October 7, 2020

Episode – 07

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[…] Jack AblinEpisode #7 : Cresset Capital’s CIO With $11 Billion AUM and $3 Billion in Acquisitions […]

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Jack Ablin, Cresset Capital’s CIO With $11 Billion AUM and $3 Billion in Acquisitions


Description:
Jack Ablin is Founding Partner and CIO of  Cresset Capital. Jack has been in money management for three decades and has maintained a client-centric view that’s enabled him to see market opportunities and challenges through an investor lens.

Mr. Ablin is a frequent contributor to CNBC, Bloomberg, The Wall Street Journal, and Barron’s. He served as a professor of finance at Boston University, Graduate School of Management. Mr. Ablin spent five years as a money and markets correspondent for the NBC affiliate in Jacksonville, Florida. He was named one of the Top 100 Wealth Advisors in North America by CityWealth Magazine in 2006, 2010-2017.

Cresset is a 21st century private wealth management company that integrates goals-based investing in public market securities with direct investments in private equity and real estate. Cresset Capital currently has $11 Billion AUM.

What you’ll learn from this episode:
– Managing money for a large portfolio
– Risk management
– How to invest with a time horizon
– Diversification

Connect with Jack:
LinkedIn

Full Transcript:

JP Maroney:

Hello, and welcome to another episode of the deal flow show on JP Maroney, your host, and along with my partner in crime here, mr. Paul Nicoline. And, um, we’re, we’re excited. We’ve got a guest on the show that I believe our team first connected with in LinkedIn in that. Right. And, um, we found out a little bit about what you guys were doing and thought that it was really good, that y’all could come on the deal flow shows, share from your storehouse of knowledge. Some of the things that you’ve learned Jack over the years, as well as to be able to talk about some of the deals that you all might be working on, how you put things together, your due diligence process, understanding that we’re both going to talk about the opportunities that you’re involved in now and share of your knowledge and the information that we’re using our giving in this show will also be part of a new book that we have coming out called makers, deal breakers. So excited to be able to tap into the years of experience that you have and put this together. So we have Jack Alvin on the show from Crescent capital and, um, you know, I’m gonna let you lead off this time and you ask all the big question. Well, we can start with the loaded one. How’d you get started in the business?

Jack Ablin:

Well, Paul, like Scott started the business in 1982. I was a math and computer major and learned that the mutual fund companies in Boston, the, um, the Putnam scoters, uh, I ended up at Keystone would not only pay for, uh, your business school, but they buy you your books and everything. So I started at Keystone as a quantitative analyst. My job at the time was to help, uh, analysts and portfolio managers take those green ledger sheets they had with their cash flow models and transition them onto spreadsheets. Those days it was visit calc and Lotus one, two, three. That’s how I got started in investment

JP Maroney:

Lotus one, two, three. Yeah. I haven’t heard those. Yeah. I haven’t heard those terms in a while. Um, talk a little bit about the work that y’all do today at Crescent capital, what sort of deals you’re working on?

Jack Ablin:

Sure. So, you know, our clientele is primarily entrepreneurs, business owners. First generation wealth typically have, uh, either engaged in their business and potentially sold their business, maybe sold a piece of their business. Um, and then have now moved from managing a, a privately held closely held business to now managing a capital, um, which is a very different experience. As you know, from entrepreneurs they’re generally control freaks. Uh, they believe that they have a sense of their own destiny. Um, they can always make tactical changes to the business to accommodate whatever challenges lie ahead. And then once they end up with just a pool of, of capital, uh, they feel completely helpless. So our job is really to take that capital and to harness it in a very similar way. They see, and they see their business. And what we do is we just start by building their own customized, defined benefit program. They say, what I, you know, first question is what do you need from this portfolio every year for the next 40 years? And let’s allocate that let’s dedicate, uh, assets to that. And then we’ve got money left over to do longer dated stuff. Um, our, our team, there are four original partners. Two of our partners are private equity professionals and, um, and, and myself and another partner came from the private banking investment world.

JP Maroney:

Well, I would have to agree with you that a K a we entrepreneurs after 30 years of building companies are control freaks. So you got it. Absolutely. A quick question. So we have a lot of folks that watch the deal flow show, listen to the deal flow show that are dear different phases of their businesses. And certainly many of them will be either coming up on or right in the middle of an exit. As you were talking about where now they’ve got capital, a pool of capital, what are some of the things that they should be thinking about as they’re putting together a deal team for the next phase of their business career, more going into the allocation process as opposed to operating company?

Jack Ablin:

Sure. I mean, we tend because you know, we’ve come from a history of entrepreneurship and we have a whole ecosystem of business owners. Um, we can offer a variety of advice, not just, you know, what, who are the best, um, bankers to use in their particular business, perhaps how to structure a deal. Um, maybe, um, uh, also structure the entity in which the, uh, the deal is held and then subsequently sold, perhaps if you want to get, uh, you know, create a succession plan to get the next generation involved in the business. Um, so we have a lot of experience with that. And then what your domicidal is, I mean, you know, you really want to sell your business in California. Um, only to find out that, you know, you owe the state, you know, an additional 13% or would you, you know, potentially relocate to Nevada, Texas, Florida, um, you know, somewhere else where perhaps the tax is a little bit less, so those are the kinds of things we try to, um, you know, capture pre deal, um, you know, pre-close, uh, and then of course helping, uh, manage liquidity once it comes in

JP Maroney:

The best of all worlds, how early are you coming into the process pre pre exit?

Jack Ablin:

Yeah. Um, we, you know, just because we’re, we are engaged with a number of, uh, bankers, um, they tend to bring us in, um, because, you know, they, they have, uh, an interest in making sure that not only is the deal successful, but their clients are, um, you know, achieve what they hope to achieve and on an after tax basis get what they’re hoping to achieve. So we really look at it from a tax perspective, uh, a family governance perspective, uh, and of course a financial planning perspective as well. So we, we, we often, um, get, uh, invited early on and then, um, we also come in after, after the deal has been closed as well. So just, uh, you know, different, different variations.

Paul Nicolini:

That’s great. Um, Crescent started in 2017, I think we said on a previous call and now you’ve got over eight offices. That’s pretty impressive growth. Can you explain how that transition is from, from startup to now?

Jack Ablin:

Yeah. Um, you know, so we, yeah, we we’ve just, uh, surpassed the $11 billion Mark, uh, and out of that 11 billion to 3 billion of it is acquired. So we did, we’ve made three acquisitions, uh, two relatively small ones, um, uh, two, $500 million assets under management businesses, and then one, $2 billion assets under management business earlier this year. Um, but you know, really, um, the rest is, you know, 9 billion is, is organic and it’s certainly impressive growth over the last two and a half, three years. Uh, and we’re on track to bring in another billion of, uh, of assets organically this year. So I think what we’re doing is, you know, where we’ve got a compelling story, we are now among the top 25, uh, largest RAs in the country. We’re the largest RIA in Illinois, and we’re now competing head to head with the bulge bracket banks, where we have a lot more flexibility and a lot and access to private investments, direct private investments, not, you know, fund to funds and too far away removed from the actual investment itself.

