Chris and Rob Michalik - Twin Tackle of Private Equity at Kinderhook (EP.416)
Nov 11, 2024
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Chris Michalik and Rob Michalik, twin brothers and co-founders of Kinderhook Industries, share their unique journey in private equity, thriving on familial bonds and shared experiences. They delve into their firm's focus on healthcare and environmental services, addressing unwarranted scrutiny of private equity in these sectors. The duo discusses their recent acquisition of Stewardship Medical Group and emphasizes the importance of mutual respect and communication in business partnerships. Personal anecdotes and insights on mentorship add a relatable touch to their professional narrative.
Chris and Rob Michalik attribute their entrepreneurial success to hands-on experiences, highlighting the value of practical knowledge in business operations.
Kinderhook Industries' investment strategy emphasizes three core sectors and prioritizes people-centric approaches to achieve growth and operational improvements.
The recent acquisition of Stewardship Medical Group underscores Kinderhook's commitment to enhancing healthcare delivery in under-resourced communities, countering negative perceptions of private equity.
Deep dives
Background and Roots of Kinderhook Industries
Chris and Rob Mahalik, twin brothers and co-founders of Kinderhook Industries, share the story of their upbringing and early experiences that shaped their professional paths. They began their entrepreneurial journey with a paper route, which taught them important lessons in customer service and business management. Their subsequent work as truck drivers further solidified their understanding of operational dynamics and customer interaction, highlighting the value of hands-on experience over academic internships. This foundation of practical knowledge laid the groundwork for their future success in private equity, emphasizing the importance of understanding people and real-world business operations.
The Growth of Kinderhook and Its Investment Strategy
Kinderhook Industries has grown into a prominent private equity firm with a focus on three core sectors: healthcare services, environmental services, and the automotive aftermarket. The firm's investment philosophy centers around buying undervalued companies, backing strong management teams, and prioritizing growth over financial engineering. Chris and Rob stress that their success is rooted in the belief that investing in people leads to better company outcomes. By cultivating a family-like culture within their team and involving operating partners, they have built a robust investment approach that has yielded significant returns over the years.
Navigating the Challenges in Healthcare Investment
The Mahalik brothers discuss the scrutiny faced by private equity in the healthcare sector and how their firm works to create value in this complex industry. They emphasize that many of the criticisms surrounding private equity often overlook the economics and dynamics of healthcare, where consolidation has been driven by the need for efficiency and access. Their investment strategies in healthcare focus on leveraging technology and improving care delivery through better management and infrastructure. By investing in existing providers and positioning themselves as partners, they aim to enhance the quality of care while adhering to a growth-oriented business model.
Recent Acquisition of Stewardship Medical Group
A significant recent acquisition by Kinderhook was the Stewardship Medical Group, which came to light after the bankruptcy of Steward Healthcare. The Mahalik brothers recognized a unique opportunity to enhance healthcare delivery by acquiring a network of primary care providers serving low-income communities. Their bid was motivated by the belief that they could improve care access and operational efficiency, countering the narrative that private equity is detrimental to healthcare. This acquisition reflects their commitment to investing in under-resourced medical practices and providing the necessary infrastructure to improve patient care.
Future Growth and Strategic Development at Kinderhook
Looking ahead, Chris and Rob underscore the importance of continued growth and strategic development at Kinderhook Industries as they navigate an evolving private equity landscape. They aim to expand their fund size and diversify their investments in various sectors, all while nurturing their team and developing young talent within the firm. The brothers highlight their commitment to maintaining a unique culture and fostering long-term partnerships with their operating partners. By focusing on industry expertise and operational improvements, they believe Kinderhook can sustain its competitive edge and drive long-term success in the market.
Chris and Rob Michalik are twin brothers and co-founders of Kinderhook Industries, a middle-market private equity firm overseeing $8 billion focused on healthcare services, environmental services, and the automotive aftermarket. Chris and Rob joined me on Private Equity Deals to discuss one of their portfolio companies, Ironclad Environmental Services, and that conversation is replayed in the feed. This time around, we discuss their story attached at the hip. We cover their background and path to starting Kinderhook, including rooming together for the first 26 years of their lives. We discuss the firm's family-like culture, three pillars of its investment approach, unwarranted scrutiny of private equity in the healthcare sector, and the recent example of their purchase of Stewardship Medical Group out of the bankrupt Steward Healthcare.