Why a middle market finance blog?

Brass Door Mural Prague

I have had the great pleasure of working with (and, sometimes, for) professionals dedicated to bringing rich, deep backgrounds to their fields. These areas include professionals in investment banking, commercial banking, corporate law, turnaround advisors, valuation experts, academics, strategy consultants, entrepreneurs, private equity general partners, mezzanine debt providers, and many other specialists.

It is my personal mission to make every effort to learn from all of them and to incorporate those lessons to my on-going work. Even after 20 years in and around the market, I am constantly intrigued by two things:

First: plus ça change, plus c’est la même chose. There are a number of fundamental principles, structures, and methods that have stood the test of time since I manually spread the financials of my first middle market client back in the mid 1980s. As a digression, I (now) fondly remember being involved in some of those early Carl Icahn and T. Boone Pickens deals back at MBank in Dallas as a neophyte credit analyst – heaven forbid you were not getting a cash flow model to balance at 3am and the meeting on one of those credits was the next AM.  But through it all, including the blessed power of computing, etc., much fundamental blocking and tackling has remained tried and true. I always delight (and will illustrate in latter posts) in the articles that industry groups will re-publish immediately after any market shock or cycle from some ancient finance pro from 1950, 1960 or 1970 that still provide compelling lessons to new and old in the field. With the help and input of our readers, I hope to illustrate many of these topics to help remind us – and potentially make clear to others – the importance of those bedrock fundamentals.

Second, and the other side of the same coin, is that the middle market world is alive and dynamic. A great example is the evolution of the field of Private Equity writ large and its impact on the middle market. Those professionals who failed to look past the one screening of “Barbarians at the Gate” (the movie, and not even investing in the book, no less) miss a sea change in opportunities now available to middle market companies and their owners for liquidity. As many have bemoaned before, one of the most frustrating – and often risk increasing versus risk mitigating – things one can hear is the uncritical “that’s the way we’ve always done it.” Inertia and sloppy thinking are the key culprits frequently illustrated as plaguing any number of middle market players. There is a rich field of study of the influence of heuristic, biases, etc. on judgment and decision making (see Kahneman and Tversky, et al).  The the goal of our effort in this blog is to illustrate the real changes in the market while throwing a bucket of cold water on what we see as fads, unsound arguments, and unsupported premises.

To paraphrase from a noted European academic studying the private equity field, we’re striving to improve the all too often low fact-to-opinion ratio. 

, ,

Comments are closed.