JP Maroney:

That that’s a, so that’s a good lead into the question that I was going to ask you about allocations. When we come back, we’ll talk about that. If you’re watching or listening to this episode of the deal flow show, you can get access to our previous episodes, our archives, and also subscribe and follow us for future episodes@thedealflowshow.com. That’s the deal flow show.com. Again, Jack Alvin here from crest at capital. So you were talking about the amount of number one, kudos for that much in assets, under management since 2017, um, further proof of what I keep saying. There’s money running in the streets. You just got to figure out where to put your bucket. And a lot of people, you know, they just don’t know where to put the bucket. So you guys have done an excellent job of attracting assets. What are y’all typically allocating to? What are y’all getting involved in? What kind of deal opportunities excite you today?

Jack Ablin:

Sure. So on the private side,

JP Maroney:

Oh, let’s talk about both, but let’s start with private. Yeah.

Jack Ablin:

So, um, you know, we, because we’re running a, um, goals based investing strategy. In other words, we, we drive the desire cash flows for our clients. We have three primary strategies that we employ. Our first strategy we call diversified income is to designed. It is designed to deliver cash flows from overnight to seven years. Our growth strategy is to delight, designed to deliver cash flows from seven to 15 years, and then our aspirational strategy designed to deliver cash flows 15 years and beyond generally, um, we try to lock in our client’s lifestyle, so to speak with the first two with diversified income and growth. And then that leaves aspirational, um, with what we call wealth surplus. So multigenerational perhaps impact charitable, uh, and whatever, you know, kind of desire and goal that family has for what we’ll call the next generation or beyond the 15 year time horizon.

Uh, what we look at is in our diversified income strategy, we’re looking for income from a variety of sources, obviously on the public markets sides. It’s pretty limited, whereas Hawking it, you know, pretty much bonds and preferred stock and things like that. Um, on the private side, we have a lot more flexibility. So we have a private credit vehicle where we’re looking at things like litigation, finance, life, insurance, settlements, music royalties, just trying to generate income from a variety of sources that don’t seem to be correlated with one another. We’re also looking to launch a real estate firm funding again for the diversified income strategy where we could be doing know we would be doing, uh, maybe some bridge financing and some other shorter term equity, um, holdings for, uh, high quality real estate. So that’s, that’s what we’re doing in the diversified income strategy and our growth strategy designed seven to 15 years.

You know, we have, uh, our own, um, uh, private equity secondaries vehicle called flow stone. Uh, so we’re, uh, in the market buying limited partnerships in the secondary market, um, and delivering those through a, um, a registered, um, interval fund. Uh, and then we do direct deals. We, we have a relationship with, um, Westman Rowe, capital, uh, Westman Rowe, the consulting company. And we, we have a partnership called Western roll capital where we’re finding original deal flow and doing direct deals that way. So we generally don’t buy funds or fund to funds. Uh, we’re looking for direct investment in private opportunities. What’s

JP Maroney:

The check size typically, if you don’t mind sharing,

Jack Ablin:

You know, so minimums for our clients, um, you know, we can do pieces as, as small as a hundred thousand, uh, and we do it on a preferred fee basis because they’re advisory clients. But I will say that we also, um, offer our, uh, vehicles to outside clients as well on other family offices. I should also mention, we have, um, we launched one of the first qualified opportunity. So in funds, back in late 2018, when legislation was first rolled out, uh, we, uh, raised 480 million in that fund closed it. And now we’re going to look at starting fund we’re we’re, we’re gathering assets for fun too, are y’all doing anything with sparks? We are considering it. We haven’t done anything with specs on it is a possibility because that’s our track record in history and private equity. Uh, we are considering perhaps raising us back, but we haven’t watched anythin

JP Maroney:

I would think it would be an interesting dynamic where y’all have the, obviously the Capitol, but you also have a pool of experienced operators that have exited where you could build a pretty incredible leadership team and or board for a SPAC and be able to go and do something pretty extraordinary in the market. That just seems like a natural.

Jack Ablin:

Yeah. I mean, we have just a really fantastic advisory board of leaders of, uh, you know, companies from a variety of industries and et cetera. It’s, it’s fascinating. We actually did our shareholder meeting last week and an advisory board meeting. And it was a, uh, there was a fun conversation, pretty much an all day meeting, but it was, uh, it was really engaging.

JP Maroney:

I think it would be interesting. And I don’t know if y’all, I know y’all have video capabilities cause you have the guy helping there in the beginning have y’all tapped into the knowledge of all of this breadth, breadth of experience and captured it in any kind of educational pieces.

Jack Ablin:

Um, we have, um, you know, we have John webcasts and links for our clients. In fact, I was just on one, uh, that we try to do every other week. Uh, this one was more market oriented, uh, but we can also get, uh, other parts of our, uh, leadership team. Um, you know, for example, for some reason we have, um, a whole country of former, uh, auto dealers. You know, these are, these are families that have own, uh, franchises of auto dealerships throughout the country. Um, and have, um, you know, maybe just because they know each other, they’ve, they’ve come on board. So we have a whole, so if, if, uh, you know, we’re looking for anything in auto or order retail, uh, we have, uh, a wealth of information and knowledge just on our advisory.

JP Maroney:

That’s exciting. I love the ability to be able to tap into a brain trust like that. It’s always made sense to me as Harbor city has talked about the next phase and where we grow in terms of acquisitions and private equity side, to be able to bring those leaders of those businesses together, to cross share and cross pollinate the things that are working and the things that have historically worked in a diverse number of different industries. I just love the ability to transplant great strategies and ideas from one industry to another

Paul Nicolini:

Good seg-Way. Cause we were going toask, what are some of your success drivers?

Jack Ablin:

Yeah, I, you know, I think a lot of it is very strong culture. Um, we know who we are and we know who we want to serve. Um, you know, so if you juxtapose, um, you know, crests it against, you know, a bulge bracket, private bank, like a Northern trust or Bessemer or, um, you know, JP Morgan, let’s say, you know, think about it in terms of inherited wealth versus first-generation originated wealth. And I think, you know, well, I’m not going to seize it inherited wealth. Um, we really don’t cater that, uh, you know, kind of client partially because we like that hands-on, uh, impact, um, that our, our clients have. In fact, I should mention that 30% of our company is owned by our clients. Uh, the other 70% is owned by employees. So not only do our clients get really excited or prospects that really excited about, you know, participating in what we’re doing, but they actually, you know, want to buy it and, um, and we allow them to do that.

Paul Nicolini:

That’s great. Uh, Jack, you’re a prognosticator as well. I’ve seen you on CNBC. I’m sure some of our, most of our audience probably has to tell us about what you see in the capital markets today. And more importantly, I guess, going forward, being that we’re dragged through the mud here with COVID and the election year, what do you see in the short term future of the markets?

