry and revolves around a full circle of alignment amongst our investor base, our partner companies and ourselves.
In order to properly align the wealth creation opportunity of our professionals with our investors’ and our partner company executives’ success, the senior professionals at D Cubed have contractual ceilings on annual compensation. As a result of this “success through success” model, atypical by almost any standards in the financial services industry, our professionals are truly aligned with our investors and can achieve truly substantial earnings only when our investors experience strong returns. In addition, particularly in the context of a concentrated investment model, the financial rewards for D Cubed professionals – like those of the executives at our partner companies – are highly dependent on each partner company’s success. As a result, executives at companies where we invest will always know that our success has a far deeper tie to their success than that which has generally become the reality of private equity.
Senior leadership’s conviction to invest financial resources into the firm’s operations rather than “take home” a greater share of the charged fees is based on the belief that intelligently investing into a business (in this case D Cubed itself) ultimately yields greater returns than a short-term approach of siphoning off cash flow streams that could ultimately drive improvement and growth (in this case of the quality and value of investments and funds managed by D Cubed). In particular, we use this additional available cash flow to access a far deeper and broader pool of talent and to provide greater overall support to our partner companies than would otherwise be possible – all toward optimizing the creation of additional value and the likelihood and degree of success of each investment.
Finally, our model also tremendously minimizes the incentive to scale through asset aggregation, as the earnings of our senior professionals are driven by the success of investments as opposed to fees from assets under management. As a result, this approach integrates fully with our deep focus on being returns – not fee – driven, and on thoughtfully investing and creating intrinsic value rather than focusing on “putting money out”.
At D Cubed, alignment is not talk and it is not a term used lightly. Instead it is an integral part of the structure of the firm itself, of our relationship with investors, and of our relationship with the executives and all ongoing investors at our partner companies. We share the risk and we share the reward. At D Cubed we win in true alignment with all of our partners.