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The Alternatives Mason: Building Alts Knowledge Brick by Brick | Episode 13 | Growing Up Banking Featuring Jamie Shulman
5 Plays6 months ago
Welcome to The Alternatives Mason: Building Alts Knowledge Brick by Brick. Banrion Capital Management uses technology to help independent advisors scale and educate themselves on alternative investments. Since education is such a big piece of the Banrion mission and business, we are excited to kick off this series to dive into the nits and grits of the alternatives space. Episode 13 "Growing Up Banking" features Jamie Shulman, Co-Founder and Fund Manager at Meriwether Group Capital
A banking veteran with more than 25 years of lending and management experience, Jamie brings an entrepreneur’s level of energy, engagement and creativity to Meriwether Group Capital. Jamie’s diverse experience in management, mentorship and strategic business planning for growing companies makes him an invaluable and trusted advisor, going far beyond the boundaries of traditional lending.
Over the years, Jamie has built a reputation as a highly effective change agent, able to help founders and business leaders realize their companies’ potential through sound strategy, P&L oversight, and all areas of financial analysis and guidance. This high-level overview gives Jamie unparalleled insight into the opportunities and challenges of the targeted lower middle market businesses and will be a critical factor in MWGC’s ability to select the best possible slate of borrowers for the Hero Fund.
Jamie’s experience spans commercial banking, middle-market banking, retail banking and community banking with an emphasis on commercial & industrial and commercial real estate operations. Having spent 35 years in the Seattle and Portland markets, he offers a familiarity with the region that enhances MWGC’s understanding of the circumstances and hurdles of growing a business in the Pacific Northwest.
Off the clock, Jamie’s enthusiasms include mixology and BBQ (especially when they come together), rabid fandom for the Seahawks, and taking time to recharge with the family along the Pacific Coast. He spends significant time in the non-profit world, contributing his expertise to multiple community organizations.
Connect with Jamie
Learn More About Meriwether Group Capital: MGC Website
LinkedIn: Jamie Shulman
Connect with Jamie on 𝕏: @jamieshulmanpdx
Learn More About Banrion: Banrion Capital Management
Follow Brittany on 𝕏: @Brittany_Mason
Follow Banrion on 𝕏: @Banrion_Capital
Subscribe to our YouTube Channel: @BanrionCapital
Important Disclosures:
The opinions expressed on the “The Alternative Mason Podcast” are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security.
It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results.
The guests featured on this program are participants on Banrion Capital Management’s platform. As such Banrion may receive payment for their participation as a platform partner.
Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing inv
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Transcript
00:00:00
Speaker
Welcome
Introduction and Company Overview
00:00:01
Speaker
to the Alternator's Mason Podcast with host Brittany Mason, Chief of Staff at Bonner & Capital Management. You'll learn how to build alternative knowledge brick by brick. Bonner & Capital Management uses technology to help independent advisors scale and educate themselves on alternative investments. Since education is such a big piece of what we do, we are excited to kick off the series to dive into the myths and bricks of the alternative space.
Meet Jamie Shulman
00:00:32
Speaker
Hi everyone, this is Brittany Mason, Chief of Staff at Bonner & Capital and we are back for another episode of the Alternative Mason right here live from the green couch. And I'm very excited today to have Jamie Shulman from the Merriweather Group Capital here today that we're going to be asking him some questions and getting to know, you know, his story and his background a little bit better.
00:00:56
Speaker
So a little bit on Jamie's background with over 25 years of banking experience. At the Merriweather Group Capital, he brings in entrepreneurial energy and strategic insights. He's known for his transformative leadership and he sells in guiding companies to their full potential through sound strategy and financial expertise. With the background spanning commercial, middle market, and community banking, Jamie's 35 years in Seattle and Portland markets in rich,
00:01:26
Speaker
Merriweather Group Capital's regional understanding. Outside of work, you also enjoy some mixology, barbecue. See ya. All right. And family time on the Pacific coast. So excited to have you on here, Jamie. How are you today? I'm
Career Beginnings and Entrepreneurial Focus
00:01:42
Speaker
doing good, Brittany. So good to see you. Thanks very much for having me on.
00:01:46
Speaker
Thank you so much. Well, so what I like to do on the alternative, Mason, is to really dig deep into your background, you know, how you got started and, you know, your journey into alternatives in the first place, you know, how did you get to this spot? What were some of your early conversations or actually, let's start with your earliest memory, or money, you can go back all the way to childhood, you know, how did you
00:02:14
Speaker
for your financial outlook onto the world, your earliest. So that's a great question. So I'll start by giving a shout out to my dad who was in community and commercial banking for 30 years. So that's the household I grew up in. We were in a banking family. My sister spent the first 10 years of her career in banking. So it's kind of in the family blood.
