WSO Podcast | E153: Private Equity VP from JP Morgan Investment Banking

 

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In this episode, Harrison shares why he turned down a full ride to Stanford to play soccer at Indiana University, how he broke into investment banking at JP Morgan and why he transitioned to a smaller middle market firm in Cleveland. Learn how he quickly positioned himself for one of the few coveted private equity spots in Cleveland and how he's already been promoted early twice in his young career.

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WSO Podcast (Episode 153) Transcript:

Patrick (CEO of WSO): [00:00:06] Hello and welcome. I'm Patrick Curtis, your host and chief monkey, and this is the Wall Street Oasis podcast. Join me! As I talked to some of the community's most successful and inspirational members to gain valuable insight into

Different career paths and life in general. Let's get to it. In this episode, Harrison shares why he turned down a full ride to Stanford to play soccer at Indiana University. How he broke into investment banking at JPMorgan. And why he transitioned to a smaller middle market firm in Cleveland. Learn how he quickly positioned himself for one of the few coveted private equity spots in Cleveland. Now he's already been promoted early, twice in his young career. Enjoy. All right, Harrison, thanks so much for joining the Wall Street Voices podcast.

Harrison:  [00:00:57] Oh yeah, thanks for having me.

Patrick (CEO of WSO):  [00:00:58] It would be awesome if you could just give a quick summary bio for the listeners.

Harrison: [00:01:03] For sure. So, Harrison, I'm from Indiana, originally went to Indiana University and studied finance, accounting and international business there. Between my junior and senior year, I did an internship in investment banking with JP Morgan in Chicago. I started there full time as an investment banking analyst as well. And then

lateral to KeyBanc capital Markets in Cleveland for some personal reasons, which I'm sure we'll we'll talk about a little bit more later.So finish my my investment banking

analyst ship there. And then after after about another year, I joined Riverside as

 a as a private equity associate, and I've been there ever since. Coming up on five years. First couple of years as an associate, then senior associate and most recently vice president on our investing team.

Patrick (CEO of WSO):  [00:01:56] Congrats on all the promotions. It's not easy. So let's start all the way back. Just at Indiana, you know, was it I see you were a member of like the investment banking workshop. Was finance always on the radar or was it in family? Like, did you dream of becoming an investment banker since you were like eight years old? Or what was the what was the deal?

 

Harrison:  [00:02:14] Not at all. Not at all. For me. I actually went to Indiana, mostly for sports. I played soccer growing up and played soccer in college for Indiana and was like a lot of young kids wanted to be a professional athlete.

Patrick (CEO of WSO):  [00:02:30] You must have been pretty good if you were playing. That's D1, right?

Harrison:  [00:02:33] Yeah, yeah. We won a national championship my junior year.

So I use is pretty renowned soccer school, which is which is a lot of fun, which is part of the reason why why I went there and I'm from Indianapolis. So it wasn't it wasn't too far off the road, just far enough from home where my parents couldn't come see me every day. But but close enough where I could go home if I needed to.

Patrick (CEO of WSO):  [00:02:53] So before going to college, you were actually thinking, Hey man, I want to go pro, go MLS, whatever you thought.So what? What transpired as you kind of got into you, you know, they probably recruited you. Obviously, they recruited you at a high school because you're probably a star or whatever. But tell me about that whole process and the thought process of I'm going to go to Indiana because it's a it's a top program like where your parents on board with that or are they like, Hey, you know, maybe you could go to another school or like where they all on board?

Speaker4: [00:03:24] No, they were on board.

Harrison:  [00:03:25] Honestly, my recruiting process was was pretty drawn out. I candidly had offers from probably a lot better, or at least from a brand name perspective, top tier academic schools as well. So Stanford, Duke, Wake Forest schools like that that also had good soccer programs.But candidly, when I went to Indiana, it just it felt like home. The soccer program. He's won more national championships than anybody.So it was part of that.And honestly, I just it just felt like the right fit. So it was  a tough decision for sure, but one that I was very happy about.

Patrick (CEO of WSO):  [00:04:02] And did you in terms of like when Stanford gave you the offer, was there was there anything around like financial aid that made that decision like just the cost of Stanford versus Indiana? Or was it did they give you a.

Harrison:  [00:04:14] And no, I'm I was very fortunate.Pretty much had

full rides from a lot of the all the schools, so

Patrick (CEO of WSO):  [00:04:21] It was a full ride to Stanford.

Harrison:  [00:04:23] I know I look back every day, I'm like, Man, if I ever wanted to go to business school now, and I had to explain to the administrative department at Stanford that I could have gone there undergrad for free, they probably would kick me out of the process immediately. But I don't know. I look back on it sometimes, but it was a great time in Vienna. I am where I want to be in terms of.

Patrick (CEO of WSO): [00:04:43] You're totally fine. Yeah, I mean, you're totally fine. But it's interesting because that's you don't see that every day. You don't see that every day. And it's interesting that you had the confidence to well, I mean, at that point when you were making that decision, you were like, What a junior in high school?

Harrison: [00:04:57] Or you're about to be a senior. I would say late sophomore year, early junior year.

Patrick (CEO of WSO): [00:05:01] Yeah, I think you should talk about high school here, but this is such an interesting little twist. So were you thinking like at that point where you like, very confident that like, Hey, I want to go to the best soccer program, not like necessarily brand name and like that was the number one because you were going to go pro.It was it was like realistically, like, did you think like for sure, I'm going pro, I would have put it at

Harrison: [00:05:26] Like a seventy five percent chance and really during college, I had I could have played pro if I wanted to. But when i Looked at it, we'll probably talk a little bit about the transition. But when I looked at towards the end of my career going in playing soccer and being in a spot where you're making 60 to 70 K as a rookie for the first couple of years and then, you know, unless you really blow up, which it's really hard to do as somebody coming out of college versus especially in MLS. Now most of the players come from overseas.

Patrick (CEO of WSO): [00:05:58] Even why? Why is it hard to blow up an MLS just because you're  young, you're still not your game, not completely refined yet. There are what

Harrison: [00:06:07] I would actually say the opposite. So typically the first the first couple of years of the contracts are you're on your rookie minimum. And then typically, unless you end up becoming like one of the really top guys, what they'll do is they'll just instead of then paying you a lot more for your second contract, they'll just bring somebody else out of college that is pretty close to as good as you and pay them a third, a third as much. So it's a little bit it's mostly financially driven from the clubs.