Jack Ablin:

Sure. Um, so, you know, one of the things I noticed with this tech downturn, um, is a recognition that perhaps investors are starting to see light at the end of the tunnel. Um, it’s, there’s actually good news. You know, I’ll ask you guys and I’m sure, you know, the answer, um, you know, what’s done better over the last six months, Amazon or Royal Caribbean cruise lines,

JP Maroney:

Royal Caribbean, Royal Caribbean for $500.

Jack Ablin:

Yeah. Caribbean is up is almost doubled the return of Amazon since the middle of March. Uh, and in fact, a lot of that boost, uh, was since the end of July. And so, you know, when, when investors are jumping on Royal Caribbean and moving away from Amazon, what that suggests to me is perhaps they’re starting to see that light at the end of the tunnel that maybe this vaccine is around the corner, that life will eventually get back to normal. And then companies like, um, uh, Royal, Caribbean and others have thanks to the fed, have been able to raise debt and sustain themselves through this drought. Uh, and we’ll come out the other side, not only alive, um, but probably pretty well positioned. So, um, I view that as a rotation, I think because these, you know, the five tech big five tech companies do represent 25% of the S and P 500, uh, it will look like a fallback, um, but it will actually be a broadening of, um, you know, a lot of the out of the way names that have not participated in fact year to date, half the S and P 500 is either at zero or, uh, in negative territory year to date.

So I view it as a broadening, um, but we will see some choppiness around the election. We will see some certainty. Um, some of our clients want, uh, hedges of their portfolio out to December. I can’t blame them. Um, um, you know, I’m kind of agnostic, but, uh, we can put option hedges. We don’t buy structured notes. Um, we actually put the, um, the exchange traded options in place to do essentially the same thing without having to rely on, uh, you know, a, your bag as a counterparty.

JP Maroney:

You talked about in the beginning, your background or the beginning of your training, as in quantitative analysis, I want to come back and piggyback off of that in just a moment. But if you’re watching or listening to this episode of the deal flow show, you can get access to our previous episodes as well as get access to our future episodes by following and subscribing to us@thedealflowshowdotcomthedealflowshow.com. We’ve got Jack Alvin, obviously on this episode from Crescent capital. So you started from, you know, as an entrepreneur, I’m a gunslinger, right? So raised in a completely different environment, the environment you came up in, very numbers, driven analysis and process and all of that. What is your process or analysis when y’all look at a fresh deal, how do you approach it? What are some of the steps that you walk through in that due diligence or evaluation process?

Jack Ablin:

Sure. Um, you know, really what we’re, what we want to do is look at it with the client in mind. So, you know, most of our clients are looking, uh, not to hit a grand slam, uh, or even a home run. I think they’re looking for current income, they’re looking for stability, they’re looking for predictability. Um, so for us, we like middle-market cashflowing deals. Uh, we’ll also take, uh, we did take a minority position in the company using a convertible preferred. Uh, so, you know, we’re willing to give up that, you know, 25 to 30% IRR in exchange for, you know, 12 to 16% IRR with a stable, predictable cash flow. Um, so for that, for us, that’s a home run. Um, we’re also, uh, right now, not, um, in too much of the venture capital business, um, not to say we’ll never get there.

Um, but again, we’re really looking for middle-market stable, uh, operating businesses and, and real estate, um, you know, middle of the fairway stuff and we take on low leverage. So from that perspective, that’s, that’s kind of what we’re, we’re looking for on our qualified opportunity zone. We’ve partnered with, um, Larry Levy and diversified who by the way, is a client and an advisory board member, uh, and Heinz, uh, you know, top-notch developer to build real, uh, trophy properties all over the country, mostly multifamily, um, in opportunities zones. Uh, so those are the kinds of, um, deals, uh, kinds of plays, you know, we’re looking for. So, um, it isn’t to say, we won’t look at something opportunistic, but we’re just not there yet.

Paul Nicolini:

Yeah. Tell us with $11 billion under management, there’s gotta be undoubtedly a lot of ups and downs. How do you manage the

Jack Ablin:

Yeah, so a lot of it is really just, you know, managing the market managing expectations. So, um, so for example, you know, our equity strategy is a, you know, a seven year minimum. So we’ve designed our equity, um, portfolio to have a 90% success rate and making money over a seven year holding period. And if we, and every quarter, we look out seven years based on our new capital market assumptions. And if we cannot assure ourselves of a 90% success rate, because it’s maybe valuation’s too high and we will actually take risk off the table. In fact, we did that in the fourth quarter of 2019. We couldn’t get to that 90% success rate number and re and they actually entered, uh, 2020 with 15 percentage points worth of cash. Um, so that helped us in the March 31 when we ran it and got back to that number.

So that’s how we do it on the growth side. It’s all longterm, you know, and you know, how it works. I mean, if you buy the market today, you have maybe a 50 to 53% chance of making money over a one day holding period, a 60 something percent chance of one year, 70% chance over five years. And, you know, roughly 85, uh, percent over seven years in a diversified equity mix. It’s, it’s over 90%. We do the same thing with our, uh, our income strategy too. We want a 95% success rate in a positive return over a three year holding period. And we’re willing to make those risk adjustments to make sure that happens. So it’s all about delivering on the predictability, trying to harness predictability from what seems like an unpredictable market, especially as you said, you know, as we’ve said from these control freak entrepreneurs who want to know where every dollar is going and where it’s coming from,

JP Maroney:

You gave a, some statistical information there. How much has that been affected? What you’ve probably been talking about for the last 20, 30 years with this statistical, how it might look in 24 hours or a day, you know, versus a week or a month or a year, how much of that has changed over the last three and a half years under the current administration? And how much of that has changed over the last, say five, six months under COVID?

Jack Ablin:

Yeah, so, um, a lot has changed. I mean, I would say as of maybe five years ago that 90% success rate over seven years could have just been achieved by the S and P 500 by itself, um, between five years and last year, uh, we had a diversified, we had to go to more of a, you know, a, uh, an Acquia, a total world portfolio to be able to get that 90% last year, it fell below 90, uh, ACQUITY fell below 90. So we had it now take risk off the table. Um, as of March, uh, it opt back up above 90, we were able to add, you know, guys, I think we could be looking at the end of this month in September, that’s the same statistic we may be, um, prompted to take money off the table again. Uh, I haven’t run the numbers yet, uh, because, uh, you know, we haven’t calculated it. Um, but I suspect we will be taking some of our risk off the table and our growth strategy. It is September 30th with low interest rates, higher volatility and expected returns. And they’re closer to the basement than the ceiling. Um, it’s a harder and harder hurdle to achieve.

Paul Nicolini:

Did Z election come into play as well?

