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The Sam M. Walton College of Business

Episode 166: How to Bring an Entrepreneurial Mindset into Your Career with Cedric Penix

March 16, 2022  |  By Matt Waller

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In this week's episode Matt sits down with Cedric Penix, Senior Advisory for Enterprise Management Advisors and alum of the Walton College. Cedric discusses his vast experience in the private equity space especially with entrepreneurial ventures and his journey from Thornton, Arkansas to working around the world in mergers and acquisitions, internal auditing, private equity and advising. He shares his lessons learned along the way including tips for students to make the most of their time in college.

Episode Transcript

Cedric Penix  0:01  
Always have a plan even if the plan is going to change, have a plan and action points behind trying to reach it.

Matt Waller  0:10  
Excellent professionalism, innovation and collegiality. These are the values the Sam M. Walton College of Business explores in education, business and the lives of people we meet every day, I'm Matt Waller, Dean of the Walton College, and welcome to the Be Epic podcast. I have with me today, Cedric Penix, who is senior advisor at enterprise management advisors, LLC. He has an extensive experience in accounting, finance, m&a, fund management, and so forth. And we're going to get to that in a moment. But Cedric graduated from the University of Arkansas, in 1986 in accounting, and Cedric Are you from Arkansas?

Cedric Penix  0:58  
I am I grew up in Thornton, Arkansas, South Arkansas.

Matt Waller  1:02  
How did you decide to major in accounting?

Cedric Penix  1:05  
The simple answer is I've always been a numbers guy, even as a teenager, elementary school student and alike, I thought that I was pretty good at numbers I did well in math and science, and ultimately saw that as an opportunity for me to, you know, kind of use what I thought to be my skill sets to kind of move on to the accounting field. So I had decided by my junior year in high school that I wanted to be an accounting major.

Matt Waller  1:33  
Well, that's great. And so then right after you graduated, it looks like you went to work for Arthur Andersen, as it was called then.

Cedric Penix  1:42  
Yes, sir. Went to Arthur Andersen, December of 1986, right out of graduation, and started in the oil and gas division in the Houston office, clients were large oil and gas companies. So the Pennzoils, Shells of the world and the like, had a tremendous amount of exposure to audit, and more importantly, fantastic people who were leaders in the space and provided some outstanding guidance for me in terms of career development and the like.

Matt Waller  2:13  
So would you mind talking through your career path and decisions you've made and the benefits and challenges associated with the path you decided to take?