Patrick (CEO of WSO): [00:06:35] Of course. Yeah, because It's not a huge it's not like an MBA or NFL type revenue stream. So they're really conscious about what they're spending on the players. So like you're saying that second contract, getting that second contract is incredibly difficult coming from the U.S.. Yeah, totally interesting dynamic.

Harrison: [00:06:55] I didn't know that realistically, as I thought through it, I was like, Well, I have this great job offer to go work for JPMorgan. And realistically, if I see myself in five, six, seven years, whatever it is, however long my soccer career is, I'm going to have to probably go back to business school and probably be fighting for the same job that I have in my hand right now. So while I give up the really cool experience of playing, I get a head start at five or five or six years on my professional career.

Patrick (CEO of WSO): [00:07:22] So it seems like that was a very mature decision. That's a phrase that wasn't there, I guess if four years does a lot, right? Yeah, because like I guess. Same thing, like, you know, when you're a junior, you think I can, I can do it. I mean, that's what percentage of people who are in the U.S. got the college guys out of the U.S. that join MLS, that group what percentage? Get a get a contract, a second contract, do you think like and what is it, A three year? It's a three year rookie year?

Harrison: [00:07:48] Yeah, I think it's like maybe it's like a two year with a third year

Patrick (CEO of WSO): [00:07:51] About diving so much into this, but it's fascinating.

Harrison: [00:07:52] It's fun. It's fun, fun talking. Yeah, I mean, let's say there's probably 50 50 kids a year that come out of college that that go pro. Maybe I don't know, maybe 10 to 15 of them, like stick around for more than three or three or so years. Mm, not a lot. Yeah. So you looked at that and you said. What position did you play? Cinnamon. A lot of good competition. Yeah. It must have been pretty good anyways, so yeah, I was nowhere, nowhere near that. I couldn't even break onto a div three varsity squad. So although Williams College, where at D3 National Champs many times over two games is good, yeah. So um. Ok, so let's talk a little bit as you kind of as your freshman sophomore year, you're playing, you're having a great time. It's a blast. You are you like right away or are you smarter? Yeah, yeah, I started, I think I'll but a couple of games that I knew and then finance

Patrick (CEO of WSO): [00:08:57] And accounting and all this stuff, you take out a double major finance. It's an accounting. Or is it one?Yes.

Patrick (CEO of WSO): [00:09:03] To two? And so when did you kind of think, OK, this finance thing might be might be for me or your parents in finance?

Harrison: [00:09:09] No, not at all. My mom's an anesthesiologist. My dad was in medical sales for a long time. So medicine, health care? Yeah. And you know, that was part of probably part of the reason why I chose to go into business because I saw how my mom being on call all the time, that sort of thing. I wanted to do something a little bit different.

Patrick (CEO of WSO): [00:09:26] Same with me. My dad is a cardiologist growing up. So by the second, tell me. Yeah, he was working like 18 hour days. So I'm like, I don't do that. I'm going to do investment banking where it's the same exact hour now. Yeah. So OK. So tell me a little bit about just as a finance kind of interested you. You took some classes. Obviously, you're like, OK, this is this is right for me. And then tell me when you started hearing about investment banking, I know Indiana has a they have the workshop. They must be making workshop. But was it like a group of kids? Was it was it like, really well known? And I assume your GPA was decent enough where you were getting looks to land at JP? Let's talk about like how you even got that internship?

Harrison: [00:10:03] Yeah, for sure. So, yeah, you're right. The investment banking program that I use is I would I mean, I don't know for sure, but I would guess it outside of the Ivy leagues and maybe the Notre Dame's of the world. I would guess IU probably has the most folks going into investment banking each year, and that's predominantly because of the work that this workshop does. So, you know, it's basically starting a sophomores. And but when I was there, it was a junior, but they've accelerated a little bit. So they have to yeah, It's recruiting purposes for sure. Yeah. So they've basically built this great program where you do a lot of training early on, you know, and tells you how to basically get you to break in. But I think the biggest thing that the program has done is, you know, Professor Habel, who's the guy who started it? It was kind of a visionary and one of the big focuses is on giving back and making sure that, you know, once you break into the industry, that you're giving the time of day to the kids that are in college to help them break in. And so it's created this huge network effect of people that are in banking now and senior roles and now then have gone on to private equity and in senior roles and whatever it is so that that network, I think, has become extremely powerful about you. and so, You know, we are pretty fortunate to where most, most schools outside of the Ivy Leagues and Notre Dame's, Et cetera, they don't have the banks coming on campus to do a lot of recruiting. But we are fortunate enough to where pretty much every bank, whether it be a bulge bracket or Mid-market investment bank, was doing on campus interviews. So it was really just a process of networking, knowing what city you wanted to be. And was it New York or Chicago? What type of bank was it? Bulge bracket versus mid-market, et cetera? And then from there you just try to get on the interview list. I would say anywhere from five to seven, maybe even 10 people per bank from our from our workshop got interviewed. And, you know, just spending on the bank anywhere from, you know, zero up to five to seven people would be, you know, get internships at those banks.

Patrick (CEO of WSO): [00:12:06] It's amazing. So is it was it really tough to get into that workshop? Is it still tough? Do you know what's going on with it?

Harrison: [00:12:11] Yeah, it is pretty selective, for sure.

Patrick (CEO of WSO): [00:12:14] And I think, how do you get in? How do you write an essay or something? Say how you want to be an investment banker or what do you do?

Harrison: [00:12:18] Yeah, I think it's part of that is a big piece of it as well. Your coursework and candidly, there's a lot of other like just like getting breaking into real investment banking, there's a lot of networking that goes on. So you're talking with trying to meet with the people that are already in the workshop that are a couple of years older than you. Inevitably, there's a lot of, you know,There's a couple like fraternities on campus now where like, there's people that want to get into the investment banking workshop, getting to go to a certain fraternity because there's a lot of people that have gotten into it. So the Greek life, a little bit comes into play.

Patrick (CEO of WSO): [00:12:51] Did you end up at that frat?

Harrison: [00:12:53] No, we weren't allowed to join frat for probably fortunately.

Patrick (CEO of WSO):  [00:12:57] But I think what as a soccer player? Yeah, yeah.