Jack Ablin:

No, no, because we’re looking seven years. It really doesn’t. Um, the only way would come into consideration is if, you know, by September 30th, the marker was a lot cheaper and everyone’s worried. Um, you know, I will say, um, you know, one of the other things I look at is investor sentiment. Um, we, we track, um, bulls and bears, uh, and right now, uh, on a bullish and bearish, uh, continuum, we’re in the fourth percentile, one of the bottom decile of its historical range. And that’s generally bullish one year, hence, um, when the market, when, when investors are so widespread bearish, um, their expectations are very well and in the market where it’s just, uh, you know, the reality of, uh, or the combination of reality and expectations, but better to have low expectations than high expectations.

Paul Nicolini:

That’s great, Jack. Um, when you’re working with other people on a deal, we know there’s a lot of moving parts and so forth. What are some of the deal breakers for you?

Jack Ablin:

Yeah. I mean, one of the things we do, which is a little bit different than a lot of other, um, you know, private equity deal investors, as we look from the top down. So, you know, what we want to do is figure out where a deal like that would fit, uh, because we have certain parameters we’re looking for. So for example, you know, if we’re looking for income real estate in our diversified income strategy, one is we have to make sure we can get full, you know, full circle back, uh, or at least a fair market value within seven years. Um, secondly it has to pay per an income. Thirdly, it has to possess a volatility, uh, underlying volatility. That’s consistent with the risk parameters. We have an ad strategy. So in many respects, that’s where the deal breaker is going to be. It’s just that the parameters don’t fit.

Um, and the only other thing would be maybe too much leverage. Uh, you know, we want to be able to ride through downturns. We’re willing we were ready to hold forever. Uh, we don’t buy a deal with an expectation of flipping it, uh, you know, over the next, uh, you know, three or five years. And that’s really a huge difference from a lot of private equity fund investing where, you know, because of their economics, as soon as they acquire a deal, the shock clock starts, uh, and the faster they can turn that thing around and flip it out, the better their deal economics are, even if it means, uh, sacrificing a return for their limited partners. So for us, you know, we want to own it the way a family would own a deal. You know, we, we, we try to, we’re trying to do is create a family office environment, and we’re bringing it downscale, uh, to clients, you know, $10 million and even a little bit lower than that.

JP Maroney:

We wrote the wall street, best seller, reading minds and markets. I want to talk a little bit about that in just a moment, but if you’re watching or listening to this episode of the deal flow show, you can get access to our previous episodes archives, as well as subscriber, follow us for future episodes, by going to the deal flow show.com. We have Jack Alvin on from Crescent capital Jack. Um, you wrote this book and we’re all told, or at least advisors are always telling people, don’t try to time the market or maybe read the market or some of them, but you wrote a book that says how to read minds and markets. What does that mean? Sure. So

Jack Ablin:

This was before I really latched onto, um, goals based investing. I was fascinated with this conundrum between the predictability of tranquility, uh, that investors want from their lifestyle. And yet it’s funded by something so volatile and irrational and just, um, you know, obscure. Um, and so I had really spent most of my career trying to harness the uncertainty to deliver predictable results. And so reading minds and markets was a way using macro risk adjustment to essentially take a, a 70, 30 portfolio, but create the same downside risk as a 50 50 portfolio. And so I did that, uh, with a firm that I, that I launched, um, in, uh, mid 1990s, and then sold that to Harris bank in 2000 and then came on board as their chief investment officer at Harris bank BMO, uh, from 2001 to 2017, before then I latched on to this new goals based investing, uh, that delivers really that, uh, combination of, of, um, you know, diversification and holding period to deliver those predictable.

JP Maroney:

Have you found, this is kind of a sidebar question, but you wrote a book you’re obviously a recognized authority in the media. Have you found that the book opened doors or opportunities led to opportunities that you may not have had otherwise I heard a great quote the other day. I don’t know if you’ve ever heard this quote, but it says if you’re not at the table, you’re on the menu. And I think that my opinion is that a book being an authority can get you to certain deal tables that you may not have had access to before. How has that worked for you?

Jack Ablin:

I think, um, no, I think what it’s done is it’s offered a little credibility, um, that, you know, I can, I can, uh, you know, put my, um, you know, thinking down where my mouth is. Um, and, uh, you know, so I think I’ve, I’ve still had to get myself to the table, but I think having this book and also having, I was on the, uh, faculty, I was in the finance department at Boston university school of management. Um, so having an academic backward ground gives me a little credibility, uh, once I’m at the table, but I’m not sure it’s created opportunities where they wouldn’t have existed without, without that

Paul Nicolini:

Jack we’ve had a lot of great guests like yourself on the show. What kind of people would you like to connect with from our audience and our, our viewers and our also our guests?

Jack Ablin:

Sure. I mean, I would say our ideal client is a, you know, uh, an entrepreneur, uh, someone that understands business has appreciates what it takes to actually build their business and grow a private business and in the risks and all the sacrifices, uh, involved with, um, you know, with that business, uh, and, um, you know, talk to us, um, you know, I think you’ll find that we’re all, I mean, I even, you know, like I said, I, my, I have had, uh, started businesses myself and I think that allowed me to really see, um, the world through the eyes of many of our clients. So, um, I would say reach out to us and connect because, uh, we have a full ecosystem of really brilliant entrepreneurs. And they’re very excited about doing

JP Maroney:

What is the best way for someone to get in touch with you or Cresa is it the website email? 

Jack Ablin:

Yeah, I would say let’s, you know, I would suggest start with, um, going to Crescent capital.com and, um, and you can reach out to us through that website. Um, if you’d like to send me an email, you’re welcome to do that at, uh, J Ablin J a, B L I n@crescentcapital.com, but, you know, the, the, the, uh, the website’s great too. So either way it would be fine

Paul Nicolini:

To catch you off guard, but we asked this to, to all our guests share with us something that otherwise the business community wouldn’t know about.

Jack Ablin:

Uh, I wrote a golf book also. Um, so, um, back before I had kids, I saw I had another entrepreneurial endeavor, um, back when I was living in Boston. Uh, and, uh, before I had kids, I partnered with a friend, uh, and we wrote a guide to golf in new England. It’s called the new England golf guide. And, uh, we loved it. Uh, it was a great way to be involved in the golf business. Uh, and we’ve, I’ve met a ton of fun people from that. Uh, got to go to the, uh, the PGA show in Orlando. Um, it was, it was just fun engaging with, uh, uh, the golf world through, you know, kind of a business lens.

JP Maroney:

Fantastic. That’s great. That’s great. Jack Alvin crest at capital. Thanks for coming on the show. Once again, on behalf of my colleague here, mr. Paul Nicoline, myself, JP Maroney, the team at Harbor city and the deal flow show. We really appreciate you coming on and look forward to seeing what comes from this. As I had mentioned before, we are going to be publishing a book called deal makers, deal breakers, and sharing a lot of the wisdom that we draw from the show. And we certainly would love to include quotes and information from that, reach out to jack@crescentcapital.com. And we’ll see you on another episode, very soon of the deal flow show. If you want to get access to more episodes, you can go to deal the deal flow show dot, take care, everybody

October 7, 2020

Jack Ablin, Cresset Capital’s CIO With $11 Billion AUM and $3 Billion in Acquisitions


Description:
Jack Ablin is Founding Partner and CIO of  Cresset Capital. Jack has been in money management for three decades and has maintained a client-centric view that’s enabled him to see market opportunities and challenges through an investor lens.

