Permanent Equity, with Trish and James Higgins of Chenmark Capital – [Invest Like the Best, EP.28]

My guests this week are Trish and James Higgins, who run Chenmark Capital Management.  In this episode we continue to explore a style of investing I call Permanent Equity.  Returns in permanent equity come first from the ongoing cash flows of portfolio companies, not from reselling businesses down the line.  The partners of Chenmark are pioneering this style of small business investing and share their experience with us thus far.

 

 

Links Referenced

The Bait Shop Concept

Stanford’s Review of Search Fund Activity

Chenmark Capital: Weekly Thoughts

Dare to be Great Essay

 

Books Referenced

Skin in the Game – Nassim Taleb (Coming Soon)

The Zurich Axioms: The rules of risk and reward used by generations of Swiss bankers

 

Show Notes

2:59  – (first question) – Looking at the process that they went through to identify their first company at Chenmark.

 

5:02 – Why the company ended up in Maine

 

5:58 – What was the raw material to first evaluate a business

 

7:50 – Exploring how they priced out that first company and the factors that played into it

 

9:42 – Asked about some of the hiccups of that first acquisition that wound up being things that they enjoyed.

 

11:31 – Looking at the things that were supposed to be difficult that weren’t there

 

14:06 – The balance of maintaining Chenmark’s edge while also looking to grow the portfolio

 

17:12 – Asking about the future vision of the company

 

20:46 – What talent and skillsets from their prior careers have helped them in this field

 

26:00 – When it comes to buying a business, what are the factors that provide them with comfort to going to the next level

 

27:58 – Diving into the rest of the Chenmark portfolio

29:40 – The Bait Shop Concept

 

32:26 – A look at the competition in the search fund market

35:24 – Stanford’s Review of Search Fund Activity

 

39:38 – What are their thoughts about outside investors

 

43:07 – What are their thoughts on fees, as far as what they could charge and what they think about the ones that exist in the rest of the investing world

 

48:40 –  What does it feel like to have skin in the game and to be taking so much risk in the venture personally

48:48 – Skin in the Game – Nassim Taleb (Coming Soon)

49:25 – The Zurich Axioms: The rules of risk and reward used by generations of Swiss bankers

54:03 – Chenmark Capital: Weekly Thoughts

54:22 – Dare to be Great Essay

 

55:21 – Looking at the most memorable day of their careers

 

59:24 – Explore the kindest thing anyone has done for them.

 

Learn More

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub

Follow Patrick on twitter at @patrick_oshag

 

 

FOR ITUNES

For comprehensive show notes on this episode go to http://investorfieldguide.com/chenmark

For more episodes go to InvestorFieldGuide.com/podcast.

Sign up for the book club, where you’ll get a full investor curriculum and then 3-4 suggestions every month at InvestorFieldGuide.com/bookclub

Follow Patrick on twitter at @patrick_oshag