Harrison: [00:13:02] So so I but honestly, I think soccer helped differentiate me a little bit there. I think the athletic background, you know, You've probably talked to other athletes that have been in banking and private equity, but it's a pretty similar vibe

and teamwork, like teamwork, hard work, like like there's a lot of similar characteristics that translate very well into the industry. So I think that that helped me get into the workshop as well.

Patrick (CEO of WSO):  [00:13:27] All right, cool. So you get in, you're excited to start like just grilling you on like technicals, trying to get you up to speed and like at that point when you were going through it and this is a while ago now where you was recruiting, I guess, junior year like early, early junior or late sophomore year for internships.

Harrison: [00:13:45] I think the interview on campus interviews. Were like just at the beginning of second semester junior year when I was going through, and I know that's been accelerated a lot.

Patrick (CEO of WSO):  [00:13:57] So was it was it like you drop your resume to the 15

places, all middle market and bulge bracket banks? And so do you remember like around what the. The fall off of the numbers or the conversion numbers were to actual first round interview?

Harrison: [00:14:10] That's a good question. I don't remember.

Patrick (CEO of WSO): [00:14:14] Was it 20?

Harrison: [00:14:15] Yeah, I would probably say that I probably dropped like I probably networked and put resumes out there for roughly 10, 10 places, I would say. And I probably got had, I don't know, seven interviews, something like that. Pretty good,

Patrick (CEO of WSO): [00:14:31] Pretty good conversion. And then from those, obviously, JP Morgan was one was that other bulge bracket, the other middle markets? And then how did you how many offers did you end up with for four internships or did you just take? The first one and drop the process of what was the

Harrison: [00:14:46] Good question, so I think, you know, I did all seven interviews. I think I ended up with probably four or five offers, definitely for. And you know, I would say I did a little bit of interviewing in New York, but mostly was in Chicago. So I focused more on Chicago than I did on bulge bracket versus mid market, et cetera, and ultimately chose Jp partially because of the brand name, partially because of the connection I made with a couple of the folks there. That sort of thing

Patrick (CEO of WSO): [00:15:16] Got it makes sense. Ok, so you had a lot of offers, do you feel like? Why do you feel like you had so many offers? I mean, they probably asked you about soccer as well, and they could set, but you feel like that helped you. But what else was your GPA like? A three six three seven three eight? What?

Harrison: [00:15:32] Probably like three seven three seven. Ok, so you're doing one pretty average, honestly.

Patrick (CEO of WSO): [00:15:36] Yeah, you're doing well at this. Yeah, at school, though. Was it just the workshop prepped you well or there was just. It was the strong networking that you were doing, like tell me about that networking, you said I did networking because it's just like coffee chats and stuff like that. What were you doing going over above and beyond?

Harrison: [00:15:52] Now I'd say coffee chat was a big thing. You know, the workshop every year would do at least one trip to Chicago, one trip to New York, where you would visit over the course of three days, probably 15 banks each, like it was pretty, pretty intensive. So you got a chance to see a little bit of everything. I think luckily, maybe luckily. But one of the one of the guys that had that was from IU, probably three or four years ahead of me, that was still at JP as an analyst had played football at IU. So we had that that connection, which really helped me honestly. And I would say, I mean, it's the advice that I give to pretty much all the, you know, up and coming finance professionals that want to that are interviewing or whatever it is, is, you know, being, I think being personable, being like, you know, being able to talk and have a normal conversation. Like the more it feels like a true interview, the probably the worst that's going, the worse it's going. So I always just tried to focus on just having a natural conversation, and that seemed to do pretty well.

Patrick (CEO of WSO): [00:16:53] Do you feel like that was learned or that was just something you grew up with?

Speaker4: [00:16:58] Probably a little bit of both. Maybe I probably am fortunate enough to have a little bit more on the it comes a little bit naturally to me. So but I definitely focused on it for sure.

Patrick (CEO of WSO): [00:17:08] Yeah, I always wonder about that because I feel like, you know, sometimes kids start really shy and then they become really like outspoken or they kind of grow into themselves and the other kids are like, can go the other way and go too far or whatnot. Or they're just too, they just sound like bumbling Idiots. And so it's interesting that you're able to thread the needle. So you're so you're kind of you get the offer of your super excited. You get you get to Chicago for the summer. And it is it's kind of what you expected since the workshop had prepped you. Here's what to expect there. Was it different? Tell me a little bit about kind of that summer. And were you nervous about getting areturn? All that good stuff.

Harrison: [00:17:42] Yeah. The summer was it was really good. We worked a ton, it was it was pretty much what I expected, worked long hours and learned a lot. I would say in general at JP, I did a little bit more on like the capital market side than on the M&A side. And I think that's more typical at bulge brackets just because there's less big deals going on. And so that that was probably the one. Maybe surprise was the was the thought in my mind that I was hoping to do probably a little bit more M&A than I did over the summer. But it was still a great experience and I think we had in the Chicago office. We've we focus mostly on it was industrials and building products for the two groups and in the Chicago office for J.P.. So those were the kind of the areas that I focused on. And I think out of the four of us in my class, we all got return offers and went back

Patrick (CEO of WSO):  [00:18:38] With a four inch or four from

Harrison: [00:18:41] You. You're saying no for four interns because there's only those two groups.

Patrick (CEO of WSO):  [00:18:45] There's it's only four interns, OK? All four, you guys got the return. Awesome, congrats. And so you were psyched you're going into now senior year with the job lined up and it was just a no brainer. You're like, I'm just going to I'm going to take this. This is

Harrison: [00:18:58] Great. I thought it was. I mean, I accept it for sure, and I kind of made the note to them that, you know, unless all of a sudden I have some crazy, awesome senior year and I go top ten in the draft or something, then I'll be back and I did the combine, which would have basically ensured getting drafted somewhere, but I knew it wasn't going to be a top five pick or anything like that.

Patrick (CEO of WSO): [00:19:24] So what was how would you have had such a crazy senior year like? It just seems to me like it's not really. It's so hard, especially the centre mid. What do you do? Like, you know, they had like 50 assists or something crazy. Like, Whoa, you know, you folks, you like 10 goals and like, what do you have to do to exactly

Harrison: [00:19:40] Which that that that that didn't seem like it was in the cards and ultimately wasn't?

