A Deep Dive into Investment Banking and Philanthropy with Michael Bennett

Introduction: A candid discussion about investment banking and philanthropy with Mike Bennett, Managing Partner of Crewe Capital.

In this interview, Alan Olsen, CPA, MBA and Mr. Bennett open a window into his Crewe Capital‘s early beginnings the connection between investment banking and philanthropy.

Transcript:

Alan Olsen 0:01

Welcome to American Dreams. My guest today is Mike Bennett. He’s a managing partner at Crewe Capital. Mike, welcome to today’s show.

Michael Bennett 0:09

Thanks, Alan. Thanks for having me on. I appreciate it.

Alan Olsen 0:13

Mike, just running through your early career, you have a phenomenal background and also in leadership too. But I want to delve into how your interest in investment banking and finance first emerge?

Michael Bennett 0:32

Yeah, that’s a good question. I mean, I grew up in Las Vegas. So the skyline was hotel rooms, there were no real corporations that I was familiar with no investment banks, downtown that I knew of, I didn’t know what investment bank was, you know, most of my friend’s parents worked in, in the gaming industry.

And so when I was studying in college, I was studying to be a dentist, I thought that that was a good career path that it was reliable, and that it would be something that would help me provide for a family. And I worked really, really hard and chemistries and biology and wasn’t quite getting the grades.

But it started the business to pay for college. And my clients ended up being investment banks. And it quickly realized that finance kind of makes the world go round and quickly took I mean, I was struggling to get B’s and C’s in chemistry and finance just kind of made sense to me.

The math and finance was really clear in my mind. And so I quickly realized after I’d done all my prerequisites for dental school that I should probably spend my career in, in finance or in business. And so I switched my major to marketing. And I, after I finished my undergrad, I took an investment banking job.

That’s kind of how I got into it a roundabout way. I didn’t know what it was, and I had no idea what you know, investment banking was or what they were until I was doing business with them.

Alan Olsen 2:14

So tell us the story behind crew capital. How did the Crewe Capital name come about?

Michael Bennett 2:21

I did a graduate degree at Oxford in the in the UK, and which was a very inspiring experience, because we had, I think, 40 kids kids from 44 countries, right. So it was fascinating, very eye opening, it really inspired me to start crew. And because that experience was so inspiring. I looked to that experience for inspiration.

And there was a there’s a city outside of London named Crewe. And its a bit of a railroad town. And they were instrumental during the different wars and setting up different parts of the UK. And they moved from railroad manufacturing, and they used grit and hard work.

And they created more industrial manufacturing for building Rolls Royces and Bentleys and other fine automobiles. And I loved the idea of being the grit and hard work behind what was a beautiful product and thought that that would be really good inspiration for us as it as a team.

Crewe kind of has an idea of teamwork, but also this idea of the hard work behind our clients and what they’re doing.

Alan Olsen 3:37

Obviously, there were a lot of people already competing in this space, but when you were getting Crewe established, what did you see as a gap in the market that your saw? How did you want to differentiate yourself in this?

Michael Bennett 3:53

I think what I learned is one, it’s very attractive to very smart, talented people, they want to be in this industry. But I found that the hole was more on Main Street.

Wall Street goes to the big IPOs, and the big transactions because there are big fees, but most of the economy is made up by smaller businesses- We define that as lower middle market. And it’s kind of most of what we do. Our businesses with enterprise values around $40 million up to $250 million.

These businesses are too big for a business broker to provide real value and they’re too small for Wall Street., however most of our economy is made up of them and they need good advice.

So our business is set up to give good advice whether they’re raising capital or they want to transact or they want the needed advice on their personal balance sheet or estate planning tax planning… our firm provides strategic advice for a business owner on his personal and professional balance sheet.

Alan Olsen 4:58

As your company has evolved over the years, what’s been your biggest milestone to date?

Michael Bennett 5:08

One of the biggest milestone was buying our own broker dealer and having our own formal investment bank, that was a big milestone, because there are ways to do it without doing that, it’s expensive and you’re dealing with the regulators directly. But that was a really big milestone.

We also set up Crewe Advisors, which is a separate business with separate professionals, but that was to provide really good service to our, our clients on their personal side of things.