00:02:39
Speaker
and so my first job out of college you know I was kind of deciding what I wanted to do and you know tough to get a job when you don't have much on your resume and you know my dad helped me open a few doors thankfully and so I started my career with a small bank in Colorado out of college and that's kind of where my my career my lending career really started yes and that was in commercial banking you said
00:03:04
Speaker
Yeah, I mean, I kind of grew up in the world of kind of retail, small business, commercial banking. It's kind of a natural progression. I started working with individuals and families who needed an auto loan or a home equity loan or things like that. And then started working with small businesses. And it's something I really enjoyed, mostly because every entrepreneur is a little different. I mean, really, there's no two businesses that are the same.
00:03:31
Speaker
And I always just was fascinated by how someone either starts a business or grows one. And so I enjoyed being kind of a slice of how they became successful by providing different debt options. And just kind of over time, I got exposed to a lot of different industries and businesses, kind of all shapes and sizes. And that's been super rewarding to me over my career.
00:03:59
Speaker
Did you know that's what you always wanted to do? No. First of all, nobody goes to college to get a degree in banking. If that exists, I've never heard of it. Believe
Transition to Merriweather Group Capital
00:04:10
Speaker
it or not, I actually went to college originally to become an accountant. And the reason why is a good friend of my dad's was the CPA for Steve Miller of the Steve Miller band. And I thought that was pretty cool. We got free concert tickets and
00:04:27
Speaker
you know, t-shirts and stuff like that. And then I took a couple of accounting classes in college and I said, this is not for me. So I kind of, you know, was a business generalist, got a marketing degree and that's where I started my banking career. You know, in reality, I use accounting every single day. So, you know, it was kind of, I think I was destined to do it, but I've never heard of anyone who went to school with the goal of getting into banking, at least commercial banking that has never existed to my knowledge.
00:04:56
Speaker
Yeah. Well, what led you to start Merryweather? Yeah. So great question. So, you know, I spent 27 years in commercial banking, again, kind of starting in retail, small business, commercial banking, started to work with bigger clients and in a few different geographies and a broad range of industries too. So I really, I loved it.
00:05:21
Speaker
And, you know, I just saw kind of over the years, this population of businesses that I thought were very credit worthy, but they just kind of sat a little bit outside of a bank's credit policy or pricing policy. And, you know, banks, you know, I had a great career in banking, so I will never bad enough evade, but, you know, they're set up with their set kind of box. And if you fit within it, it's great. And if you don't, real tough to work with.
00:05:47
Speaker
And so I just saw, you know, my rule of thumb always before I ever presented an opportunity to my credit officer or credit committee was to ask myself, okay, if this was my money, would I lend it to this business? And if the answer is no, I probably shouldn't, you know, take it to my credit people. But if the answer is yes, then yeah, maybe I should, you know, consider that. And so that was kind of my feeling of when we started Merryweather Group Capital is, okay, in part, I'm putting my own money in this.
00:06:18
Speaker
and dollars of people that I know really well, we ought to be making really good credit decisions. But I believe that there's a universe of businesses that are just kind of outside a good fit for a bank, but that doesn't by any means make them a bad borrower. It just means someone needs to spend the right level of attention with these companies. They need to get paid for the risk too. And there's an element of creativity that just
00:06:44
Speaker
No surprise doesn't really fit in the banking world, but absolutely applies to lending that we can then leverage and provide exceptional service then for our borrowers as a result. During your time as, you know, your journey leading up to Merriweather, you know, as a banker and helping these small businesses and mid market, what do you feel you took away from all of that experience that you're applying now with Merriweather?
00:07:12
Speaker
Yeah, you know, so first and foremost, I have a high degree of empathy and humility for these businesses, because these, you know, we're working with companies that are mostly founder owned, closely held businesses, these aren't big publicly traded companies. So there's real, you know, there's real people, not that there's not in other companies, but there's real people behind these. And they've all been on a journey.
00:07:35
Speaker
that has had its ups and downs, almost every case. And so trying to put myself in the shoes of the entrepreneur who is trying to grow, needs access to capital, they have a good product, but they just need kind of a push.
00:07:48
Speaker
or sometimes we say putting a little gas on the fire to help them grow. This is what I observed through my baking career is this is kind of a consistent theme amongst entrepreneurs. And if we can address these issues in a creative way, then that's a win, both for them and clearly for ourselves too.
00:08:10
Speaker
And how do you build rapport with them or what do you, what is your strategy or your approach of building, you know, that relationship with your Yeah, you know, so we always try to put ourselves in kind of that circle of trusted advisors. So, you know, at the end of the day, we're one trick pony. We make loans. That's all we do. But, you know, I've also been pretty well networked in the banking community.