Patrick (CEO of WSO):  [00:19:45] So that's basically what has to happen. You just have to like a blow out year where the MLS teams are like, Oh, we want that guy, OK, fair enough. So you're you get invited to the combine. You decide, you decide, OK, I'm going to get drafted, but you know where I'm going to be drafted at 30, at 50, whatever it's not, it's not necessarily worth it. And is it scaled like the NBA, where it's like the first and second pick? Get higher salaries and like the yeah, for sure. Ok, do you know what it is for the first pick? Like one hundred and fifty years?

Harrison: [00:20:17] I thing back when I was coming out, like I would say that the top, the top, top folks were probably anywhere from one fifty to two hundred.

Patrick (CEO of WSO): [00:20:28] Not that much. Yeah, yeah. Yeah. Ok, so you're still going to make more than Ivy. So you're basically coming out. You're you join the same group in Chicago, you graduate. And then that first couple of months, you're doing the training. You're kind of going through all that. Is there any like, Oh man, now I'm like getting out of shape, like, how are you staying in shape from going from being like basically a professional soccer player to now sitting at your desk all day?

Harrison: [00:20:53] Yeah, it was. Well, actually, the summer in New York for training was awesome. We were working like, you know, maybe eight a.m. to like three to four p.m. You're getting paid. We're in New York for the summer. And one of the great things for the people not in the New York office for JP was they put you up in corporate housing, so you don't have to pay rent, you get a furnished apartment. So we were living large for like the 10 weeks or whatever it was getting to work out all the time going to Central Park. So that was awesome. That's awesome.

Patrick (CEO of WSO): [00:21:26] Yeah, that must've been a blast. And then you then you get to fly back to Chicago and you get and you get put on the desk and reality hits of What it's like to tell me what the hours and the and then just that that first bonus and range of pay, if you're able to share it, it Doesn't have to be exact. But just so people get a flavor of, you know, Chicago, lower cost of living city probably getting paid pretty well.

Harrison: [00:21:45] Yeah, for sure. I think back when we when I came out, I want to say those starting salaries were either like seventy five or eighty. But I don't think there was a cost of living adjustment between New York and Chicago, which was kind of nice. And then I think that first year bonuses were roughly for top tier was roughly one hundred percent of salary, maybe slightly below that, but pretty close.

Patrick (CEO of WSO):  [00:22:09] That's amazing for sure. Out. Yeah, I think like you were just you're you were starting at like a good. It's like you weren't in the depths of the great financial crisis. We had started to ramp a little bit more. Deal flow was going up. So tell me about like, so where you like ranked near the top of your class by the end of that first year? Yeah, at the top. o, and then is that did they rank you against like the New York people are just against the Chicago people? It was, it was

Harrison: [00:22:33] Basically it was by group. So I was in the industrials group, which, you know, probably I don't know, 80 percent of the people were in New York and there was only a couple of us in Chicago. So, you know,

And I think I think the way that they JP did it, at least back then was they just had basically three buckets, basically top, middle or bottom. And that's everybody in those tiers. Got the same payout, I think.

Patrick (CEO of WSO): [00:22:57] Got it. And then in terms of like, do you know what percentage of people like ended up in the bottom tier versus that is like bottom 10 percent and then top 10 10. And like most people, get the middle. I honestly don't know. Yeah, I'm just curious. So, OK, so you're  doing well, you're kind of, you know, I assume working, what, 80 plus hours a week? Yeah. On that. Yeah, for sure. What's going through your mind that for six months, you kind of get up to speed? Did you feel like you were ready because of the workshop and like you had the financial modeling skills? All that, all that good jazz?

Harrison: [00:23:26] Yeah, I think so. Honestly, it was a lot of what we expected and It was probably i mean, the hours everybody hears about it was honestly at least that when I was at JP was probably worse than I was even expecting. But you kind of fight through it and you get slight glimmers of hope here and there. And right when I was going into was when a lot of the banks, I think. Goldman was maybe the first to do it, and it was while I was during my first Year when they did like protected SATs as an example, one of my roommates in Chicago worked at Goldman and so he had protected SATs. Jp I think maybe, maybe a couple of years after I left, started to institute some of those same things.

Patrick (CEO of WSO):   [00:24:04] So damn it. Exactly. You didn't get the benefit. Yeah, things did start. You're right. I remember now, like things did start kind of changing around. Then there was a few unfortunate incidents, right? And Bank of America started doing stuff, and there's some interns that suffered And Few that even passed away from

some of it. So tell me a little bit about the decision to move because you're kind of in your second year. Were you thinking private equity at that point? Did you recruit at all? Did you talk to Headhunters? And then the move from Chicago to Cleveland and going from a bulge bracket to middle market bank? Tell me about your thought process. You said it was a personal thing, Which is fine if you don't want whatever you can change. Yeah, I'm happy to share.

Harrison: [00:24:45] So at school, I met my girlfriend at the time and she actually played soccer at IU as well. But she's from Cleveland, and when she graduated, she came back up to Cleveland to be to go to dental school at Case Western. And so we were starting to look and see, look, she's going to be there for at least four years. I like Chicago, but I didn't have any necessarily desire to be there for the rest of my life. And so that was kind of a personal thing of making it work. Honestly, we probably would have continued to fight through and do the long distance thing for another year until I got done with my two year analyst chip at JP. But going back to what I was talking about a little bit earlier. Most of the work that I did in my first year, especially working for big most of my clients that I worked on were big auto OEMs, and there's like no M&A in that world. And so I was doing pretty much all DCM. Yeah, all equity and debt capital markets working for some of the big auto OEMs and that stuff, I mean, while it's good experience, it wasn't what I wanted to do. I was starting to get the kind of I started to formalize and finalize my opinion that I wanted to get into private equity. And so going, not having much M&A experience was not going to help me getting into that realm and so, so on. Long story short, if I would have been getting the exact experience I wanted at JP, I probably would have stayed there and finished my second year. But because of that, I was willing because I wasn't. I was willing to make a change and go to a middle market bank where I knew it was more M&A heavy.

Patrick (CEO of WSO):   [00:26:24] Were they able to kind of make you whole or close to hole from losing your bone? You're like going working three quarters of the year and leaving your bonus? Yeah, it's like

Harrison: [00:26:33] Definitely a little bit. Yeah, I mean, he was he was definitely, I would say, happy to get somebody that had come from a bulge bracket and that sort of thing. So it was it all worked out.