Mr. Ablin is a frequent contributor to CNBC, Bloomberg, The Wall Street Journal, and Barron’s. He served as a professor of finance at Boston University, Graduate School of Management. Mr. Ablin spent five years as a money and markets correspondent for the NBC affiliate in Jacksonville, Florida. He was named one of the Top 100 Wealth Advisors in North America by CityWealth Magazine in 2006, 2010-2017.

Cresset is a 21st century private wealth management company that integrates goals-based investing in public market securities with direct investments in private equity and real estate. Cresset Capital currently has $11 Billion AUM.

What you’ll learn from this episode:
– Managing money for a large portfolio
– Risk management
– How to invest with a time horizon
– Diversification

Connect with Jack:
LinkedIn

Full Transcript:

JP Maroney:

Hello, and welcome to another episode of the deal flow show on JP Maroney, your host, and along with my partner in crime here, mr. Paul Nicoline. And, um, we’re, we’re excited. We’ve got a guest on the show that I believe our team first connected with in LinkedIn in that. Right. And, um, we found out a little bit about what you guys were doing and thought that it was really good, that y’all could come on the deal flow shows, share from your storehouse of knowledge. Some of the things that you’ve learned Jack over the years, as well as to be able to talk about some of the deals that you all might be working on, how you put things together, your due diligence process, understanding that we’re both going to talk about the opportunities that you’re involved in now and share of your knowledge and the information that we’re using our giving in this show will also be part of a new book that we have coming out called makers, deal breakers. So excited to be able to tap into the years of experience that you have and put this together. So we have Jack Alvin on the show from Crescent capital and, um, you know, I’m gonna let you lead off this time and you ask all the big question. Well, we can start with the loaded one. How’d you get started in the business?

Jack Ablin:

Well, Paul, like Scott started the business in 1982. I was a math and computer major and learned that the mutual fund companies in Boston, the, um, the Putnam scoters, uh, I ended up at Keystone would not only pay for, uh, your business school, but they buy you your books and everything. So I started at Keystone as a quantitative analyst. My job at the time was to help, uh, analysts and portfolio managers take those green ledger sheets they had with their cash flow models and transition them onto spreadsheets. Those days it was visit calc and Lotus one, two, three. That’s how I got started in investment

JP Maroney:

Lotus one, two, three. Yeah. I haven’t heard those. Yeah. I haven’t heard those terms in a while. Um, talk a little bit about the work that y’all do today at Crescent capital, what sort of deals you’re working on?

Jack Ablin:

Sure. So, you know, our clientele is primarily entrepreneurs, business owners. First generation wealth typically have, uh, either engaged in their business and potentially sold their business, maybe sold a piece of their business. Um, and then have now moved from managing a, a privately held closely held business to now managing a capital, um, which is a very different experience. As you know, from entrepreneurs they’re generally control freaks. Uh, they believe that they have a sense of their own destiny. Um, they can always make tactical changes to the business to accommodate whatever challenges lie ahead. And then once they end up with just a pool of, of capital, uh, they feel completely helpless. So our job is really to take that capital and to harness it in a very similar way. They see, and they see their business. And what we do is we just start by building their own customized, defined benefit program. They say, what I, you know, first question is what do you need from this portfolio every year for the next 40 years? And let’s allocate that let’s dedicate, uh, assets to that. And then we’ve got money left over to do longer dated stuff. Um, our, our team, there are four original partners. Two of our partners are private equity professionals and, um, and, and myself and another partner came from the private banking investment world.

JP Maroney:

Well, I would have to agree with you that a K a we entrepreneurs after 30 years of building companies are control freaks. So you got it. Absolutely. A quick question. So we have a lot of folks that watch the deal flow show, listen to the deal flow show that are dear different phases of their businesses. And certainly many of them will be either coming up on or right in the middle of an exit. As you were talking about where now they’ve got capital, a pool of capital, what are some of the things that they should be thinking about as they’re putting together a deal team for the next phase of their business career, more going into the allocation process as opposed to operating company?

Jack Ablin:

Sure. I mean, we tend because you know, we’ve come from a history of entrepreneurship and we have a whole ecosystem of business owners. Um, we can offer a variety of advice, not just, you know, what, who are the best, um, bankers to use in their particular business, perhaps how to structure a deal. Um, maybe, um, uh, also structure the entity in which the, uh, the deal is held and then subsequently sold, perhaps if you want to get, uh, you know, create a succession plan to get the next generation involved in the business. Um, so we have a lot of experience with that. And then what your domicidal is, I mean, you know, you really want to sell your business in California. Um, only to find out that, you know, you owe the state, you know, an additional 13% or would you, you know, potentially relocate to Nevada, Texas, Florida, um, you know, somewhere else where perhaps the tax is a little bit less, so those are the kinds of things we try to, um, you know, capture pre deal, um, you know, pre-close, uh, and then of course helping, uh, manage liquidity once it comes in

JP Maroney:

The best of all worlds, how early are you coming into the process pre pre exit?

Jack Ablin:

Yeah. Um, we, you know, just because we’re, we are engaged with a number of, uh, bankers, um, they tend to bring us in, um, because, you know, they, they have, uh, an interest in making sure that not only is the deal successful, but their clients are, um, you know, achieve what they hope to achieve and on an after tax basis get what they’re hoping to achieve. So we really look at it from a tax perspective, uh, a family governance perspective, uh, and of course a financial planning perspective as well. So we, we, we often, um, get, uh, invited early on and then, um, we also come in after, after the deal has been closed as well. So just, uh, you know, different, different variations.

Paul Nicolini:

That’s great. Um, Crescent started in 2017, I think we said on a previous call and now you’ve got over eight offices. That’s pretty impressive growth. Can you explain how that transition is from, from startup to now?

Jack Ablin:

Yeah. Um, you know, so we, yeah, we we’ve just, uh, surpassed the $11 billion Mark, uh, and out of that 11 billion to 3 billion of it is acquired. So we did, we’ve made three acquisitions, uh, two relatively small ones, um, uh, two, $500 million assets under management businesses, and then one, $2 billion assets under management business earlier this year. Um, but you know, really, um, the rest is, you know, 9 billion is, is organic and it’s certainly impressive growth over the last two and a half, three years. Uh, and we’re on track to bring in another billion of, uh, of assets organically this year. So I think what we’re doing is, you know, where we’ve got a compelling story, we are now among the top 25, uh, largest RAs in the country. We’re the largest RIA in Illinois, and we’re now competing head to head with the bulge bracket banks, where we have a lot more flexibility and a lot and access to private investments, direct private investments, not, you know, fund to funds and too far away removed from the actual investment itself.