00:08:33
Speaker
And frankly, with others, you know, CPAs, attorneys, you know, etc. And so my feeling is, okay, if I can provide value to these businesses that is both kind of within the scope of what we do, but then also outside of it, you know, recommending, hey, here's a CFO, you might want to hire an attorney you might need.
00:08:51
Speaker
you know, then I'm really providing value. And that's, you know, one of the reasons I really love the market that we focus on is, you know, again, these are closely held businesses. These are individuals who need help, you know, to grow. And if we can come in there early enough and provide value, not just with debt, but also with kind of higher level guidance, you know, that's really fulfilling for me. And, you know, at the end of the day, we only get paid for making a loan.
00:09:19
Speaker
but it's the other stuff that really makes it rewarding and why I enjoy doing this. Yeah, yeah. So you're obviously very passionate about it. What do you find yourself? Well, you know, at the end of the day, you know, as I found out, well, what do I want to do with my career? You know, my golf game sucks. You know, the Powerball and Mega Millions people and I have never really worked out our differences there. So, you know, what am I going to do? And so I enjoy, you know, banking and lending.
00:09:48
Speaker
has been my background and it helps people and it's rewarding financially, so why wouldn't I keep doing that? Yeah, yeah. What do you find is the biggest struggle for entrepreneurs when it comes to when they're starting out?
Challenges for Entrepreneurs and Jamie's Role
00:10:05
Speaker
Yeah. What are their obstacles, possibly like their mental obstacles, perhaps? Yeah. Well, I mean, access to capital is a huge one.
00:10:16
Speaker
Yeah, because I definitely have seen many entrepreneurs over the years who are very passionate about their product or service and they know that inside out. But then there's also this thing called running a business.
00:10:30
Speaker
And sometimes that's totally independent. And I've seen very passionate entrepreneurs really not know how to scale up a business or really, you know, have good kind of fiscal good sense. And, you know, sometimes that's at the cost of a business not succeeding. And, you know, that's a huge challenge. And so, you know, to the extent business owners kind of surround themselves with talent, you know, both inside and outside the company, that's where I see businesses that are really thriving.
00:11:00
Speaker
Yeah. Yeah. So yeah, you're known, you're known to helping companies realize their full potential. You've been dubbed a change agent. So tell me more about that.
00:11:17
Speaker
You know, that's a great question. In full transparency, I'm not sure where that came from. But you know, I guess to the extent, you know, that we come into, you know, we're very opportunistic lenders. So first of all, we don't lend into businesses that are struggling. We lend to businesses that are having success, which we kind of define through net income or positive EBITDA results, and then really help them accelerate it. So when I think of like more change agent,
00:11:45
Speaker
you know to me that's kind of helping a business take it to the next level and going from just kind of on the precipice of being cashflow positive to really kind of blowing up the business and you know that might mean that they just want to continue to grow and definitely it could be growing with the intent of selling
00:12:03
Speaker
And if we can help them kind of pivot in that direction, you know, as you think about kind of the hockey stick growth of some of these small businesses, you know, that's kind of, I think what we're talking about with, you know, change agent. Yeah. And you help them the whole way through all the way to, if they do want to, they do want to sell, you help them the full way through. Yeah. So, you know, we, so first of all, we're just a debt provider. We just do loan, but.
00:12:30
Speaker
No, number one, we're underwriting the loan all the way through until maturity, meaning we collect financial reporting pretty much monthly with our borrowers. So we're staying really close to them, you know, not just until we book a loan, but all the way until we get repaid. And so we stay in conversation with our borrowers, you know, often monthly could be more, it could be a little less, something like that. And make sure that we're kind of
00:12:57
Speaker
you know, locking arms with them all the way through until maturity. Now, what I would show kind of beyond that is we have, you know, I think smartly partnered with a couple other general partners in our company, one of which is the Meriwether Group. Meriwether Group is primarily an investment bank. So while we do operate completely independently from them, they're a really important partner to ours because oftentimes a business may
00:13:23
Speaker
approach them and want to raise equity or sell a company or some combination of those things, they need to maybe bridge a timing gap while they're kind of preparing to do that. And that's where we can be a really good kind of interim bridge solution while they're going through that. And so that's kind of how we can help them, you know, both directly and indirectly through the whole kind of the entrepreneur's journey is, you know, we say a lot of, and that might mean, you know, a handoff from where they're a group capital to, you know, another entity.
00:13:52
Speaker
But we're super proud to be able to do that. And, you know, for the entrepreneur, it does provide kind of that one stop shop of helping scale up all the way through an exit. Yeah, yeah.