Patrick (CEO of WSO):   [00:26:43] Cool. Ok, so you didn't get completely hosed there. Ok, so you're in Cleveland now. You're the long distance is no longer, although that can kind of be a tough transition. Did you guys, you guys probably like live together in college anyways, or practically so like going from long distance for almost two years and then back together, that's probably nice to finally not be so far apart. So she's in school. You're now in a middle market with the lifestyle better, at least I would

say, are still. Now you're doing a bit of a

Harrison: [00:27:14] I would say like half the time it was better and half the time it was very similar. It just kind of depend. Yeah, it wasn't. It felt like a JP. It was pretty much every day was past midnight, for the most part. And that key, it was like, if you're working on stuff, it's still that same way, which is to be expected. But there were plenty of weeks where it was, you know, you're leaving the office at eight or nine, which is, you know, feels pretty good during those first couple of years.

Patrick (CEO of WSO):   [00:27:42] Yeah. And then you were there for almost again, almost two years. Tell me about your thought process because you know, you knew P was kind of what you wanted to do. Cleveland's not necessarily like a P hub. There's a couple of great private equity funds. So like, how did you even go about you knew you wanted to stay there, right?

Harrison: [00:27:58] Yeah. And so this is actually probably when I think back on how I've gotten to where I've gotten, this is probably one of the more interesting dynamics because when I was leaving, JP was right when bulge bracket recruiting for the Carlyle is Kkr like all the bulge bracket was starting and they interview. I mean, back then it was already a year and a half in advance type of thing. And so I came from the world of, Oh man, maybe, maybe I need to start reaching out to PE firms right now to start trying to get lined up for a year and a half from now. And so when I got to Cleveland, I kind of just started doing some of that networking and I learned that the world of middle market PE recruiting is not nearly that, that rigid and not definitely not that far ahead. You know, at the most, I would say it's like a year ahead. And so but I was kind of fortunate that. Right when I got to Cleveland, I had I started doing that reach out because like, I don't want to miss the boat if I if It's the same way. But I had made contacts during that initial outreach that that lasted and ultimately set me up pretty good for once those once the funds in Cleveland were ready to start doing the recruiting.

Patrick (CEO of WSO): [00:29:08] So basically, you're saying you did the networking because you thought you were going to miss the boat ended up. The boat was leaving a year later, but it was still good to have that those contacts and it ended up paying dividends for you. When the recruiting did kick off, so did you. How did you even approach that because you had just started at Cleveland? Was it was it like, were you nervous about it? Did you talk to a headhunter? Did you just like using LinkedIn? How did you how did you find, like, who to even speak with? Who did you target associates?

Harrison: [00:29:37] That's a good question, I think. No, I think I reached out to a couple of associates at each of the, you know, the pretty good funds in Cleveland and just said, hey, you know, we'd like to learn a little bit more about your recruiting process. And luckily, it's a because the recruiting process is a little bit more bespoke, I would say, for middle market private equity firms. The folks are open to talk about it, and it's not like they're getting inundated with one hundred and fifty kids from all the bulge brackets wanting to talk to them. So it's not as onerous on the current associates. And they were willing to put me in touch with the whether it be typically at some of those funds, it's either the fund manager that that leads a lot of the recruiting or it's maybe a principal or one specific person is kind of known as the gatekeeper. And so I was able to have a couple of those conversations with the right folks

Patrick (CEO of WSO): [00:30:30] Just based on how did you make a good impression? You talked about how you were getting that M&A experience or that's why you're there and what did you say?

Speaker4: [00:30:36] I honestly don't know that that time was a was a blur.

Patrick (CEO of WSO): [00:30:40] You remember, like what kinds of questions you ask them? Sound intelligent.

Harrison: [00:30:45] I asked him a lot about investing. I think being able to talk about why you want to make the switch from banking into private equity is important. And whether I knew it or not at the time, I think I said the right answer is whether I knew exactly what I was saying or not. But I think it really is along the lines of being more a little bit elite in this, in my opinion, because staying in banking is for sure a great path for a lot of people. But in my opinion, there's a little bit more, I guess, intellectual curiosity that goes on in the on the private equity side versus and especially as you move up versus in banking, you start becoming, you know, as A VP in banking, you're starting to be a real almost like a salesperson in a lot of ways versus in private equity. You're  being more of

Harrison: [00:31:35] Like a decision maker and you're thinking through a lot of stuff. So there's pros and cons to both. And some people, personalities fit better for one or the other. And I just kind of got the feeling that my the right path for me was to try and make the jump into or into private equity.

Patrick (CEO of WSO): [00:31:49] That's fair. So I mean, you kind of started giving them the right answers. Was there like an LBO modeling test they put you through eventually, once they once they kicked off, what was that like? Tell me about the recruiting process? And did you did you recruit it other funds and have to deal with like exploding offers and all that jazz

Harrison: [00:32:04] Or no? Fortunately, I did not have to deal with like multiple bunch of processes going on at the same time again because I think in Cleveland Riverside, the fund that I'm at probably recruits a little like probably the earliest out of all of them. And it's nice, a little bit more institutionalized. So just because we're a bigger fund. But so there was definitely a first round phone screen type stuff. There was a I think after that there's like a behavioral and IQ type test that they put you through. That's maybe a couple hours. And then once you get that, that's kind of the first two stages and then the third stage,

Patrick (CEO of WSO): [00:32:41] Do they tell you your IQ after you do it?I don't think they did now. That would be interesting.

Harrison: [00:32:47] It was an interesting test. It was like there was one test that was almost like a GMAT style, and there was one that was like a true like personality test in this situation. What would you do about it? And then the next step was a case study which included a model and then a memo of basically your recommendation on should we pursue this company? If so, what? What's the right valuation? What are your key diligence items that you would want to talk about? What do you like, what you don't like, that sort of thing? So and I want to say, maybe we had they sent it to us and we had probably anywhere from

Harrison: [00:33:24] Four, four to four days to a week. I don't remember exactly.

Patrick (CEO of WSO): [00:33:27] That's brutal. When it's that long.

Harrison: [00:33:29] Yeah, yeah, exactly.