JP Maroney:

That that’s a, so that’s a good lead into the question that I was going to ask you about allocations. When we come back, we’ll talk about that. If you’re watching or listening to this episode of the deal flow show, you can get access to our previous episodes, our archives, and also subscribe and follow us for future episodes@thedealflowshow.com. That’s the deal flow show.com. Again, Jack Alvin here from crest at capital. So you were talking about the amount of number one, kudos for that much in assets, under management since 2017, um, further proof of what I keep saying. There’s money running in the streets. You just got to figure out where to put your bucket. And a lot of people, you know, they just don’t know where to put the bucket. So you guys have done an excellent job of attracting assets. What are y’all typically allocating to? What are y’all getting involved in? What kind of deal opportunities excite you today?

Jack Ablin:

Sure. So on the private side,

JP Maroney:

Oh, let’s talk about both, but let’s start with private. Yeah.

Jack Ablin:

So, um, you know, we, because we’re running a, um, goals based investing strategy. In other words, we, we drive the desire cash flows for our clients. We have three primary strategies that we employ. Our first strategy we call diversified income is to designed. It is designed to deliver cash flows from overnight to seven years. Our growth strategy is to delight, designed to deliver cash flows from seven to 15 years, and then our aspirational strategy designed to deliver cash flows 15 years and beyond generally, um, we try to lock in our client’s lifestyle, so to speak with the first two with diversified income and growth. And then that leaves aspirational, um, with what we call wealth surplus. So multigenerational perhaps impact charitable, uh, and whatever, you know, kind of desire and goal that family has for what we’ll call the next generation or beyond the 15 year time horizon.

Uh, what we look at is in our diversified income strategy, we’re looking for income from a variety of sources, obviously on the public markets sides. It’s pretty limited, whereas Hawking it, you know, pretty much bonds and preferred stock and things like that. Um, on the private side, we have a lot more flexibility. So we have a private credit vehicle where we’re looking at things like litigation, finance, life, insurance, settlements, music royalties, just trying to generate income from a variety of sources that don’t seem to be correlated with one another. We’re also looking to launch a real estate firm funding again for the diversified income strategy where we could be doing know we would be doing, uh, maybe some bridge financing and some other shorter term equity, um, holdings for, uh, high quality real estate. So that’s, that’s what we’re doing in the diversified income strategy and our growth strategy designed seven to 15 years.

You know, we have, uh, our own, um, uh, private equity secondaries vehicle called flow stone. Uh, so we’re, uh, in the market buying limited partnerships in the secondary market, um, and delivering those through a, um, a registered, um, interval fund. Uh, and then we do direct deals. We, we have a relationship with, um, Westman Rowe, capital, uh, Westman Rowe, the consulting company. And we, we have a partnership called Western roll capital where we’re finding original deal flow and doing direct deals that way. So we generally don’t buy funds or fund to funds. Uh, we’re looking for direct investment in private opportunities. What’s

JP Maroney:

The check size typically, if you don’t mind sharing,

Jack Ablin:

You know, so minimums for our clients, um, you know, we can do pieces as, as small as a hundred thousand, uh, and we do it on a preferred fee basis because they’re advisory clients. But I will say that we also, um, offer our, uh, vehicles to outside clients as well on other family offices. I should also mention, we have, um, we launched one of the first qualified opportunity. So in funds, back in late 2018, when legislation was first rolled out, uh, we, uh, raised 480 million in that fund closed it. And now we’re going to look at starting fund we’re we’re, we’re gathering assets for fun too, are y’all doing anything with sparks? We are considering it. We haven’t done anything with specs on it is a possibility because that’s our track record in history and private equity. Uh, we are considering perhaps raising us back, but we haven’t watched anythin

JP Maroney:

I would think it would be an interesting dynamic where y’all have the, obviously the Capitol, but you also have a pool of experienced operators that have exited where you could build a pretty incredible leadership team and or board for a SPAC and be able to go and do something pretty extraordinary in the market. That just seems like a natural.

Jack Ablin:

Yeah. I mean, we have just a really fantastic advisory board of leaders of, uh, you know, companies from a variety of industries and et cetera. It’s, it’s fascinating. We actually did our shareholder meeting last week and an advisory board meeting. And it was a, uh, there was a fun conversation, pretty much an all day meeting, but it was, uh, it was really engaging.

JP Maroney:

I think it would be interesting. And I don’t know if y’all, I know y’all have video capabilities cause you have the guy helping there in the beginning have y’all tapped into the knowledge of all of this breadth, breadth of experience and captured it in any kind of educational pieces.

Jack Ablin:

Um, we have, um, you know, we have John webcasts and links for our clients. In fact, I was just on one, uh, that we try to do every other week. Uh, this one was more market oriented, uh, but we can also get, uh, other parts of our, uh, leadership team. Um, you know, for example, for some reason we have, um, a whole country of former, uh, auto dealers. You know, these are, these are families that have own, uh, franchises of auto dealerships throughout the country. Um, and have, um, you know, maybe just because they know each other, they’ve, they’ve come on board. So we have a whole, so if, if, uh, you know, we’re looking for anything in auto or order retail, uh, we have, uh, a wealth of information and knowledge just on our advisory.

JP Maroney:

That’s exciting. I love the ability to be able to tap into a brain trust like that. It’s always made sense to me as Harbor city has talked about the next phase and where we grow in terms of acquisitions and private equity side, to be able to bring those leaders of those businesses together, to cross share and cross pollinate the things that are working and the things that have historically worked in a diverse number of different industries. I just love the ability to transplant great strategies and ideas from one industry to another

Paul Nicolini:

Good seg-Way. Cause we were going toask, what are some of your success drivers?

Jack Ablin:

Yeah, I, you know, I think a lot of it is very strong culture. Um, we know who we are and we know who we want to serve. Um, you know, so if you juxtapose, um, you know, crests it against, you know, a bulge bracket, private bank, like a Northern trust or Bessemer or, um, you know, JP Morgan, let’s say, you know, think about it in terms of inherited wealth versus first-generation originated wealth. And I think, you know, well, I’m not going to seize it inherited wealth. Um, we really don’t cater that, uh, you know, kind of client partially because we like that hands-on, uh, impact, um, that our, our clients have. In fact, I should mention that 30% of our company is owned by our clients. Uh, the other 70% is owned by employees. So not only do our clients get really excited or prospects that really excited about, you know, participating in what we’re doing, but they actually, you know, want to buy it and, um, and we allow them to do that.

Paul Nicolini:

That’s great. Uh, Jack, you’re a prognosticator as well. I’ve seen you on CNBC. I’m sure some of our, most of our audience probably has to tell us about what you see in the capital markets today. And more importantly, I guess, going forward, being that we’re dragged through the mud here with COVID and the election year, what do you see in the short term future of the markets?