00:14:03
Speaker
So I love the name hero fund. Tell me more about the hero fund and the team behind it. Yeah. So, you know, that was probably a, you know, a late night brainstorming session with my other two partners, um, you know, at Maryweather group, which has been around for 20 years and they're really, I guess a really important partner of ours. They're all about the hero's journey.
00:14:25
Speaker
and kind of, you know, being empathetic, ensuring humility for entrepreneurs as they go from startup all the way through and exit. And, you know, it is a journey and we consider these people heroes.
The Hero Fund and Financial Education
00:14:38
Speaker
And so as we were creating, you know, our fund, we thought, okay, what better name to attach ourselves to than kind of the hero, because that's who we're, you know, that's the entrepreneur, that's who we're trying to help out. I love that. I love that. Love the name and love the meaning behind it.
00:14:54
Speaker
Now I'll be the first to also add, you know, one of the most, one of the smartest things I ever did was surround myself with people way more creative than me. So, you know, it's good to have some marketing folks around you and they've been super helpful, you know, with our, you know, a lot of our branding and name and, you know, who we go after and that kind of thing.
00:15:16
Speaker
That's fantastic. Yeah, I mean, what do they say? We're like our five people closest to us. So, you know, you gotta really rely on your team and surround yourself by people, you know, that you want to help elevate you. I am all about surround yourself with talent and let the people around you do what they do best and support the heck out of them along the way. And don't take those tasks that you know they're better at, that they can handle.
00:15:45
Speaker
So, well, I know that you enjoy mentoring so much and you're amazing at it, you know, and coaching these, these new entrepreneurs. What do you, is there a piece of advice that you feel you give often over and over again to these new entrepreneurs that are coming in? Yeah. I mean, it's exactly what we just talked about. It's surrounding yourself with the people that are going to really help you because I think entrepreneurs always have a strength or otherwise they wouldn't have gotten to me in the first place.
00:16:14
Speaker
But there's, I think, a limitation to that in many cases, or there's kind of a focus. Is it all about their product or service? Is it their clients? Or is it really kind of running and scaling your business, which is often totally different? And that's kind of where I try to, with empathy, kind of help them with, OK, you need to separate some of these thoughts and make sure you have the people around you, whether it's inside your organization or outside of it,
00:16:43
Speaker
that can really help you do that. Something that I just kind of think about sometimes is oftentimes businesses approach me that are much more bankable than they think they are. And a lot of times they don't know. They don't know how to read their own financials or maybe what's important about them. And I'll be the first to tell a business, hey, if you can get a less expensive option through your current bank or through another lender, you should do it.
00:17:13
Speaker
because we have no problem finding loans, so I'm not here to just kind of gouge people. But that's kind of what I'm thinking about too in terms of being able to be a good mentor is often helping them realize, hey, you're a pretty strong company. You might not think it, but here's my evidence of that and what you should, here's exactly what you might say to your bank or to another lender to help you make sure you're getting the best outcome possible.
00:17:41
Speaker
truly looking out for the best interest of your clients. Well, I mean, at the end of the day, these things come full circle. And, you know, as much as we want to be helping our borrowers at the same time, when they have a successful exit and the liquidity event, yeah, we want them to become an investor in our fund too. So, you know, these things, you know, help out each other over time. That's right. Full circle.
00:18:05
Speaker
So speaking of surrounding yourself with people that are gonna help elevate you, what were some of your mentors that have influenced you the most throughout your career? Or have you had anyone? Was there one that you think back and you're like, wow, that really helped elevate me and put me on the path to success to where you are now? Yeah, I've been blessed with
00:18:34
Speaker
uh, a great family and a great upbringing. And, you know, I feel very strongly about both my, my parents, but you know, because it's the banking angle, I kind of look at my dad and he is still doing great long retired, um, you know, for many years now, but he's really one I looked at in terms of how do you provide exceptional service to both, you know, to your clients, whether they're inside your organization or outside of it, you know, borrowers.
00:19:04
Speaker
And how do you show humility and empathy and grace with these groups that are struggling to succeed, you know, sometimes are just kind of on the precipice of success. And he really modeled the way for me in terms of, hey, what does it take to just be a good person? Because that's all we're doing, you know, at the end of the day, that's what we're doing.
00:19:28
Speaker
You know, he, I just kind of, he led the way without ever saying it overtly to me. I just kind of picked up on it over time, hopefully on a good day and, uh, can share that with our clients. That's awesome. I'm so glad that, you know, you had, you had that upbringing and you rely, you know, on your father and stuff. That's so special and important too. Um, are you doing anything? You have children, right?