Cedric Penix  2:24  
First opportunity, as you've already mentioned, is Arthur Andersen, it was there that I was exposed to mergers and acquisitions, to be honest with you, probably six months in. I was working on a project where we had to essentially put together a forecast toward potential buyout, I knew absolutely nothing about it. And was was able to learn from the senior guys, the partners and managers at the firm at the time, how to think about those things. That experience sparked my interest in mergers and acquisitions, buyouts in the like 20 years later. I spent two and a half years almost three years at Arthur Andersen after having a number of discussions with with the partners, there trying to figure out what I wanted to do next, either deciding that I wanted to have a career path in public accounting in Arthur Andersen, you know, kind of move up the ranks, or whether or not I wanted to do something else. It was at that point in time that I fell in love with the idea of going back to business school. And the next decision for me was to leave public accounting, work in industry and essentially make more money so that I can save and go to a full time MBA program. From there, I went to Intermetics Inc, which is no longer around, but it's in the Houston area in Angleton, Texas. They were an early designer and manufacturer of implants, medical devices, pacemakers, joints, things of that nature. That company ultimately got acquired by the likes of Medtronics and Boston Scientific. While there, I was working as a senior auditor, but working for the CFO, an MBA from the University of Chicago. We had multiple conversations about career path, he made sure that I got exposed to things that MBAs would be exposed that, you know, decision making analysis and operations and things of that nature. got tons of exposure at Intermetics. I had the opportunity to go to Europe for the first time and work there for seven or eight weeks, without knowing the language that too was interesting. went to Switzerland, the show to fall, spend some time focusing on operations and efficiency, I guess I'd say. So the question was, you know, why isn't this organization producing as much as we think it should? So I spent, you know, a couple of months trying to figure that out, reporting back to the CFO. That being said a couple of years in we all had kind of planned at that point that I would move on to business school. So I started to look at business schools around the country, and ultimately ended up selecting Anderson School at UCLA moved to Los Angeles in 1991, graduating a class of 1993 heavy focus and emphasis on entrepreneurship. And I caught an entrepreneurship bug while I was there. So in my class, a class of 360, most of us had something to do with entrepreneurship. And ultimately, for me work on a company that was called too hype action where was a sports apparel and design firm, of which I had a relative that was involved and some of his partners. I became the CFO right out of business school for that startup company. So I fulfilled my entrepreneurship book, almost immediately out of business school, left Los Angeles, moved to Denver, Colorado and spent time in both Denver and New York. doing too hype actionware, too hype was a designer of sports apparel and design firm, probably best known for its designs with Reebok and many of its basketball athletes in the early 90s, inclusive of Shaquille O'Neal, I did that for two years, about two and a half years and ultimately, for me realize that I liked entrepreneurship. But it was not for me, it wasn't paying enough, the returns weren't enough for the money I just spent at business school. That being said, I made a decision to move back to Los Angeles and I went to work for my second public accounting firm Coopers and Lybrand went to work in their financial advisory group, FAS, as it was called, at that time doing by side advisory engagements for private equity firms. So what does that mean? I would do quality of earnings for target companies I might do you know forecast for combined entities. I may help with post merger integration strategies and things of that nature, did that for probably two and a half years and ultimately went in as a as a senior and was promoted to manager provided services to many of the large private equity firms around the country that were clients of Coopers and Lybrand, very entrepreneurship driven the business itself, we had the liberty of selling engagements ourselves, that part I really, really liked and more importantly, that was the first time that I saw an opportunity for wealth creation in the private equity space. I did that for two and a half years. And ultimately, I was recruited out of Coopers and Lybrand to go and work for a small SSBIC specialize Small Business Investment Company, it was called Fulcrum Venture Capital Corporation at the time. And that was my start into private equity on the principle investing side that fund's focus was to kind of focus on job creation, kind of before it was popular like it is now, it was job creation, investing in minority and women entrepreneurs, investing in urban core to kind of recreate economic vitalization. And at the time, we were doing growth equity, minority investments in companies, we would often be the first time that there would be institutional capital in those firms. So we would spend an inordinate amount of time trying to get systems together trying to get appropriate board representation together, and then at the same time, trying to add value to those companies in terms of our relationships as it relates to the sales growth and revenue and profitability, probably two years in we were able to raise another successor fine, that was called Fulcrum Capital Partners, a small amount relative to today's capital raise. But we raised that and continue making those investments into 2008 2009. timeframe. Course 2008 2009 comes along and we have a crisis with the economy. That being said, the economy was was such for the fundraising environment that we were not able to raise a third fund. What did we do? We made a pivot, my partner at the time pivoted out of private equity and became the CEO and President of Citi First Bank in Washington DC. I managed out the rest of the portfolio, finished that in 2011 2012, Got out of the investments, return money to our investors, and continued to do private equity deals and a fundless sponsor platform with a gentleman that we had invested in that Fulcrum had invested in probably seven or eight years earlier. We were able to do four or five platform deals between 2012 and 2017. All in the transportation and logistics space, had a pretty good run. As you know, just like with any other investment, you have some winners and you have some loser losers, you know, we had a fair share of both of those, I guess I'd say there. That being said, we exited out of our last independent sponsor deal 2018 2019. And I started to do consulting with enterprise management advisors, which is a turnaround management firm, that's its premise, I guess, I'd say is turnaround management, in terms of operations and the like. So I've been doing that for the last couple of years, as companies, you know, find themselves in trouble, whether it be with a bank, or you know, they recognize issues on their own in terms of needing some assistance in turning around their their operations and the like, we have a very strong history and success rate in assisting private equity firms, individual owners, and even banks in successfully exiting and turning around their, their firms. So that's where I am today, in between all of that, I guess, a couple of things that I didn't say, you know, while in the private equity space in the private equity funds, I often would roll up my sleeves, and go into the companies themselves. So I might sit in the CFO role, I may sit in the interim COO role, you know, whatever is required for the portfolio company itself to make some progress, you know, talent wise, if there was a decisions for a resignation of a C-level person, and you don't have enough time to replace them. And well, guess who, who got volunteered for the role, I'm now able to bring a lot of those experiences to what I do now, in terms of, you know, bringing value trying to figure out how to streamline things and become profitable sooner rather than later.

