Jahm Najafi, a private equity investor and philanthropist, recently shared insights into his investment career in a rare interview. Originally from Iran, Najafi immigrated to the U.S. in 1975 and has since become a successful investor, launching the Najafi Companies in 2002. His most lucrative investments include a $100 million bet on Network Solutions, which he sold for $800 million, and a 10% stake in the Phoenix Suns, now worth $400 million.
Najafi believes that geopolitical risks, such as U.S.-China relations and conflicts in Ukraine and Israel, are major concerns for investors today. He emphasizes the importance of liberalization and trade policies in driving global economic growth. Najafi also sees opportunities in identifying unique geographic areas or industries facing challenges, such as Ukraine, which he views as a resilient nation with potential for significant post-war development.
In discussing his investment philosophy, Najafi highlights the importance of partnering with the right management teams and focusing on fundamental principles. He believes in allowing for small mistakes and learning from them, as well as making strategic decisions based on economic dislocations. By identifying undervalued assets in industries like telecom and internet services, Najafi has been able to capitalize on market opportunities and generate significant returns.
One of Najafi’s most successful investments was in Network Solutions, a domain registrar acquired in 2003 for $100 million and later sold for $800 million. By recognizing the potential for additional online services beyond domain registration, Najafi and his team tripled Ebitda and doubled revenue within three years. His approach to thinking differently about businesses and industries has been a key factor in his success as an investor.
Reflecting on lessons learned from failures, Najafi mentions a content development business called Resolution that ultimately failed due to timing and execution issues. He stresses the importance of understanding industry dynamics and adapting strategies accordingly. Despite setbacks, Najafi remains focused on seeking out unique opportunities and identifying unusual pricing parameters in the market.
Looking ahead, Najafi advises investors to be authentic, make strategic decisions wisely, and continue learning and gaining experience over time. He recommends books such as William Green’s “Richer, Wiser, Happier” and Peter Lynch’s “One Up On Wall Street” for valuable insights into successful investing strategies. With a wealth of experience and a track record of successful investments, Najafi’s approach to investing serves as a valuable guide for aspiring investors in navigating today’s dynamic market environment.