00:19:56
Speaker
Yeah, we have one son, he's a seventh grader, and he sometimes asks me, you know, he's actually beyond the age now where he asks, like, well, what do you do, like, for a living? He's interested on his own. Which is great, you know, I don't know if he'll follow exactly my path or not, but, you know, he used to ask, well, when he was younger, like, well, what do you do all day? So, you know, my,
00:20:21
Speaker
a little bit flip answer, although there's a lot of truth to it is, well, you know, I turn dreams into reality. That's what I do. Yes. Yes. And, you know, well, I was just wondering, you know, how now in your household, you know, are you passing that down just like your father did as are, you know, what kind of conversations are you having? Because I feel like this is it's what plants the seed and, you know, how you're introduced to money and
00:20:50
Speaker
in our careers, I think influences all of our decision making as adults. Subconsciously, we don't even realize it, you know, so it puts us on that path. So I'm always just curious, you know, how those seeds are being planted and, you know, what kind of conversations that are going on with your children. Yeah, so yeah, I am a little geeky about that. I mean,
00:21:19
Speaker
My wife and I used to have a kind of quote finance date every month or so. Well, we kind of looked at a balance sheet together because I see a lot of households where there's maybe one person who kind of runs the finances and you know, if they get hit by a bus, you know, that's kind of a bad situation for a number of reasons. And I never wanted to have her not know what's going on. And so we share in that responsibility. And, you know, with our son, we try to kind of introduce things
00:21:46
Speaker
you know, at a pace that he will understand. I mean, I do think it's a shame really schools, at least when I was growing up, had no concept of, you know, financial prudence or, you know, finance basics or how to balance a checkbook, which really don't even need to do anymore. But, you know, some of these kind of common sense things. And so we try to implement that at home.
00:22:11
Speaker
Um, you know, he does have a bank account. He knows what's in it. He understands kind of how, when it gets transferred, he knows how to take a picture of a check with our phone and deposit it. So, you know, we're kind of doing these checks now, you know, like actual physical checks. Yeah. Not, not often, but you know, he knows how to do it, which I think is important and probably puts him ahead of most of his friends. Yeah. And, uh, so we kind of introduced these things slowly.
00:22:39
Speaker
overwhelming him, but you know, these are things he's probably not going to pick up in school. So it's, you know, good. I think it's our fiscal responsibility as parents to, you know, help them understand this stuff. It really is. I mean, I didn't learn any of that stuff till later on in life. And so my journey into finance has just been so drastically different. And my relationship to money has definitely had, it's been, it's been a journey, you know,
00:23:06
Speaker
Um, I feel I have a healthy relationship to money now, but it's been a journey because I can grow up in that kind of world at all and really only made them move over to finance in the last few years.
00:23:16
Speaker
came from more of a marketing background and so very very different and so I just I always want to know like the background and really to keep the best on here especially because we do have listeners that are in the industry of course but actually a lot of my listeners may not have a finance background and they're really just learning along with
00:23:39
Speaker
us. So yeah, I thank you. Yeah, I mean, I, I do think people there's just not enough kind of education around how to be a responsible adult managing money. I mean, if everyone was, you know, they're, I don't know, making relationships might be a little different, but you know, just doing our little part, you know, and help out. Exactly. So what kind of trends are you seeing in private product at the moment?
00:24:07
Speaker
Yeah,
The Rise of Private Credit
00:24:07
Speaker
well, I mean, private credit is certainly a hot topic in lending and within the world of kind of alternative investments, which that's just kind of one of many verticals within it, you know, based on kind of general banking conditions, where interest rates are, et cetera. I mean, private credit is having, you know, I see this kind of golden moment where it's, I think,
00:24:32
Speaker
you know, globally, it's a $1.5 trillion universe that is expected to double in the next five years. So, you know, there's certainly a lot of attention being paid around private credit. You know, we've just tried to kind of carve out our small niche within it. I mean, we're a tiny pebble in this big ocean, which is okay by me. And it seems like
00:24:55
Speaker
you know, banks have their focus, which they should, and it seems like there will continue to be a need really for kind of capital markets outside of it. The private credit is, that's their job.
00:25:13
Speaker
Is there, what should advisors consider before they move into utilizing private credit as an alternative? Sure. Well, I mean, I'm more biased because I'm on the other side of that question, but I think it's starting with understanding the fund manager, what is their strategy? What kind of makes them different than another kind of like fund?
00:25:37
Speaker
how are they underwriting their loans? How are they pricing loans? Just the composition of the assets, which in this case are generally a portfolio of loans. That would be starting point for me. Then understanding, where does that maybe fit into or complement the rest of my portfolio? Yeah. Why should they use credit in their portfolio? Why?
