Day 1 in the lower middle market and “What was in the water there?”

Business Buyer and Builder,

“Fewer than 400 podcast downloads in the first 24 hours (btw, this has never happened before)…”

I knew immediately that this episode was not going to be popular… Still, I was excited to prepare for the episode, do the research, buy Harvard case study materials, read, and listen to interviews… Why is it not popular?

Well, it’s because it’s about Bowles, Hollowell, Conner & Co; most people have never heard of the firm, nor of its co-founder, Erskine Bowles. Founded in 1975 in Charlotte, North Carolina.

What makes it worth studying (and, in your case, listening) is that Tiger Cub hedge funds trace back to Julian Robertson and Tiger Management.

There are private equity and credit firms that trace back to Michael Milken and Drexel Burnham Lambert.

How about our world, lower middle market private equity and M&A advisory?

Again… you have to look at Erskine Bowles and Bowles Hollowell Conner & Co.

Depending on what market you are in, knowing the other participants, players, and stakeholders in that particular ecosystem proves to be critical for long-term success. We firmly believe that relationships and trust-building drive the lower middle market over the long term.

Over the last couple of decades, you can see BHC alumni who have gone on to become founders and senior professionals at private equity and M&A advisory firms, primarily scattered throughout the East Coast of the US.

What are the qualities of a firm that generated so many talented alumni that then go on to build successful firms that endure?

“What was in the water there?”

Cultural Hallmarks:

>Attention to detail (Bowles previewed every document. “It didn’t matter what it was - even the smallest letter had to be exactly right and very thoughtful.  Work was graded “A” or “F” - no middle ground. I really think that is why so many of these firms that have come out of the Bowles Hollowell culture have done so well and endured. We learned the business the right way.”)

>No internal competition between bankers - Strongly collegial and non-political

>First-name culture across levels (“If you asked Erskine Bowles, he would say I was his partner. If you asked me, I would say we all worked for Erskine. There was a level of trust and mutual respect in the company, it was remarkable. There was a zeal about working there.”

>Emphasis on mutual respect and teamwork

>Business cards of the company’s top executives didn’t include titles

>People are hired as long-term partners, not short-term résumé builders

>Balance of work and life mattered

Today, an entire generation of investors inherits a way of underwriting risk, structuring deals, and deciding what matters. That is what makes it so special.

Links to Apple podcast, Spotify and YouTube.
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I will keep it short today; talk to you very soon. Next time, I hope I can share more details about a specific event that is coming for business buyers and holdco builders.

Take care,

Mike Markus / PrivateEquityGuy