Every month, we will feature an active member of the ACG New York community in a brief interview. Reflecting industry insight and personal perspective, this feature will introduce industry leaders and offer advice on the tools you need to succeed in the ever-changing middle market.
ROLE/FIRM: ACG NY Board Member and Chief Financial Officer and Chief Compliance Officer of Blue Wolf Capital Partnerss
1. Quick Basics - Role/Firm/Focus/How long have you been an ACG member?
I am the CFO & CCO of Blue Wolf Capital Partners. We are a private equity firm specializing in control investments in middle market companies in which we work collaboratively to build value for stakeholders and generate superior returns through effective management of complex relationships between business, customers, employees, unions, regulators and the communities where we do business. At Blue Wolf, I am responsible for fund and management company reporting to our limited partners as well as the SEC and other regulatory agencies. This includes traditional CFO functions of coordination of finance operations and the reporting of Blue Wolf’s portfolio companies through their CFOs, but also investment support, most notably around the tax structuring of potential platform, add-on, and co-investment opportunities.
I have been an ACG member since joining Blue Wolf in 2013.
2. What do you think are the biggest obstacles in the middle market today?
Today, with greater connectivity the pace of business does not tolerate inefficiencies for long. Companies in our end of the market need to be laser-focused on their competitive advantage, defending their position and maintaining a relentless focus on the continual improvement required to keep competitors at bay. For our smaller firms, it is equally important to identify those non-core disciplines that should be outsourced to partner firms that specialize in those functions, from the seemly mundane such as payroll services to certain parts of executing the strategic plan, such as wallet share analysis and targeting. Successful companies identify and cultivate vendor relationships as an additional stakeholder, just as valuable to the business as all the others.
3. How has ACG helped you in your career?
ACG has proved a wealth of opportunities to connect with other middle market CFOs facing many of the similar challenges as we are, and I count many of them as dear friends. More than that, it has allowed me to grow my professional network to all the other corners of the middle market investing ecosystem â€“ transactors, lawyers, accountants, executives, consultants, and everything in between. This growth has added not just the personal value of knowledge and friendship, but also rich opportunities for Blue Wolf to add value through a deeper pipeline and resource toolkit for our companies.
4. Can you tell us about your greatest success story/proudest achievement?
Being a part of the founding group of ACG’s Private Equity Regulatory Taskforce (PERT). Coming on the heels of Dodd-Frank and the financial crisis, demands on CFOs and CCOs, which in the middle market are usually the same person, have grown extraordinarily. This has demanded that we move from our natural orientation of being inward and backward looking to needing to be engaged and forward looking. With a membership of about 60 firms like Blue Wolf and a reach many times that number, it has provided a forum for sharing not just within our community but also effective engagement with regulators, legislators, and investor organizations.
5. What changes do you foresee happening in the middle market in the next 3-5 years?
As the investment market for small and medium businesses continues to mature, I believe there will be growing interest in middle market investing. Though the cycle has to end at some point, many components of our market are niche and less correlated with the general economy, adding to the interest of differentiated investing in the middle market. This is taking on new and creative ways of participating in middle market investing, all along the capital stack, through other balance sheet components like receivables, and growing opportunities through sponsor-to-sponsor, secondaries, and co-investment transactions.