00:26:07
Speaker
First of all, I do think that as really an income earning asset, which really this is because we're all about preservation of capital and then a recurring income stream, which we do via a quarterly distribution, I think this is a yield strategy. And so if someone has a fixed income portfolio already that is filled with safe investments, which I would consider like treasuries or munis or bank CDs, things like that,
00:26:36
Speaker
You know, I say this a little jokingly, but given where those are priced relative to inflation, you're kind of losing money safely. That's how I see it. And so private credit or other kind of alternative investments can provide a little bit, you'll upside to that and maybe compliment the rest of that kind of portfolio, albeit with, you know, some degree of credit risk, which I think is moderate and from my opinion, but you got to make your own decision on that. And that's kind of where this often
00:27:05
Speaker
fits in. Plus, you know, think about where else can you get a portfolio, you know, have an investment in a portfolio of business loans. I mean, I'm not aware of a lot of instruments where that exists. And so it's a diversification tool. Plus, you know, I guess one more thing I would add to that, too. We have a number of investors in our funds that come from a very entrepreneurial background, too. And so
00:27:33
Speaker
you know, they, as we tell kind of our story, I think it resonates with them in terms of they reflect back on, you know, starting a business, struggling, trying to find debt to help it grow. You know, fortunately having a successful exit, you know, at some point along the way. And so in part, I think the value of supporting other entrepreneurs is what resonates with, you know, in the best part like this. Yeah.
00:28:02
Speaker
Yeah, and getting a good return while you're doing it. There's nothing wrong with that. Exactly. And so how do you foresee the traditional 60-40? It's changing. I mean, how do you foresee that changing with now alternatives being utilized more? Yeah. So I'm not an RIA. So I'm cautious about giving advice. People need to make their own decisions. But just for my interactions with the investment advisor, the work
00:28:32
Speaker
world, it seems like alternatives have a place in it. What percentage that is, is totally up to the, you know, the investor and their advisor to kind of work with them on. But it seems like there's a place for it. And I think there's a growing trend of accessibility to help, you know, kind of the smaller investor versus, you know, just large institutions have access to these kinds of things, which I think is a great way to go. And, you know, frankly, our partnership with
00:29:01
Speaker
bannering capital, name of technology, et cetera. These are things that kind of help break down the barriers to accessibility for investors so they have the same access to stuff that larger ones do. Yeah, we're really excited about it. We're really excited about the relationship and the launch of our technology and everything and how that's going to change the way advisors access alternatives.
00:29:28
Speaker
So could you share a success story or maybe a favorite experience that you've had where you've had success in private credit clients?
00:29:43
Speaker
I'll share a very recent one, although I don't want to steal their thunder, so I'll kind of maybe put a teaser out there and people can do their own research. So first of all, with our borrower's permission, we post press releases primarily on LinkedIn of pretty much all of our new loan partnerships. So they're OK with it, so we kind of publicize these things. And so the public can find them through my LinkedIn page or our company one.
00:30:14
Speaker
And we did alone.
00:30:16
Speaker
maybe a year and a half ago back with a golf footwear apparel company. They were just at that inflection point of success, needed working capital to help them grow. Their shoes are fantastic. I wear them. So I'm a brand ambassador, I guess. Although I don't really see my handicap improve as a result, but they're comfortable. So they do help me. And they were just kind of in this hockey stick growth mode.
00:30:46
Speaker
Fast forward, they paid us off in full just this past week. Concurrently, they just signed an endorsement deal with a major PGA professional. It literally just got launched and was announced on LinkedIn I think yesterday or today.
00:31:03
Speaker
So I'm going to just, I'll stop there because I think people with, you know, kind of wet your whistle, you can go find it on LinkedIn, see the story. We pushed it out through our LinkedIn page and, you know, to the
00:31:17
Speaker
You know, that makes you feel great because, you know, it was a good relationship with the borrower, with ourselves, with our investors, and it helped them really accelerate their growth. And they're on the precipice of great things. And again, I'm not going to steal their fund or you can find it, but yeah, those are the reason, that's the reason I do what I do. That is so exciting. That is so exciting. Congratulations to them. Thank you. Guys, it's so exciting.
00:31:48
Speaker
Oh, so what, let's see, sorry. I had it on the tip of my tongue. Yeah, well, I know you're involved with a lot of charity work. Could
Community Involvement and Non-Profit Engagement
00:32:03
Speaker
you tell me more about some of the charity work that you're involved with and how that's shaped your community engagement in leadership with the industry? Yeah, I mean, thank you very much for asking.
00:32:17
Speaker
Again, probably because of my upbringing, I think this was maybe through osmosis that I got this feeling in my head that I'm a big believer that anyone who spends time in the for-profit world needs to spend at least a little bit of time in the nonprofit world. I mean, mostly it's the right thing to do. That's why people should do it. And, you know, fundraising with a nonprofit, that's really hard work.