Patrick (CEO of WSO): [00:33:30] Because you almost want it to be twenty four hours, because then it's like, you know, you can't do as much as at the four to seven days as a brutal case study.

Harrison: [00:33:39] But it was I mean, it was it was really a good experience doing the case study. Like I said, it was it was my first one because I it was the first interviews that

I was doing in Cleveland. So and luckily, it kind of worked out and they brought us in. I candidly looking back on it now only Because I've gone through the process of hiring folks for the last five years now. We usually bring in anywhere from seven to 10 people and depending on the year, there's one or two spots, probably in Cleveland.

Patrick (CEO of WSO): [00:34:10] It's still pretty. It's pretty competitive. Yeah. Yeah, yeah. Yeah. So tell me about like, just let's Talk about the case today a little bit. So like you, they give you a company. How did you research? How did you just you just started building an operating model and started doing the elbow off of that and

Patrick (CEO of WSO): [00:34:24] And then just trying to get back into an IRR and

then looked at like basically just the industry and started digging in there. Did you use any third party research? How did you? Were you leveraging access from like Bloomberg or whatever Bloomberg or any other research you had to KeyBanc?

Harrison: [00:34:40] Yeah, I'd say all of it, and I think because you had, you know, almost a week to do it, you felt like you had to do all that stuff. So, yeah, everything from the operating model to like overlaying the elbow, I would say one thing that inevitably almost every banker that I've seen that comes in does a private equity model will do the traditional football field that also has M&A comps, public comps, LBO, DCF. I can honestly say I haven't done one DCF since I've gotten into private equity. So looking back on it, if I was going to cut anything out, it'd probably be that part of it. Not that it's that much incremental work, but you know, and then it was, you know, I think the comps was a big thing because, you know, once you get into private equity, you realize you kind of have you get a good gut sense of what it's going to take to be competitive in a process. And so but when you're when you're interviewing and you don't really have you don't really know that you think that it's really just you, it's all up to you to figure out that exact right valuation. And ultimately, that's not how it works in practice. But when you're doing the case study, you're like, Man, I got to find the very best comps. I got to do all this. And so that's what we did for the case study.

Patrick (CEO of WSO): [00:35:51] All right, cool. So it sounds like it worked, so you get the case study and then there's like the final round is more like just check the box kind

of thing with the partners there.

Harrison: [00:35:58] No. Very much. Not that way, actually. I would say

Patrick (CEO of WSO): [00:36:02] Grilled you on the case study. I'm sure

Harrison: [00:36:03] There was about probably two people that really went in depth on the case study.

Harrison: [00:36:08] And looking back on it again, now I would say what we typically do is we'll have one of either a kind of a senior associate level position really review the model in detail. Somebody else, usually it usually now it's a company that we have owned. So like we'll have maybe a VP or a partner who actually worked on that company, be the one who talked like, talk to the case study in terms of like diligence, items, pros, cons, et cetera. And then the rest is really based on fit. And there's a couple of, you know, there's a couple of partners that will ask some brainteasers isn't the right word, but just kind of like, you know, finance style question just to see how you think through problem solving.

Patrick (CEO of WSO): [00:36:47] But do you remember any of this?

Harrison: [00:36:49] I do in the partner would kill me if I if I shared it, because it's his go to.

Patrick (CEO of WSO): [00:36:53] All right, we don't have to. I don't want you get in trouble. So, OK, so but like brain teaser, teaser Ish, or maybe like a case sizing type question or whatever. So I get the idea. So you're. You start. How are things different, what's the transition like from the M&A type work you're doing to now, you're on now, you're a principal investor. What's the

Harrison: [00:37:16] Difference? I guess I'll start with like the

Patrick (CEO of WSO): [00:37:20] How many people how big are the offices like, what's the what's the like? Yeah, what's that?

Harrison: [00:37:25] Our fund is about a billion and a half dollar fund. We're in our seventh vintage now. We were in our sixth vintage back when I started. And we have investors in Cleveland, Dallas and San Francisco. And I would say each office has anywhere from 10 to 15 investors. So roughly our fund is probably somewhere around thirty five to 40 investors at any time in those three offices. Riverside in general, is a much bigger entity, but that's what our fund is.

Patrick (CEO of WSO): [00:37:53] Got it. And then in terms of just how things were so different, like were they very different? Was it did you feel like you were behind when you started? Or you felt like it was pretty easy to start reviewing Sims and, you know, type enough investing committee memos, running processes? What part felt like the hardest transition was just like running diligence processes like. Talking to the CFOs and CEOs, like what was it?

Harrison: [00:38:19] I would honestly probably say the hardest part is that you. You're the one deciding on what analysis to do and deciding when you've come to the right answer and for a lot of questions. What you find is you can continue to do research and continue to do work and continue to do analysis for as long as humanly possible. So I think the important thing that I looking back on is like before you just start digging in and doing every analysis and every research assignment under the Sun is to try and actually figure out the  three or four things that are actually really important for that deal and focus on those because you can you can just continue to work until you're blue in the face because you don't have, you know, you don't you typically aren't going to have somebody who's telling, like in banking, you have somebody who says, go make these

Harrison: [00:39:07] Three slides and come back to me. Go do this customer analysis and come back to me in private equity. It's a more open ended question where it's where your partner is going to say, Hey, is this a good company and you? What does that mean? So having getting yourself into a rhythm in a structure to be able to do that analysis without spinning your wheels on stuff that's not important is probably the biggest learning curve that I had.

Patrick (CEO of WSO): [00:39:29] Yeah, for me, it was it was really about. Going from like people telling you when you can go to the bathroom to nobody talking to you. I know getting fired from my first font within three four months. Oh wow. And it was I found out later because the fund was imploding. But like, I don't think I did myself any favors with. It's a little bit aimless, not really knowing where I should come in and where should come out, when I should be doing analyses, and I was given a lot of portfolio company work upfront where you were, you place on a lot of portfolio companies. It was that hard to kind of integrate yourself. I would say I

Harrison: [00:40:04] Probably wanted to get on more portfolio companies and this was probably just the dynamic of what our staffing situation was at the time. But typically, when I was starting your first six months, the new associates were only on New Deal stuff, which was which made it very lumpy. Like when you were looking at a new deal, you were really grinding. It was it was fun. It was exciting, it was fast paced. And then all of a sudden the deal would die. You would decide that you didn't like it. You would put in a bid and you wouldn't get the you wouldn't get a manager presentation, whatever it was. So it would go from one week. And then and then you're just waiting until the next week for new deals to come in to get started on something again. So you might go from working one week. Same as banking to all of a sudden, the next week you can leave at four p.m. Every day. But then but then after six months, I did get staffed on portfolio companies and then and then it's a pretty it becomes a more steady, even rhythm of looking at add ons, doing some portfolio company analysis, that kind of stuff.