Matt Waller  12:06  
That transition to being in on companies like being a CFO or interim COO, I would think that would be quite challenging those sudden jump into a role like that, in a company.

Cedric Penix  12:20  
it absolutely is challenging. And, and most of the time, if you're sitting on the private equity side, you have to remember private equity guys, they're concerned about their return, their preservation of capital, you have to do whatever you have to do to, within reason, to preserve your capital and, and make your money. It's a little bit different. On the operating side, you have to have that if a CFO or COO has agreed to take your money, then they've got to be aligned in that way. And then at the same time, you've got all of this operational stuff that you have to do you got to deal with people, you have to deal with making sure the financial statements are produced on a timely basis. Yeah, you have to understand what's in the financial statement, you have to I don't know, make sure payroll is made, you know, all of those types of things. So you're right. It's different. It's challenging. I just viewed it as as a way for me to gain some more experience and make myself more valuable for the next opportunity. I'm always looking ahead. What's next? And how can I make myself more valuable to the person that I'm speaking with?

Matt Waller  13:31  
Earlier, you mentioned that you had been in a few platform deals in transportation and logistics, between 2012 and 2017. What was that experience like?

Cedric Penix  13:47  
That was my first time doing it as an independent sponsor, private equity deal and structure. Without the backing of a private equity fund, a one off deal, we were able to finance with a family office, wealthy individual, we were able to do that, with the idea of trying to grow those companies. Actually, there were two of them. The first we did with a California based private equity firm, and partnered with a portfolio company that they already had, that was in the in the logistic space. We were doing fulfillment. And we figured out a way to combine the two entities, get them together. And ultimately, there was an exit from a multinational private equity firm that bought us out. So now my role in that was guidance more so than day to day operations. So the company had staff, it had a CEO, CFO, General Manager, all of those types of things. We were leaders in the sense of guidance strategy and the like more so than the day to day. The second one was in the trucking space, a little bit more hands on there, in terms of you know, kind of producing financial statements and the like but but those companies still had existing staff. So it was really more of about a strategy play for us, you know, so what are we doing next, strategically use some of the some of the MBA knowledge to try to figure out how we fit in the space and how we take advantage of that.

Matt Waller  15:17  
That sounds really interesting. So you got an undergrad in accounting and then an MBA, that's a pretty strong combination. And you know, many people refer to accounting as the language of business. If you could go back and change anything about your studies, not necessarily your major, but could could be, what would you change or your time at the university.

Cedric Penix  15:43  
So I graduated in three and a half years, I graduated in December, I had a another semester left. All of these years later, if I had to do it all over again, I would spend that extra semester I would have stayed on campus. That's first and foremost, I realized that there there are some experiences and the life that I would have liked to have had.

Matt Waller  16:04  
I often hear of students doing that and I always wonder why, life is short and there's a lot to be gained. I have four kids, and three of them have graduated from the U of A and one's a freshman here, my youngest, but one of my kids took five years. And I told all of them, I said, you know, if you decide to change your major, or you want to study something more, it's fine. One year in life is a small portion.

Cedric Penix  16:35  
I completely agree with that. That being said, what was I thinking, I was only focused on trying to get out into the career world and get my career started, you know, kind of what's next, I was focused on that. And in fact, had some help. Dr. Modisette was a mentor of mine, you know, I would often go into his office and just kind of ask him questions.

Matt Waller  16:59  
There's two things that strike me with what you just said, One, Professor Modisette cared about students, there's no question about that. But two, you went to seek more. And most students don't do that. Most students never try to talk to their professors about things, but I think it's wise.