I met with my partners this morning, and we set we had set up Crewe Foundation a couple of years ago and we’ve, we’ve given out to over $22 million in grants.

I didn’t realize the number was so big, but that was also a huge milestone of what this idea was and what it’s become and how many people were helping and the impact in the community and the people we do business with, and our colleagues, it’s just been really rewarding.

Alan Olsen 6:07

So you’ve completed over 100 investment banking transactions? Is there one in particular that stands out or that taught you something unexpected?

Michael Bennett 6:19

That’s a great question. I mean, they’re all so different, I think what I found is most business owners have an insane amount of grit. And normally, they either come with no privilege or a lot of privilege. There’s not a lot of in between.

And so you learn so much from the business owners and how they’ve gotten to where they are. One transaction that we’re currently working on we’re working on now, involes a $100 million enterprise company.

We’ve helped them with a series of transactions, help them buy all shareholders and helped them with some strategic advisory through debt placements and now they’re prepared to go public, and they’re about a $3 billion dollar enterprise business…

What I’ve seen them do in the last five or six years and grow from $100 million to almost $3 billion was their focus on people. They’re really a leadership company and they compete because they hire the best talent, and they have the best alignment of interest and they train their people.

I think that was something really inspiring to me to see how they’ve grown, not necessarily because their products better, it may be, but their talent is better and their investment in human capital is outstanding.

Alan Olsen 7:36

There’s there’s advisory services on this sell side or buy side? Is there any preference or who you want to represent?

Michael Bennett 7:45

You know, I would say 98% of our business on the investment banking side is sell side. We run a really tight competitive process. I think we know we’re the best at finding buyers of that size of business and so we get a lot of referrals. And that’s where we think we’re really good.

Alan Olsen 8:06

New trends are constantly emerging in the financial markets? How do you stay on top of everything going on in this world of change?

Michael Bennett 8:16

I do start the day, every morning by reading as much as I can, the Wall Street Journal, I listen to Bloomberg podcasts on all the economic updates and I follow all the key indices that are, interest rates and everything that I possibly can from just a macro level. But I also just talked to business owners.

We get calls all day long from buyers that are looking for good companies to invest in, so we listen to them, then we listen to our clients. And then it also is helpful having wealth management, they give us really good insight on Economic Trends, but it is hard, you have to have a team and you also have to really try.

If you don’t pay attention, you don’t try to learn, then you’ll miss out.

Alan Olsen 9:01

So you mentioned before about your foundation that Crewe has established and philanthropically there have been $22 million dollars given out. Are there specific organizations or themes that you target your philanthropic giving towards?

Michael Bennett 9:24

We have given to a lot of different organizations because organizations change. So I I’m always a little hesitant to really back one because the world changes people change. So we’ve given to a lot and a lot of things are very, very important to us.

One key theme is kids, people that can’t help themselves to something is something that’s really important to us, whether that’s their physical health or mental health.

One organization that we supported this year was called For Others, they’re big on foster kids and helping helping parents actually stick with their children if they can, and they’re helping people that want to adopt.

We opened a partnership with Charity Vision. We opened up an eye center in Peru in the Amazon, which is expected to do procedures that will restore vision for q 1000 people and 2024 and into perpetuity. It’s kind of a self sustaining, self sustaining eye center.

So that’s something I’m super proud of, and excited to see that we’re not only we’re impacting the communities that we work and live, but also that’s something that can be more sustainable and we don’t have to give money to every year.

Alan Olsen 10:47

One thing you’ve been able to do successfully is merge your passion with golf with philanthropy with the start of the Crewe Cup, so can you give us a little insight on what is the Crewe Cup?

Michael Bennett 11:06

If I didn’t learn how to mix my passion and pleasures with work and family, I wouldn’t get to play golf. And that is something I enjoy. I’ve got my family playing, we play together. And I play for work and but I started the Crewe Cup. This was our 13th year doing it. It’s a team match play golf tournament.

And we go to different places across the country. I took inspiration from my favorite tournaments. So the the jacket from the Masters, the trophy from The Open and the format of the Ryder Cup to create the crew cup. And we have phenomenal participants.