Patrick (CEO of WSO): [00:40:58] You think it was like about 60 60 hours average as an associate deputy?

Harrison: [00:41:05] When you're not when you're not on something live, I would say probably in the 60 range when you're on something live, I would say more in the 80 80 ish range. I think Riverside Riverside in general probably is a we're a pretty high volume shop, so. So I would say riverside is probably not. It's probably on the high end of

Patrick (CEO of WSO): [00:41:26] This because you're doing so many deals and they're smaller.

Harrison: [00:41:28] Uh, yeah, you're doing a lot of deals we do. We do a bunch of add ons too. So I would say in my first couple of years, I think I was on three platforms. Three add ons and two exits over the course of. And the ones that closed. There's obviously a lot more that you look at. So there's you know that

Patrick (CEO of WSO): [00:41:48] That a lot. Yeah, that's a lot. Yeah, for sure. So, OK, so you're there for a couple of years is riverside like, Hey, get out of here in two years, usually for most people and go get your MBA or is it is it more traditionally like, Hey, you can stick around, there's a place here for you?

Harrison: [00:42:03] I would say it's kind of a hybrid, but I would say one thing that Riverside does really well is communicates really with you on where that kind of stands. And so I was fortunate enough to be to know that I wanted to stay in Cleveland. I was fortunate enough to know that I didn't really want to get an MBA if I if I didn't need to. And so that communication process was pretty easy and open at Riverside.

Patrick (CEO of WSO): [00:42:25] And how much how much of them extending you senior associate role was because you wanted to stay in Cleveland because you didn't necessarily want the MBA and how much of it was because you were just doing a good

Job and they liked you.

Harrison: [00:42:39] I mean, I think you have to have the second part. I think you have to be doing a good job to get the option. And I think that the other piece just help from the cultural fit, probably more than anything. So typically, I would say, seem to be, you know, to go from associate to senior associate. It's typically three years and I got promoted after two, which was, I think, maybe the reason I was doing a good job. I was pretty productive in terms of which is mostly luck because it's just whatever you get staffed on. But I got a lot of deals done early on in my time at Riverside, which was really helpful. So getting reps, I mean,

Patrick (CEO of WSO): [00:43:13] You something besides luck, though obviously you have to have deals that are doable. Like there's yeah, sometimes it's just a deal is there's no way a deal's there. But do you think there's something around a skill you have that specifically allowed you to close more? Is it schmoozing the sellers is like, what is it like?

Harrison: [00:43:30] Well, honestly, yeah, that's actually a little bit part of it is being able to win over the hearts and minds of the management team, right? But I mean, in the initial phase, when you're getting staff on stuff, I would say it's more of like maybe a little bit more of like a gut feel intangible thing of like this company seems good and this seems like this seems like the type of company that we would go after hard and understanding the process dynamic. So there's a lot of like intangible stuff that goes into kind of picking and choosing which deals you raise your hand for. Probably. And then there is a little bit of

Patrick (CEO of WSO):  [00:44:00] Meaning pushing hard, like, were they expecting you to go in front of the medicine committee right away as an associate and be like, Hey, this, we should pay 15 times for this company. Like, yes,

Harrison: [00:44:09] I would say not necessarily on the valuation side, but there definitely was an expectation that that you should be reaching out to the partner. If you see a deal, that's a manufacturing deal, you should be reaching out to the partner that you know is going to be the one looking at that because we do have the partners are specialized by industry or whatever it is. And so you should be reaching out and saying, Hey, I like this company for these reasons. If you're going to look at it, I like to be on the team. So there's definitely an aspect of that too, like being a little bit hungry.

Patrick (CEO of WSO):  [00:44:38] Very cool, and so you were hungry, apparently. And that's how you got the early promo. Did you feel like there was anything around advocating for yourself, for that early promo and for that stuff? Like, were you going in and having conversations with the partners about your future? Like they say, you said they do it early, but was it like where you were? You pushing the envelope a little bit and being a little bit like on that edge? Or was it more like just a natural thing that occurred because they like they liked how you're doing? Like, were they proactive about pulling you aside and saying, Hey, what are your thoughts? And then you're all you had to do is like, Yeah, I'd love to be here. I would say it's so we do. We do half year. Every six months, there's a check in with our fund manager where you sit down. And so I would say it was more natural within the scope of those conversations. I wasn't going to partners being like, Hey, I want to get promoted early, like or anything like that, right? I would say personally, I think the best way to show that you want to continue on is just to work hard, put your head down and work hard and almost like not lead by example, but work by example. And I think that that and even now that I've been in a situation where we're I'm in the discussions about who should be promoted and that sort of thing. That's that to me, always sticks out the most of who's, you know, who's going that extra mile of showing that they want it via their work, via the questions that they're asking. And that doesn't always mean that. I mean, honestly, in most cases, in my opinion, that doesn't mean that you're staying until midnight, when you could have left at 10, when you could have left at 10 p.m., it's more you. There's definitely still an element of working smart, not just working hard to it, but

Patrick (CEO of WSO): [00:46:05] It's an intellect thing or like. It's kind of a blend of an intellect with the soft skill, right?

Harrison: [00:46:10] Yeah. I mean, yeah, I would say the intellect is more of like the table stakes. And then what I'm a big fan of emotional intelligence, and I think that emotional intelligence is what allows people to maybe rise a little bit faster or be a little bit more successful, but that definitely there's a table stakes from that, from the smart side. But it's not. It's not. You have to be a rocket scientist to be in this industry.

