My annual New Year routine is to read James Clear’s “Atomic Habits.” The post-read high results in a better version of myself at least for a few months ; ) I hit the main points below with a bit of commentary on how it applies to us at Pier.
Small habits make a big difference:Clear emphasizes the transformative power of small habits. Conor and I are in the early innings of a 25+ year vision for Pier. The power of compounding incremental 1% improvements over this time period is powerful. This is my annual reminder to commit to tiny, daily improvements.
Forget about setting goals, focus on your systems instead:2023 was the year of new systems. We implemented a CRM, a Loan Management System, and an accounting software which drove firm wide improvements in workflows, risk controls, and processes. In 2024, we will continue to optimize and integrate these tools to support our core activities as we scale.
Build identity-based habits:Decide the type of person you want to be. Prove it to yourself with small wins. The book suggests repeating mantras to yourself. For example, if you’re typically messy – you say to yourself: “I am a clean person” as you move through your house. You will then be inclined to tidy up real time and keep the house orderly.
Here are some of the identities we rally around at Pier:
“We are curious, knowledge seekers.”
“We are thoughtful and creative investors.”
“We are honest, nice people who deal counterparts like working with. We are not typical Wall Street.”
These identities drive small habits – be hyper responsive to counterparts via email, be generous with introductions to people in our network, take the extra time to sensitize a run off model with new variables.
The book is worth a full read through. Wishing you a prosperous and fulfilling 2024!
-Jillian
How do you treat your deal counterparts?
This month, we witnessed multiple examples of the costs or benefits of treating a deal counterpart poorly or well.
- We bid on a loan portfolio the week prior to Christmas. A broker ran a process, obtaining multiple bids. Our bid was the best economically, but it came with some tougher stipulations and diligence requests to close. Hence, it was not automatically accepted. After a strange few days of silence before Christmas weekend, the broker came back that Friday informing us that the seller was off on vacation already. They asked if they could get us an answer in the new year. Though our bid had an expiration date on it, we kindly obliged. But, this decision making process was poorly managed and communicated. Either the broker or the seller (or both) are at fault for inefficiency and it rubbed me the wrong way. It will effect how we work together in the future or even to close this deal.
- A loan portfolio seller pulled a deal from us after they thought they found other financing. They came back after that fell through. Then, they pulled it from us again at the finish when that financing re-appeared last minute. During these cycles, the seller was non-communitive and putting out multiple fires. Amazingly, when all was said and done, the seller provided an honest and forthright mea culpa, and promised to try to find something to do again in the future. As frustrating as the path was, I would work with them again based on the farewell conversation.
- Lastly, we closed the purchase of a loan portfolio back in October. Prior to the close, the seller vetted potential buyers carefully for PR purposes, selecting us as a good and reputable counterpart. Since then, we've had frequent communication with them, maintaining that positive relationship. Last week, the seller came back to us with an additional loan portfolio to sell. While they will shop it around, they indicated they were happy with our purchase and would welcome an easy follow-on transaction.
I have seen firms spend millions hiring dozens of PhD's in order to squeeze out a few extra basis points on an investment. And yet they won't spend $49.95 for etiquette classes for that same team.
Treat others the way you wish to be treated. In an industry such as ours, where everyone knows everyone and your reputation is your lifeblood of deal flow and closing, the Golden Rule reigns supreme.
- Conor