Jack Ablin:

Sure. Um, so, you know, one of the things I noticed with this tech downturn, um, is a recognition that perhaps investors are starting to see light at the end of the tunnel. Um, it’s, there’s actually good news. You know, I’ll ask you guys and I’m sure, you know, the answer, um, you know, what’s done better over the last six months, Amazon or Royal Caribbean cruise lines,

JP Maroney:

Royal Caribbean, Royal Caribbean for $500.

Jack Ablin:

Yeah. Caribbean is up is almost doubled the return of Amazon since the middle of March. Uh, and in fact, a lot of that boost, uh, was since the end of July. And so, you know, when, when investors are jumping on Royal Caribbean and moving away from Amazon, what that suggests to me is perhaps they’re starting to see that light at the end of the tunnel that maybe this vaccine is around the corner, that life will eventually get back to normal. And then companies like, um, uh, Royal, Caribbean and others have thanks to the fed, have been able to raise debt and sustain themselves through this drought. Uh, and we’ll come out the other side, not only alive, um, but probably pretty well positioned. So, um, I view that as a rotation, I think because these, you know, the five tech big five tech companies do represent 25% of the S and P 500, uh, it will look like a fallback, um, but it will actually be a broadening of, um, you know, a lot of the out of the way names that have not participated in fact year to date, half the S and P 500 is either at zero or, uh, in negative territory year to date.

So I view it as a broadening, um, but we will see some choppiness around the election. We will see some certainty. Um, some of our clients want, uh, hedges of their portfolio out to December. I can’t blame them. Um, um, you know, I’m kind of agnostic, but, uh, we can put option hedges. We don’t buy structured notes. Um, we actually put the, um, the exchange traded options in place to do essentially the same thing without having to rely on, uh, you know, a, your bag as a counterparty.

JP Maroney:

You talked about in the beginning, your background or the beginning of your training, as in quantitative analysis, I want to come back and piggyback off of that in just a moment. But if you’re watching or listening to this episode of the deal flow show, you can get access to our previous episodes as well as get access to our future episodes by following and subscribing to us@thedealflowshowdotcomthedealflowshow.com. We’ve got Jack Alvin, obviously on this episode from Crescent capital. So you started from, you know, as an entrepreneur, I’m a gunslinger, right? So raised in a completely different environment, the environment you came up in, very numbers, driven analysis and process and all of that. What is your process or analysis when y’all look at a fresh deal, how do you approach it? What are some of the steps that you walk through in that due diligence or evaluation process?

Jack Ablin:

Sure. Um, you know, really what we’re, what we want to do is look at it with the client in mind. So, you know, most of our clients are looking, uh, not to hit a grand slam, uh, or even a home run. I think they’re looking for current income, they’re looking for stability, they’re looking for predictability. Um, so for us, we like middle-market cashflowing deals. Uh, we’ll also take, uh, we did take a minority position in the company using a convertible preferred. Uh, so, you know, we’re willing to give up that, you know, 25 to 30% IRR in exchange for, you know, 12 to 16% IRR with a stable, predictable cash flow. Um, so for that, for us, that’s a home run. Um, we’re also, uh, right now, not, um, in too much of the venture capital business, um, not to say we’ll never get there.

Um, but again, we’re really looking for middle-market stable, uh, operating businesses and, and real estate, um, you know, middle of the fairway stuff and we take on low leverage. So from that perspective, that’s, that’s kind of what we’re, we’re looking for on our qualified opportunity zone. We’ve partnered with, um, Larry Levy and diversified who by the way, is a client and an advisory board member, uh, and Heinz, uh, you know, top-notch developer to build real, uh, trophy properties all over the country, mostly multifamily, um, in opportunities zones. Uh, so those are the kinds of, um, deals, uh, kinds of plays, you know, we’re looking for. So, um, it isn’t to say, we won’t look at something opportunistic, but we’re just not there yet.

Paul Nicolini:

Yeah. Tell us with $11 billion under management, there’s gotta be undoubtedly a lot of ups and downs. How do you manage the

Jack Ablin:

Yeah, so a lot of it is really just, you know, managing the market managing expectations. So, um, so for example, you know, our equity strategy is a, you know, a seven year minimum. So we’ve designed our equity, um, portfolio to have a 90% success rate and making money over a seven year holding period. And if we, and every quarter, we look out seven years based on our new capital market assumptions. And if we cannot assure ourselves of a 90% success rate, because it’s maybe valuation’s too high and we will actually take risk off the table. In fact, we did that in the fourth quarter of 2019. We couldn’t get to that 90% success rate number and re and they actually entered, uh, 2020 with 15 percentage points worth of cash. Um, so that helped us in the March 31 when we ran it and got back to that number.

So that’s how we do it on the growth side. It’s all longterm, you know, and you know, how it works. I mean, if you buy the market today, you have maybe a 50 to 53% chance of making money over a one day holding period, a 60 something percent chance of one year, 70% chance over five years. And, you know, roughly 85, uh, percent over seven years in a diversified equity mix. It’s, it’s over 90%. We do the same thing with our, uh, our income strategy too. We want a 95% success rate in a positive return over a three year holding period. And we’re willing to make those risk adjustments to make sure that happens. So it’s all about delivering on the predictability, trying to harness predictability from what seems like an unpredictable market, especially as you said, you know, as we’ve said from these control freak entrepreneurs who want to know where every dollar is going and where it’s coming from,

JP Maroney:

You gave a, some statistical information there. How much has that been affected? What you’ve probably been talking about for the last 20, 30 years with this statistical, how it might look in 24 hours or a day, you know, versus a week or a month or a year, how much of that has changed over the last three and a half years under the current administration? And how much of that has changed over the last, say five, six months under COVID?

Jack Ablin:

Yeah, so, um, a lot has changed. I mean, I would say as of maybe five years ago that 90% success rate over seven years could have just been achieved by the S and P 500 by itself, um, between five years and last year, uh, we had a diversified, we had to go to more of a, you know, a, uh, an Acquia, a total world portfolio to be able to get that 90% last year, it fell below 90, uh, ACQUITY fell below 90. So we had it now take risk off the table. Um, as of March, uh, it opt back up above 90, we were able to add, you know, guys, I think we could be looking at the end of this month in September, that’s the same statistic we may be, um, prompted to take money off the table again. Uh, I haven’t run the numbers yet, uh, because, uh, you know, we haven’t calculated it. Um, but I suspect we will be taking some of our risk off the table and our growth strategy. It is September 30th with low interest rates, higher volatility and expected returns. And they’re closer to the basement than the ceiling. Um, it’s a harder and harder hurdle to achieve.

Paul Nicolini:

Did Z election come into play as well?

