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Deal Economy: Nardelli Dives Into Middle Market

Tickers in this article: BBY HD

NEW YORK (The Deal) -- Noted executive Robert L. Nardelli has remained busy since stepping down from his roles at Cerberus Capital Management, having already completed seven deals at his new private equity investment shop, by his count.

The former Chrysler Group and Home Depot HD chief executive discussed his new firm, XLR-8, in an interview with CNBC chief international correspondent Michelle Caruso-Cabrera at The Deal Economy 2014 conference on Thursday.

Nardelli, who stepped down from Cerberus in March 2012, said his new investment and advisory firm's pipeline for transactions remains robust.

XLR-8 focuses on middle market companies across various industries, including energy, industrials, retail and services, Nardelli said.

Given his firm's long-term investment strategy, most investments have only modest leverage, or none at all, he added. "Enhance the core," he said. "What's crippling many [companies] is they forget what got them there."

For now, XLR-8 will concentrate solely on North America, Nardelli added. "You need to have a strong bench to do something in China. You need a strong brand to get in the door," Nardelli said. "Given we're a start-up, that's not where we want to go."

When asked about well-positioned companies today, Nardelli pointed to Richfield, Minn.-based Best Buy and Atlanta-based Home Depot , describing the latter as a "gold mine of opportunities."

It was only about four years ago that CNBC named Nardelli as one of the "Worst American CEOs of All Time," a couple years after he departed as CEO of Home Depot.

Despite being credited for growing Home Depot's revenue and size after taking the reins in 2000, it was the company's lackluster stock performance that left investors dissatisfied. When Nardelli departed from Home Depot in January 2007, he earned further criticism after scoring an exit package estimated at around $210 million.

Nardelli was named CEO of Chrysler on Aug. 5, 2007, but struggled to turn the automotive company around. Chrysler, of Auburn Hills, Mich., filed for Chapter 11 protection on April 30, 2009, the same day Nardelli revealed plans to resign as chief executive.

-- Written by Sarah Pringle