Cedric Penix  17:22  
It was a tremendous amount of value for me in terms of, you know, trying to help me decide whether or not I wanted to go to industry or, you know, go to public accounting. So one of the things I didn't say is, prior to graduating, I did a couple of interns at Amoco over in Tulsa. So I was trying to make a decision about whether or not I would stay in the industry or go the public accounting route, and trying to figure out which one would send me the furthest the fastest. For me, that was public accounting. You know, I saw it as a way to, you know, kind of get some exposure to larger companies, an opportunity to move to big city you have to remember this kids from a small town. So I was pretty excited about about doing that too. And ultimately decided that public accounting was for me with Dr. Modisette's help, and a couple other administrators as well that were on the campus, you know, I would be remiss to not mention Dr. Lisle, gone. He was a mentor of mine is over in student affairs. And then so was Dr. Paul Harris, the Vice Chancellor for Student Affairs at the time, so they were mentors of mine as well helped me make those decisions. And along with Dr. Modisette, were always fans in the background. And all of these years later, I still think fondly of all of that time.

Matt Waller  18:46  
And you did grow up in a small town. You said Thornton, right? 

Cedric Penix  18:50  
Yes, sir. 

Matt Waller  18:51  
It's a population that's under 1000.

Cedric Penix  18:54  
it's actually under 500.

Matt Waller  18:57  
Okay, so it's very small, very some, for those of you listening who wouldn't know, its South of Little Rock, south of Pine Bluff. It's, it's close to Camden.

Cedric Penix  19:08  
That's correct. Correct. about 15 minutes.

Matt Waller  19:11  
And that's encouraging too, I think, you know, we really tried to recruit from these small towns in Arkansas. And some people don't take the opportunity or they think they can't make it that's something we really are focused on trying to overcome. You're a perfect example. I mean, really that part of south Arkansas is quite poor too.

Cedric Penix  19:37  
That's correct. Yeah. It's it's got a lot of got a lot of challenges. Yes, a place that you know, economics and you know, what have you right, but at the same time, wonderful people for me. I could not imagine a better experience as a high schooler and all of the support that I got for it from that school. Everybody was like encouraging all of our class, you know, take the next step, whatever that was right. And, you know, I had, let's see a couple of friends that had gone to the University of Arkansas, from Thornton High School and nearby Fordyce Hearth High School Camden as well, that I knew, you know, I was essentially following in their footsteps, and had the fortunate pleasure of having my parents as well, who were both educators as well. So they just kind of said, hey, where do you where do you want to go? Where do you think you want to go and made it happen and always kept me on a path to get there.

Matt Waller  20:36  
That's really encouraging to hear. And I hope many young people hear this and are encouraged by it. You've had an incredible career, a lot of accomplishments, and you graduated at a time when it was a little tougher to get jobs actually than right now. 1986 wasn't the easiest year to find a job.

Cedric Penix  20:58  
I agree. It was pretty tough. Lots of interviews, but then, you know, I will go back and say it was easier for me, because of the likes of Dr. Modisette, Dr. Don and Dr. Harris, I took the initiative to go to them and say, hey, I need you to be a reference for me.

Matt Waller  21:15  
And you know, it's hard for a professor to be a reference if they don't know you. 

Cedric Penix  21:20  
That's correct. 

Matt Waller  21:21  
You know, and so that's one of the other benefits of what you did, you know, going and getting to know some of these professors. I've had students come to me as Dean asked me to give them recommendation, I have never even seen them. It's very hard to give a recommendation.

Cedric Penix  21:38  
I made it a practice of going to class. Unless I was sick, I'd never be late, you would always see me in the first couple of rows.

Matt Waller  21:48  
Statistics show that students that are on time and sit in front do better.

Cedric Penix  21:54  
Well, I can't say I had all of that science with me on the stats. I was following what my mom and dad said number one, and then I was interested in getting to know the professors.

Matt Waller  22:04  
You know, and I think it also reflects conscientiousness for many of the things you've said, You've been conscientious, since you were in college, for sure. And that helps a lot.

Cedric Penix  22:16  
That's right, I would agree with you. I mean, if this message is going to undergrads, I would say, always have a plan, even if the plan is going to change, have a plan and action points behind trying to reach it, you may not always get your ultimate goal. And oftentimes it changes, you know, like in the private equity business, you know, you do a model. And the first thing you'll say is, Well, we did this model, but we already know what's going to change just looking for directional. Yeah. So for the for the most part, right. And that's the same way with life. You create a game plan, if circumstances are changes, then you you have something to pivot on. And it's been plenty of that in my life.