Jack Ablin:

No, no, because we’re looking seven years. It really doesn’t. Um, the only way would come into consideration is if, you know, by September 30th, the marker was a lot cheaper and everyone’s worried. Um, you know, I will say, um, you know, one of the other things I look at is investor sentiment. Um, we, we track, um, bulls and bears, uh, and right now, uh, on a bullish and bearish, uh, continuum, we’re in the fourth percentile, one of the bottom decile of its historical range. And that’s generally bullish one year, hence, um, when the market, when, when investors are so widespread bearish, um, their expectations are very well and in the market where it’s just, uh, you know, the reality of, uh, or the combination of reality and expectations, but better to have low expectations than high expectations.

Paul Nicolini:

That’s great, Jack. Um, when you’re working with other people on a deal, we know there’s a lot of moving parts and so forth. What are some of the deal breakers for you?

Jack Ablin:

Yeah. I mean, one of the things we do, which is a little bit different than a lot of other, um, you know, private equity deal investors, as we look from the top down. So, you know, what we want to do is figure out where a deal like that would fit, uh, because we have certain parameters we’re looking for. So for example, you know, if we’re looking for income real estate in our diversified income strategy, one is we have to make sure we can get full, you know, full circle back, uh, or at least a fair market value within seven years. Um, secondly it has to pay per an income. Thirdly, it has to possess a volatility, uh, underlying volatility. That’s consistent with the risk parameters. We have an ad strategy. So in many respects, that’s where the deal breaker is going to be. It’s just that the parameters don’t fit.

Um, and the only other thing would be maybe too much leverage. Uh, you know, we want to be able to ride through downturns. We’re willing we were ready to hold forever. Uh, we don’t buy a deal with an expectation of flipping it, uh, you know, over the next, uh, you know, three or five years. And that’s really a huge difference from a lot of private equity fund investing where, you know, because of their economics, as soon as they acquire a deal, the shock clock starts, uh, and the faster they can turn that thing around and flip it out, the better their deal economics are, even if it means, uh, sacrificing a return for their limited partners. So for us, you know, we want to own it the way a family would own a deal. You know, we, we, we try to, we’re trying to do is create a family office environment, and we’re bringing it downscale, uh, to clients, you know, $10 million and even a little bit lower than that.

JP Maroney:

We wrote the wall street, best seller, reading minds and markets. I want to talk a little bit about that in just a moment, but if you’re watching or listening to this episode of the deal flow show, you can get access to our previous episodes archives, as well as subscriber, follow us for future episodes, by going to the deal flow show.com. We have Jack Alvin on from Crescent capital Jack. Um, you wrote this book and we’re all told, or at least advisors are always telling people, don’t try to time the market or maybe read the market or some of them, but you wrote a book that says how to read minds and markets. What does that mean? Sure. So

Jack Ablin:

This was before I really latched onto, um, goals based investing. I was fascinated with this conundrum between the predictability of tranquility, uh, that investors want from their lifestyle. And yet it’s funded by something so volatile and irrational and just, um, you know, obscure. Um, and so I had really spent most of my career trying to harness the uncertainty to deliver predictable results. And so reading minds and markets was a way using macro risk adjustment to essentially take a, a 70, 30 portfolio, but create the same downside risk as a 50 50 portfolio. And so I did that, uh, with a firm that I, that I launched, um, in, uh, mid 1990s, and then sold that to Harris bank in 2000 and then came on board as their chief investment officer at Harris bank BMO, uh, from 2001 to 2017, before then I latched on to this new goals based investing, uh, that delivers really that, uh, combination of, of, um, you know, diversification and holding period to deliver those predictable.

JP Maroney:

Have you found, this is kind of a sidebar question, but you wrote a book you’re obviously a recognized authority in the media. Have you found that the book opened doors or opportunities led to opportunities that you may not have had otherwise I heard a great quote the other day. I don’t know if you’ve ever heard this quote, but it says if you’re not at the table, you’re on the menu. And I think that my opinion is that a book being an authority can get you to certain deal tables that you may not have had access to before. How has that worked for you?

Jack Ablin:

I think, um, no, I think what it’s done is it’s offered a little credibility, um, that, you know, I can, I can, uh, you know, put my, um, you know, thinking down where my mouth is. Um, and, uh, you know, so I think I’ve, I’ve still had to get myself to the table, but I think having this book and also having, I was on the, uh, faculty, I was in the finance department at Boston university school of management. Um, so having an academic backward ground gives me a little credibility, uh, once I’m at the table, but I’m not sure it’s created opportunities where they wouldn’t have existed without, without that

Paul Nicolini:

Jack we’ve had a lot of great guests like yourself on the show. What kind of people would you like to connect with from our audience and our, our viewers and our also our guests?

Jack Ablin:

Sure. I mean, I would say our ideal client is a, you know, uh, an entrepreneur, uh, someone that understands business has appreciates what it takes to actually build their business and grow a private business and in the risks and all the sacrifices, uh, involved with, um, you know, with that business, uh, and, um, you know, talk to us, um, you know, I think you’ll find that we’re all, I mean, I even, you know, like I said, I, my, I have had, uh, started businesses myself and I think that allowed me to really see, um, the world through the eyes of many of our clients. So, um, I would say reach out to us and connect because, uh, we have a full ecosystem of really brilliant entrepreneurs. And they’re very excited about doing

JP Maroney:

What is the best way for someone to get in touch with you or Cresa is it the website email? 

Jack Ablin:

Yeah, I would say let’s, you know, I would suggest start with, um, going to Crescent capital.com and, um, and you can reach out to us through that website. Um, if you’d like to send me an email, you’re welcome to do that at, uh, J Ablin J a, B L I n@crescentcapital.com, but, you know, the, the, the, uh, the website’s great too. So either way it would be fine

Paul Nicolini:

To catch you off guard, but we asked this to, to all our guests share with us something that otherwise the business community wouldn’t know about.

Jack Ablin:

Uh, I wrote a golf book also. Um, so, um, back before I had kids, I saw I had another entrepreneurial endeavor, um, back when I was living in Boston. Uh, and, uh, before I had kids, I partnered with a friend, uh, and we wrote a guide to golf in new England. It’s called the new England golf guide. And, uh, we loved it. Uh, it was a great way to be involved in the golf business. Uh, and we’ve, I’ve met a ton of fun people from that. Uh, got to go to the, uh, the PGA show in Orlando. Um, it was, it was just fun engaging with, uh, uh, the golf world through, you know, kind of a business lens.

JP Maroney:

Fantastic. That’s great. That’s great. Jack Alvin crest at capital. Thanks for coming on the show. Once again, on behalf of my colleague here, mr. Paul Nicoline, myself, JP Maroney, the team at Harbor city and the deal flow show. We really appreciate you coming on and look forward to seeing what comes from this. As I had mentioned before, we are going to be publishing a book called deal makers, deal breakers, and sharing a lot of the wisdom that we draw from the show. And we certainly would love to include quotes and information from that, reach out to jack@crescentcapital.com. And we’ll see you on another episode, very soon of the deal flow show. If you want to get access to more episodes, you can go to deal the deal flow show dot, take care, everybody

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Jack Ablin – The Deal Flow Show - October 8, 2020 Reply

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