00:32:40
Speaker
And again, these are often nonprofits that are really passionate about supporting whatever their cause is, but having sufficient capital to do it really hard. And when there's economic downturns, it's even harder to do that. COVID was tough for the nonprofit world. So I'm a big believer that you should do that. I've spent time with a number of nonprofits over the years
00:33:06
Speaker
Currently I work with Boys and Girls Clubs of Portland. You know, I think doing stuff for kids, kind of kids and pets and basic needs, these are all really good, you know, themes that resonate with me. And so I'm super proud to work with them. I think most people know generally what Boys and Girls Clubs do. This agency does fantastic work, super proud to partner with them. And, you know, mostly it's the right thing to do. But the people I get to work with there are great and
00:33:35
Speaker
you know, I can help support them in a variety of different ways and think very highly of them. You know, kind of beyond that, I do, I think because of my background, get looped into a lot of like finance committees. So I'm on kind of finance committees and a few other organizations too, which I'm happy to do. And if I can, you know, offer some value or perspective, you know, I'm happy to do that. But, you know, let this be maybe a challenge for people who are listening or watching this, you know,
00:34:02
Speaker
find something you're passionate about and attach yourself to it. I mean these are these non-profits want your help and so it's not too hard to find one that probably could be a good fit. I completely agree. I think it's so important to give back and I love your philosophy with you're in the for-profit world. You should definitely be involved in some way in the non-profit world. The Boys and Girls Club is such a great organization as well.
00:34:27
Speaker
Yeah. Are there others that you enjoy being part of? Like, yeah, I mean, I've had, um, I've been on a board or committees of others. That's kind of the one for me, but you know, I think it's easy to spread yourself a little too thin and, you know, uh, so that that's the one for me. Yeah. And what, uh, what type of misconceptions do you feel there are with
00:34:53
Speaker
with private, you know, private credit exactly when it comes to them.
Misconceptions and Future of Private Credit
00:34:59
Speaker
So, you know, I think the biggest is we're a hard money lender. Okay. Which we're not. You know, I kind of view the difference being that a hard money lender, and I don't have any problem with hard money lenders, but I kind of view that term as helping a business that's struggling. Okay. And that's not what we do.
00:35:21
Speaker
Now, maybe there's other private credit that kind of does more distress that which that would be where I would really consider us to be a much more opportunistic lender. These are companies again that are already cash flow positive. They're trying to accelerate their growth and we're here to help them.
00:35:38
Speaker
Most of the lending we do kind of falls under one or two buckets. It's either permanent working capital to help spur kind of organic growth, or it's to do acquisitions. That's probably 95% of what we do is one of those two things. And that is not, you know, a hard money level, in my opinion. And that's kind of the difference.
00:35:57
Speaker
I was going to say, how are you evaluating who your clients will be and narrowing it down to who you decided? So that's a pretty thorough assessment. In part, it's looking at financials. We look at profit and loss statements, balance sheets, cash flow statements, et cetera. We look at trends. We do our own analysis.
00:36:18
Speaker
But then beyond that, we're meeting with the borrowers generally face-to-face, walking the machine shop floor or their business location, meeting with the management team, understanding who are their clients, who are their suppliers, what could go wrong, what's their defensible position, how did they get out of this? How do we get out of it? These are kind of all the questions we go through as we do our assessment.
00:36:45
Speaker
And with the world of alternatives evolving and changing, how do you see private credit evolving as well? Yeah, well, I mean, it's certainly growing. Yeah, I kind of in some ways, I don't like to use the word hate, but I kind of hate that we're lumped into alternative investments because private credit sits alongside a lot of other categories that have much different risk profiles.
00:37:12
Speaker
Okay. You know, I mean, it went into the spectrum. I mean, I don't know if that you would consider that the safest of all term investments, some might, but on the other end, you might have things like rare wines, I mean, or art, or, you know, collectibles, things like that. And, you know, that's totally a different strategy. It's a different target market. It's a different return profile. And so, but we get lumped in together, you know, maybe someday we won't.
00:37:40
Speaker
But, you know, for now, that's kind of where it is. And there's lots of other categories, too. I mean, like private equity, hedge funds, you know, crypto currency, you know, all sorts of different things. And so it's hard to compare private credit to any of those because it's a totally different strategy, risk profile, return profile.
00:38:02
Speaker
Well, as people, you know, as you know, we're introducing this new technology and our partnership that we have. I was just wondering how you feel, you know, things could evolve now that people may perhaps advisors will feel that they have perhaps an easy access. Yeah. So I mean, first of all, I'm super excited about regardless of kind of where you are in that risk spectrum, that accessibility to alternative investments is getting better.