Matt Waller  22:59  
That is so important to know, right? Because it's easy for someone, a student to look at someone like you and think, wow, they must have just followed this path that led them to this great success. But in reality, life is full of pivots and uncertainties.

Cedric Penix  23:20  
pivots, and I can be even more specific, I mean, failures, I would even say, Yeah, you know, like, even in our fund days, not every investment was a successful investment. So you lose money. You feel bad about it. But you have to focus on what's the lesson learned out of the experience? What could I have done different? What should I have said, What should my strategy have been? You know, what have you right? And try not to make that same mistake again. You'll make others don't make that one again, learn from it and keep moving on.

Matt Waller  23:58  
That's so true. We all make mistakes, we all have failures. One thing I don't know if you know, Cedric, but now the department you graduated from the accounting department, it's now one of the few endowed accounting departments in the country. It's called the William Dillard, Department of Accounting Bill Dillard, the second who's the CEO of Dillards, which by the way, their stocks done really well over the past year. 

Cedric Penix  24:27  
Yes, they have.

Matt Waller  24:29  
Incredible, he graduated in 1965 from accounting, and he knew Modisette too. And he thought very highly of Modisette and many of the other professors, but he really wants our department to be one of the best in the world. And so he gave us a $10 million endowment, which is a lot. I mean, most of times when you hear about not a college I mean, you know, because our college was endowed with $15 million from the Walton family, but when you hear about a department being endowed, a lot of times it's 1 million, maybe 5 million at the most. He gave us 10 million, which essentially generates, you know, $400,000 per year, which can be used for all kinds of things, retaining faculty, faculty research, scholarships for students, etc, etc. It really gives us a competitive advantage.

Cedric Penix  25:30  
I would agree with you the accounting departments that I've seen across the country, I've seen a few seeing the ones that UCLA and USC and University of Texas and others, it compares very, very favorably, if not outperforms, and at least my experiences with all of those. And the thing that sets it apart for me was the faculty and staff themselves. And the fact that I could go to them and ask them questions, get some responses in a timely fashion and feel like they cared for me. Don't always get that other places that I go to.

Matt Waller  26:08  
It's got a great culture in our accounting department really, really good culture, great students. We're really proud of what you've accomplished, Cedric, and thank you for taking time to visit with me today. I really appreciate it. 

Cedric Penix  26:21  
Yeah. Thank you. Thank you for having me.

Matt Waller  26:23  
On behalf of the Sam M. Walton College of Business, I want to thank everyone for spending time with us for another engaging conversation. You can subscribe by going to your favorite podcast service and searching be epic. B E EP, IC

Matt WallerMatthew A. Waller is the dean of the Sam M. Walton College of Business, Sam M. Walton Leadership Chair and professor of supply chain management. He is also the host for the Be EPIC Podcast for Walton College.


Walton College's EPIC values -- Excellence, Professionalism, Innovation and Collegiality -- are the heart of Dean Waller’s podcast. Since the beginning of the series, Waller has interviewed business professionals, industry experts, CEOs and Walton College students to bring listeners first-hand accounts directly from the entrepreneurial world.


Waller is an SEC Academic Leadership Fellow and coauthor of “The Definitive Guide to Inventory Management: Principles and Strategies for the Efficient Flow of Inventory across the Supply Chain,” published by Pearson Education. He is the former co-editor-in-chief of Journal of Business Logistics. His opinion pieces have appeared in Wall Street Journal Asia and Financial Times.


Waller received an M.S. and Ph.D. from Pennsylvania State University and a B.S.B.A., summa cum laude, from the University of Missouri.

Walton College

Walton College of Business

Since its founding at the University of Arkansas in 1926, the Sam M. Walton College of Business has grown to become the state's premier college of business – as well as a nationally competitive business school. Learn more...

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We're sitting down with innovators and business mavericks to discuss strategy, leadership and entrepreneurship. The Be EPIC Podcast is hosted by Matthew Waller, dean of the Sam M. Walton College of Business at the University of Arkansas. Learn more...

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