On September 15, 2017, the asset management track had an intimate lunch followed by a colloquia session with Robert “Bob” Davis. Bob is the founder and Managing Partner of Nebrodi Partners, a Connecticut-based private equity firm. Prior to establishing Nebrodi Partners, Bob was a Managing Director in Aetna’s Private Equity Group and an early employee at a prestigious telecom company. He also worked in the fixed income division at Lehman Brothers and Merrill Lynch.
During lunch, the students shared their backgrounds and motivations. Bob listened intently and transitioned effortlessly from debt ratios to improving the educational system while sprinkling astute wisdom in between. His genuine interest in everyone’s stories left a lasting impression.
Authenticity was a common theme and Bob made it clear during the colloquia that this quality is crucial when investing in a portfolio company. He underscored the point by sharing a photo of himself and the Board of an electric fence company that he helped manage. The photo was snapped moments before they agreed to test the electric currents. The takeaway was that the ability to connect with management was just as important as the numbers. Bob believes building personal relationships is where he captures an information advantage over competitors.
The remainder of the session, Bob delved into what represents a good private equity deal for him. He used the portable restroom business as an example of a great investment; the industry was highly fragmented, and founders’ children were reluctant to inherit the family business. Bob took advantage of this and realized optimizing route density was the key to increasing EBITDA.
He also discussed pitfalls during various investment stages as well as strategies such as venture capital, leveraged buyouts (LBO), and mezzanine financing. He wrapped up with the state of the private equity market. He believes rising rates will drive returns lower. At the time of the presentation, uninvested LBO funds totaled $937 billion.
Bob’s lessons infused with humorous anecdotes are sure to stick with the students for years to come.