====== Certares Management ======
Certares Management is a prominent global [[Private equity firm]] founded in 2012 by veteran travel industry executive [[Greg O'Hara]]. Headquartered in New York, the firm has carved out a unique and powerful niche by focusing almost exclusively on the travel, tourism, and hospitality sectors. Unlike generalist investment firms that might dabble in everything from software to manufacturing, Certares brings deep, operational expertise to the table, allowing it to identify and cultivate value in businesses that many others find too complex or cyclical. Their approach is hands-on, often involving partnerships with existing management teams to drive growth, improve operations, and navigate the industry's inherent ups and downs. By leveraging a global network and a flexible mandate to invest across the capital structure—from outright buyouts to providing loans—Certares acts as a specialized capital provider and strategic partner to a wide range of companies, from iconic brands to innovative startups, all centered around the theme of human mobility and experience.
===== The Certares Playbook: Beyond Just Booking a Hotel =====
Certares' success isn't just about picking the right companies; it's about a disciplined and specialized strategy that allows them to see opportunity where others see risk. They operate with a clear playbook built on industry expertise and flexible investment structures.
==== Sector Specialization: The Ultimate Home-Field Advantage ====
The travel and hospitality industry is notoriously volatile, subject to economic cycles, geopolitical events, and even pandemics. For generalist investors, this volatility is a deterrent. For Certares, it's an opportunity. Their team is stacked with professionals who have spent their careers running airlines, hotel chains, and travel companies. This //insider knowledge// allows them to:
  * Accurately assess the long-term [[Intrinsic value]] of an asset, even when its current earnings are depressed.
  * Understand the operational levers that can be pulled to improve a company's performance and profitability.
  * Identify emerging trends and disruptive business models, like the shift towards an [[Asset-light model]] in hospitality.
This deep "[[Circle of competence]]" gives them the confidence to make bold, often contrarian, bets on the sector's long-term resilience and growth.
==== Flexible Capital, Flexible Solutions ====
Certares isn't a one-trick pony. The firm invests across a company's [[Capital structure]], tailoring its investment to fit the specific needs of the business and the opportunity at hand. This flexibility is a key strategic advantage. Their primary investment types include:
  * **Private Equity:** Acquiring controlling or significant minority stakes in companies, often through structures like a [[Leveraged buyout (LBO)]] or a [[Management buyout (MBO)]].
  * **Growth Equity:** Providing capital to established, growing companies in exchange for a minority ownership position to help them scale operations or enter new markets.
  * **Structured Equity:** Using hybrid securities, such as convertible preferred stock, that offer downside protection while retaining upside potential. This is often used in more complex or uncertain situations.
  * **Credit and Debt:** Providing loans, typically [[Senior debt]], to travel and hospitality companies. This is a lower-risk strategy that generates steady income and keeps them connected to the industry's pulse.
===== High-Profile Journeys: Certares in Action =====
The best way to understand the Certares approach is to look at some of its landmark deals, which often make headlines for their scale and strategic vision.
==== The Hertz Turnaround ====
In one of the most notable turnarounds of the post-pandemic era, Certares, alongside [[Knighthead Capital Management]] and [[Apollo Global Management]], led a successful bid to acquire [[Hertz Global Holdings]] out of bankruptcy in 2021. While many saw a broken company crippled by the collapse in travel, Certares saw an iconic global brand with a massive fleet of vehicles that could be repositioned for the future. The investment was a classic example of buying distressed assets at a significant discount and actively managing them back to health and profitability.
==== Elevating Amex GBT ====
Certares has a long history with [[American Express Global Business Travel]] (Amex GBT), the world's leading business-to-business travel platform. In 2014, Certares led an investor group to acquire a 50% stake from American Express, transforming it into a standalone joint venture. Years later, they guided the company to the public markets via a [[Special purpose acquisition company (SPAC)]], a move that provided new capital for growth and technology investment while allowing early investors to realize a significant return.
===== A Value Investor's Perspective =====
For the individual investor, Certares Management offers a masterclass in several core principles of [[Value investing]], even though it operates in the private markets.
  1. **Invest in What You Know:** Certares' laser focus on the travel sector is a perfect illustration of staying within one's circle of competence. Their expertise gives them an analytical edge that is difficult for others to replicate.
  2. **Be Contrarian:** Their willingness to invest heavily in travel-related businesses during the depths of the COVID-19 pandemic is the epitome of being "greedy when others are fearful." They recognized that the temporary crisis had created a historic opportunity to buy world-class assets at bargain prices.
  3. **Focus on Business Fundamentals:** Certares looks past short-term market noise to the underlying operational strength and long-term potential of a business. Their hands-on approach to improving operations shows a commitment to creating fundamental value, not just financial engineering.
While you can't directly invest in a private firm like Certares, their strategy provides a powerful lesson: developing deep knowledge in a specific area and having the courage to act when that area is out of favor can be a rewarding path to long-term investment success.