Patrick (CEO of WSO): [00:46:33] Yeah. And then you got promoted again two years after that, you just recently, this past year. That seems that sounds fast to. Is that

Harrison: [00:46:40] Fast? Yeah. Yeah, it was

Patrick (CEO of WSO): [00:46:42] Rising star here. Can you tell me a little bit? I know you probably can't share the exact, but like Cleveland Private Equity Cleveland. We have some data on and I'm sure in the company database. But in terms of pay, is it? I assume it was like a If not a pay raise, Like at least flat from like an M&A job or whatever. But then. Is it like base around one hundred one hundred twenty five, or is it a little bit less because it's Cleveland? Can you share a little bit about like associate pay and then how it scales and if you're able to share anything about Kerry? Yeah, sure.

Harrison: [00:47:20] So and again, this is probably a little bit stale, I think there's been some adjustments since I started, but

Patrick (CEO of WSO):  [00:47:26] Sure, I mean, it can be it can be a slight range to you're not the

Harrison: [00:47:29] Yeah, I would say it was banking at the time that I was in banking in Cleveland. I want to say it was a slight haircut to what I was saying about Chicago. So if a second year, second or third year analyst in Chicago at that time was at 85 or 90, probably Cleveland might have been at 80, like maybe like 80. So maybe like a call like five. And then I would say that the transition from being a second year analyst to a first year associate was pretty comparable in terms of all NPA. So it wasn't a pay, wasn't a big pay raise, wasn't a pay cut necessarily. And then I would say, you know it, it scales similar to banking in general. So, you know, there is typically an annual 10k type of increase in

Patrick (CEO of WSO): [00:48:18] Salaries. Yeah, but really the bonuses where a lot of the bumps are right. Yeah, it was a little bit unique.

Harrison: [00:48:24] Again, because we are a decently high volume shop, junior investment professionals can make a good amount of money we do. We have part of our bonus that's based on deal closing deals. And so you can, you know, you can get pretty substantially over 100 hundred percent of your of your base if you if you do a number of deals.

Patrick (CEO of WSO):  [00:48:45] Is there any sort of co-invest

Harrison:  [00:48:47] You as a riverside employee? You can invest in our funds when they come up to be like when they're near closing, essentially. And that goes, that's not just the fun that you work in, which is a good benefit.

Patrick (CEO of WSO): [00:48:59] That's cool. Awesome. So how is the transition been? So it sounds like I'm a little more curious about, you know, you're an associate, your heads down, you're grinding, you're doing deals. It's a senior associate,

Patrick (CEO of WSO):  [00:49:09] Probably still mostly doing deals a little bit now,Maybe helping with the recruiting, I don't know, like reviewing the models like you said. How has the transition been to VP now where, you know, how has it shifted? Because it sounds like even as an associate, you were still bringing in deals or at least reviewing the stuff is more like, actually. You're going out there and bringing in more like you're expected to bring in your own deals, so what's that VP level like?

Harrison: [00:49:34] So I Riverside, we have a pretty big origination team. So actually even at the associate level, you weren't necessarily sourcing the deals. I was I think my comment was more around, like when you're at a management team dinner finding a way to distinguish yourself and actually get them to like you type of thing. So you're not we don't we didn't do a lot of origination, except for maybe some on some

add on work you might do some when you're actually on a portfolio company already. The biggest jump between associate and senior associate. Actually, there's not that much of a difference besides your. You have somebody that you're reviewing a little bit more. You start to get into that managing one type one person, but you're still doing a lot of the blocking and tackling. The bigger jump is definitely been to BP, especially within Riverside. We were very focused on industry specialization, so definitely at the VP level, you're focused on really starting to hone in on a couple of different sectors, which is which has been good and a great learning experience. You definitely it's

more proactive in general, so it's even more of the as a VP or we call them number twos. Our deal teams have number twos on them. Number one as a partner is the partner, number two is the either VP or principal. They're really playing the quarterback of the deal. So they're the ones that are that kind of the buck stops with us in terms of the process, the diligence, making sure you're turning over the right rocks,

Patrick (CEO of WSO):  [00:50:59] Especially to it's basically to it's the VP and the associate basically are the ones working together a lot of times with a partner like just giving like a thumbs up or thumbs down at the end or whatever. Is that fair?

Harrison: [00:51:12] Actually, we typically have four person deal team, so we'll have an associate, a senior associate. Okay, it's a lot.

Patrick (CEO of WSO):  [00:51:17] Ok, how do they associate the senior associate? Divide that work? There's enough. You guys go really deep in the diligence. We do a lot of diligence. Yeah, interesting, interesting. And I did a lot of like, you know, have to go into this. I'm just always curious about like what it's like at different shops like versus what I was. It was like a tailwind for me. For sure. Anything else, so like any final words of wisdom before we call it, it's been really interesting in terms of your path. Um, and just thought process of the moves you made and note for the listeners out there in terms of people that may want to follow a similar path. Any thoughts?

Harrison: [00:51:56] Yeah. I mean, the advice that I always give is be, you know, be proactive, but be sincere about it when you're doing networking and that sort of thing like, don't be don't be a pain. Don't act like don't at least. And this is my opinion being, you know, being from the Midwest, being in the midwest, I didn't really want to go to New York in that kind of thing and have that the whole like the very high finance type

experience. So I'm I tend to. Connect better with people who are a little bit more laid back, but sincere and still interested, so being intellectually curious, I think, is a very important aspect of being successful in any job, really. And then the other piece that I would say is like, This is the same advice I give to kids all the time is when you're when you're no matter what role you're in. Always try and think of how you're like, why you're doing what you're doing and how you can make the person above you drop a little bit easier. So. And in banking, as a very crude example in banking, if you're if you're an analyst and your associate says, Hey, go do this customer analysis and instead of just going back and doing it and saying, Hey, here's the customer analysis. Like, maybe you look at it and you say, Hey, I noticed customer number three grew 15 percent last year. I did a little bit more digging, and it's because they bought two more products than they bought historically. By doing that, one level next of layer of thinking is you would be surprised how few people do it. But I think it is very it's a very easy way to differentiate yourself.

Patrick (CEO of WSO): [00:53:28] Easy way to impress the boss. Oh, you did that. You did. Might you help me do my job? Thank you. Yeah, that's huge. Well, we'll end on that. I think it's great advice. And anyways, Harrison, thanks so much for taking the time. Yeah, Patrick, thanks for having me. And thanks to you, my listeners at Wall Street Oasis. If you have any suggestions whatsoever, please don't hesitate to send them my way. Patrick at Wall Street Oasis. And till next time.