00:38:29
Speaker
I mean, that's goal number one. And it's easier to access the barriers to entry have come down. And, you know, to the extent companies like BAMRI and provide, you know, hey, here's all these different categories we have in different options within them. I mean, I think it's a great thing to do. So I'm super supportive of that. You know, I think
00:38:52
Speaker
there's probably more entrants coming into alternative investments than going out of it. You know, when I think specifically about private credit, you know, this still feels like a growing category, albeit differently, depending on where you are in the kind of the size range. You know, it's a space we plan, which is really the lowest end
00:39:15
Speaker
of debt, we kind of do things under $5 million. Typically, there's just not a lot of players in that space, which, you know, we're obviously happy about because we have less competitors, but you know, the barriers to engineer high. And doing small things efficiently, you know, is probably most people realize it's tough to do. And so I get it why there's a lot of bigger players out there, meaning funds that are 10 plus billion dollars,
00:39:42
Speaker
But, you know, at the same time, I think it's important to support the other end of that spectrum too. How would you like, is there anything you would like to see change? I know you said that you don't want to be lumped in with all of the other types, they're alternately are so vast. But is there anything else you'd like to see, you know, change as far as how the industry in itself operates? You know that?
00:40:07
Speaker
Not really, I guess I don't get overly concerned about kind of the macro world around us. We just try to deliver a really good product and support our entrepreneurs, provide a good return for our investors, make it work for us as partners too. And maybe I'm kind of putting myself in a bubble a little bit when I do that, but that's my universe. And that's who I want to focus on. As much as maybe I'm a change agent within it, I feel like I need to be a change agent for the industry as a whole.
00:40:38
Speaker
but the bigger people do that. Well, what are some of your favorite, perhaps, podcasts or books or resources for people out there that want to learn more about private credits and how to utilize that in their
00:41:01
Speaker
Yeah, I mean, that's a great question. You know, I do stay kind of tied to the industry. But, you know, what I see a lot is that the most press gets paid to or the most attention gets paid to the biggest players.
00:41:19
Speaker
So in kind of the world that I swim in, there isn't a lot, and maybe that's kind of so that's frankly why I enjoy, you know, talking to you, doing other things like this, you know, frankly, I think a great resource frankly is your website, which you should plug because that gives, you know,
00:41:39
Speaker
an introduction to kind of the whole world of alternatives. And that's across the spectrum. I fit in one vertical at one end of the spectrum. And, you know, we're a one trick pony, you know, in that regard. So there aren't frankly, a lot of great resources, but you know, I also feel it's my kind of fiduciary responsibility, certainly with our investors, that I'm a one on one resource. So when people have questions, I don't point them to
00:42:10
Speaker
you know, a website or something, I'm having a conversation with them. And that's kind of, that's the industry resource I try to provide. Yes. We're very keen on, on, you know, education for alternatives and trying to help people specifically the advisors to really understand how they can utilize this and make advantage of that in their portfolio. So thanks. I mean, we're really excited about this partnership, so. Me too.
00:42:40
Speaker
What are you looking forward to most about the future? Well, I am super optimistic. I try to always be optimistic even when things don't look that way. I think in the world of private credit, I do see a lot of opportunity.
00:43:00
Speaker
You know, our fund has a lot of capacity to grow. We have really high loan demand, so there's no shortage of interest, essentially, quote, in our product. And so we'd like to say yes as many, as often as we can.
00:43:16
Speaker
We're continuing to build a good portfolio of borrowers that were helping out and providing a good return to our investors in exchange. I mean, that's what it's all about. And I am pretty optimistic about this year and beyond. And of course, things will come our way that we're not even thinking about right now. But I think there's always a need for debt. And we're pretty excited about what we provide that is a little bit unique and kind of in a boutique way.
00:43:45
Speaker
Um, and so, you know, I'm super excited about the rest of this year and beyond. We want to keep doing this, you know, indefinitely.
00:43:55
Speaker
Is there anything you would like to add for our listeners? Any other? I'm exhausted. We did it. We covered it all. All right. All right. Well, Jamie, I really appreciate you taking the time to do this. It's always a joy to talk to you. And I know I definitely learned something today. So I hope our listeners did too. I really appreciate everyone tuning in to listen to the Alternative Mason podcast. Thank you so much.
00:44:24
Speaker
Please be sure to give Bonner & Capital a follow on LinkedIn, Instagram, X, Twitter, whatever we're calling it these days, and also follow Jamie and Maryweather. So thank you again, everyone, and we will see you again next time on the next episode live from the green couch.
00:44:45
Speaker
The opinions expressed in this program are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you consult your financial advisor prior to investing.
00:45:05
Speaker
Any past performance discussed during this program is no guarantee to seek the results. Any indices referenced for comparison are unmanaged and cannot be invested into the record. As always, please remember, investment involves risk and possible loss of tackle. Please seek advice from a licensed professional.