Carlton James Group is a private investment group that is known for specializing in the investment and development of products and services that are suitable for adoption during economic downturns. To learn more about the firm, Pulse 2.0 interviewed Carlton James Group founder and CEO Simon Calton.
Simon Calton’s Background
Throughout much of the 2000s, Calton worked as a financial advisor in the UK. But once the 2008 financial crisis emerged, Calton saw a need for many real estate development projects – an industry in which financing had been halted by the economic crash – to find financing from unconventional sources outside of traditional banks.
“This marked the birth of the Carlton James Group, which became a global operation quite quickly, though it was mostly focused on real estate for the first five years,” said Calton. “However, in the mid-2010s, we began making strong business connections in the ever-evolving world of technology and began establishing investment work within that field, while still maintaining a presence in real estate. From there, we expanded into a wide spectrum of industries, from music to sports, to publishing, and much more. We were rapidly, but carefully, expanding our scope and learning quite a bit about the behaviors of the global economy along the way, always keeping in mind our ultimate endgame of successfully exiting each investment we worked with. This all came to a head in 2018 when our team took everything we’d learned from every investment and structuring we’d been a part of and created the Diversified Alpha Fund. With this fund, we compiled all of our intelligence on the impacts economic cycles had on each of the industries our team had worked in and combined it with the knowledge we’d gained on how to successfully exit an investment and put it all into one, centralized opportunity.”
Evolution Of Carlton James Group’s Thesis
The firm’s growth was organic. “We started in a single area (real estate), but naturally progressed into other tangentially-related markets through the business connections we had made along the way,” Calton explained. “But, while the types of funds and structurings we worked on, and the industries we worked within, changed and evolved over time, the one key goal our team always kept in mind was working toward a clear finale. What does a ‘finale’ look like? Well, every business essentially has two major facets: the first being the actual function and day-to-day operations of the company, and the second being the ‘endgame,’ or some semblance of conclusory finality. Whether that finale is your company being sold, executing a clean succession plan or merging with another business, you need to have an ultimate goal in mind – a purpose that the day-to-day functions are working toward. On our team, the endgame for each venture has always been to carry out a successful exit for each of our investments. Our work has evolved around it, but our mission has always been cemented.”
Below is a video overview of the firm:
What have been some of the Carlton James Group’s most significant milestones?
“Some of our most discernible milestones are our founding in 2008, our expansion out of real estate investments in 2013 and the creation of the Diversified Alpha Fund in 2018,” Calton replied. “Beyond those, one of our most luminous milestones came in March of 2020, when the SARS-CoV-2 pandemic became a global concern, causing markets to flail overnight. While many businesses were unable to survive or were at least grievously wounded by the brutal 2020 economic landscape, the Diversified Alpha Fund held steady, seeing 15% growth throughout that year and has continued to steadily grow in the years following. This has been a clear sign to all those who currently are or may be interested in working with us, that our strategy is always prepared for economic downturns and uncertainty; the Carlton James team works tirelessly to identify and properly protect its portfolio from these unforgiving economic bust cycles.”
Specific Investment Stories
— Back in 2015, Carlton James Group started a tech company with a scientist in North Dakota, which has since gone public, and is now preparing to make some notable announcements regarding the technology it has been testing that aims to revolutionize the battery market.
— Another company Carlton James Group worked with was in publishing, an industry that fared very poorly amid the pandemic. With Carlton James Group’s help, they refused to roll over and accept the grim fate that befell many of their industry peers and instead used their content to fix significant issues within the e-commerce market: when Google changed its search functionality to eliminate the use of keywords, many e-commerce sites struggled to drive a viable stream of web traffic to their sites. The company Carlton James Group worked with addressed this dire issue by using written content to help direct that much-needed traffic to these sites that were struggling to make a decent profit.
Assets Under Management
The assets under management (AUM) of all Carlton James Group’s products total around $120 million. “Our metrics have remained rather strong – even in the face of economic turmoil – with about 12% growth each year, on all of our investments,” Calton shared. “What’s interesting is that in addition to the companies we invest in paying back our initial investment amount, with interest, we also often receive an additional financial token, be it profit shares, equity stakes, or something else, which just this year has begun to blossom, producing observable value, which will only continue to grow in the coming years.”
What are some of the industries that the Carlton James Group is focused on? The Carlton James Group has 4 different verticals that allow it to thrive, no matter the state of the economic landscape; investment diversification is paramount to our company’s strategy and success. The verticals are as follows:
1.) Real Estate: The industry Carlton James Group started back in 2008. Here, Carlton James Group lends money to companies within the real estate market and has a firm grasp on the industry’s relationship to the economy’s cycles. And this has been a reliable industry for investment from the outset.
2.) Energy & Renewable Energy: Traditional energy is quite defensive; if the market crashes, energy typically remains strong as its a societal necessity no matter the state of the global economy. And renewable energy is a less-predictable speeding bullet with new technologies and green energy solutions evolving and expanding fast, receiving quite a bit of funding from national governments across the world as many nations and companies are racing to create the most effective and affordable industry-standard green energy solutions to be adopted worldwide. It’s an exciting industry, but Carlton James Group’s team is very careful with our investments within it as there are new companies with new promises sprouting up with each passing day.
3.) Technology: Though investing in this industry may seem strange for a company that prioritizes the ability to weather punishing economic downturns, which often crash tech markets with swift justice, Carlton James Group’s team makes the savvy move to invest in technologies that bolster and advance efficiency for companies in various industries. This is quite advantageous during periods of an economic bust as the moment a company starts to see sagging profits amid a recession, leadership quickly looks for tech solutions that will streamline company processes and improve operational efficiency. This is where Carlton James Group’s efficiency tech investments enter the picture: the businesses Carlton James Group works with give these writhing companies the necessary productivity improvements to weather the often-lengthy economic storm.
4.) Sports, Media & Entertainment: These industries operate on their own cycles, independent of the traditional economic cycles that impact most markets. And this is due to their unpredictable relationship with unceasing technological innovations. They are constantly being disrupted by era-defining advancements in technology, leading to massive overnight changes in their markets. Plus it sounds risky to invest in something so seemingly volatile. But with meticulous research and planning, you can connect the right sports/media/entertainment investment with a complementary technology investment to result in wildly successful returns during otherwise stiff economic periods.
Differentiation From Other Firms
What differentiates the Carlton James Group from other firms?
“Investments and assistance from most other firms are viewed as a given company’s ‘exit strategy.’ That’s not what we do; we want to work with the companies we invest in to grow, advance and complete a proper exit from us, down the line. Working with us isn’t the endgame, but we’ll help you get closer to reaching yours,” Calton answered.
Future Company Goals
What are some of the Carlton James Group’s future goals?
“In the immediate future, four of the companies we’ve invested in, across a wide variety of unique industries, are slated to formulate exit plans from us at some point this year,” Calton concluded. “Long-term, we plan to continue fine-tuning and executing our stringent investment onboarding process that will lead to even more strong, communicative collaborations, resulting in financial growth and ultimately ending in a successful exit. We know what we’re doing and our process works wonderfully; the next steps are simply to continue expanding our reach, to further carry out our mission.”
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