It’s mostly made up of celebrities and CEOs this year, Stephen Curry, and Ben Roethlisberger, Michael Peña , and Danny Ainge, and Dell Curry and Drew Brees were some of the people that participated. And then some CEO types, you know, CEO of Ashley furniture, or the owner of the Utah Jazz.

And it’s an intimate group of they come together to compete and build friendship and camaraderie, but also to do something that’s bigger than them and to help and to give back.

And so, for me, the combination of experiences, relationships, and philanthropy provide a phenomenal experience, something I look forward to every year that’s been able to do a lot of good.

Alan Olsen 12:28

Well, it’s a powerful group that share your hosting there. And I imagine you just use the same people from year to year coming back again, or is it a rotating or evolving if someone is CEO wanted to get involved with? Would there be an opening? Or how does that yeah, how does that work?

Michael Bennett 12:44

It’s a little of both, sometimes calendars coming in now we have guys like, you know, Ray Allen, who’s been there every year since he started coming. And then some guys aren’t able to come every year, we like to meet new people. And there’s always an opportunity to have new people join us, for sure.

Alan Olsen 13:00

And is there a website or something to reach out? Do they reach out to you directly?

Michael Bennett 13:05

Yeah, they want to reach out to me directly. My email is m@crewe.com, is the best way.

Alan Olsen 13:18

So moving to the advice in the future vision, what advice would you give a young professional aspiring to follow a path similar to yours in investment banking,

Michael Bennett 13:30

I think the sooner you know you want to be in it, the better. But you’re not going to know until you have some experience, do everything you can even if you work for free for somebody and shadow them to make sure that something that actually is what you want to do.

Once you have a chance to realize what it actually is, and then stick with it, I see people just quit too soon. You don’t really become very powerful in anything, most likely until your 30s in professional services.

So whether that’s legal accounting, tax, I mean, all banking, most people start getting really good at something after spending a lot of time at it. So my recommendation is you have to have a lot of drive, be really ambitious, stick with it, and do all you can to get experience.

I applied to grad school and they declined me three times. And then on the fourth time, I sent them a letter explaining who I was and what I was doing what I wanted to be and they finally got in. But if I had quit that second or even third time, I wouldn’t have the experiences that I had that inspire me to do what I’m doing.

So I would recommend that to stick with it.

Alan Olsen 14:44

What changes do you see in the future landscape of investment banking, especially in relation to middle market companies.

Michael Bennett 14:52

What I’m finding is that the middle market companies are going to always have a strong need, it’s going to did change, I think we’re even seeing the change with artificial intelligence, the preparation of investment memorandums or even due diligence files… that’s going to be automated, I think in a big way.

But it will need to be supervised by humans especially from a compliance standpoint, and there is a big human element of banking, negotiating, interacting. The competitive nature of deal making, I think, will always be intact by humans, we hope. But I do think artificial intelligence will have an impact on that.

But It seems to me that it’s only gotten better. I think the consumer is more educated on what it is and how to make it most impactful because forever, as long as I know, the big the big companies have always used investment bankers to help them with all their strategic capitalizations, but middle market, not as much.

And I think what we’re finding is they’re a little bit more educated now and how that can benefit them.

Alan Olsen 16:06

What accrue capitals future plans? Are there any sectors or areas you’re particularly excited about exploring for your next your next expansion into markets?

Michael Bennett 16:19

That’s a good question, we’ve done charity, investment banking, Wealth Management, and some experiential stuff with the Crewe Cup, I would like to do more direct investing, we do some of that to the family office.

But I think if we the four leg of the stool be interesting if there was a strategy that we could take advantage of because of our platform. That would probably be the next strategic initiatives. But we’re also try to keep a balance here, try to still be good people, good spouses, good parents.

Alan Olsen 16:58

Set balance of life as we go through it. Enjoy it. And yeah, sure. It’s, we’re keeping the wife and kids happy. So good. Right, Mike, it’s been a pleasure having you on the, on the show with us here on American Dreams today.

Once again, if a person wants to reach out for more information on crew capital, how would they go and do that?

Michael Bennett 17:18

Yeah, just email me directly. It’s m@crewe.com

Alan Olsen 17:26

All right. Well, thanks. Thanks for being with us today.

Michael Bennett 17:29

Thank you so much.

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