Middle Market Growth Conversations

During the Toronto ACG Capital Connection, Middle Market Growth sat down with Elmer Kim, who has spent more than 25 years working with family offices. He currently serves as chief investment officer for the Hyatt Bangia Family Office. In this episode, Kim describes how he works with families to craft their investment strategy. He also spoke about how the family office model in Canada has evolved and the growing trend of direct investing. For advisers looking to work with family offices, Kim offers his perspective on how to break into the space, and he outlines some of the challenges faced by young investment professionals who work in a family office environment. Visit acg.org to learn more about the family office programs offered by ACG chapters, and check out intergrowth.org for details about the Family Office Summit on the final day of InterGrowth, ACG's annual conference.

Kevin Depew, deputy chief economist and industry eminence program leader for RSM US LLP, spoke with Middle Market Growth about recent trade developments and the underlying issues impacting U.S. economic growth. The U.S. recently agreed to a "phase one" trade deal with China and signed the USMCA with Canada and Mexico to replace the North American Free Trade Agreement. Depew explained what those deals mean for the U.S. economy and midsize businesses in the year ahead. He also addressed challenges beyond trade, including the tight labor market and the reluctance of U.S. businesses to make much-needed productivity-enhancing investments. Uncertainty caused by the trade war and the 2020 U.S. presidential election have made business leaders cautious, a sentiment reflected in RSM's latest Middle Market Business Index, published on Dec. 19. Depew discussed the MMBI's findings and what they reveal about how middle-market leaders are planning for the future. The full index is available at rsmus.com/economics/rsm-middle…ness-index-mmbi.html To read more about trends in the middle market, visit MMG's website, middlemarketgrowth.org.

Jim Owen, a managing director and head of engineering and construction in Stout’s Investment Banking group, recently sat down with Middle Market Growth to discuss industry trends. Owen outlined three primary areas driving interest from buyers in the construction and engineering space: aging infrastructure, demand for resilient construction that can withstand severe weather events, and green initiatives. He described which types of businesses are best positioned to capitalize on these trends, as well as the valuations he's seeing for construction and engineering firms. As we head into 2020, Owen offered his outlook for M&A activity in the industry in the coming year and shared suggestions for how firms can prepare for an economic slowdown. A Q&A with Owen will be featured in the January/February print edition of Middle Market Growth magazine, which ACG members will receive at the end of December. An online version will be available in early January on middlemarketgrowth.org. Read more about Jim on Stout's website: https://www.stout.com/en/professionals/jim-owen/ The Middle Market Growth Conversations podcast is brought to you by the Association for Corporate Growth. To learn more about the organization and how to become a member, visit www.acg.org.

During the Association for Corporate Growth's Strategic Acquirer Summit, Middle Market Growth sat down with two corporate development leads to talk about their roles and how they approach M&A. The first interview explores corporate development in the tech space and features Kate Anissimov, who recently joined Google, having previously worked in corporate development and strategy at Twitter. Anissimov described how she identifies and evaluates technology businesses, and what unique challenges are associated with tech M&A. The second half of the podcast features Peter Troup, vice president of corporate development at Veritiv, a publicly traded B2B distributor of packaging, paper and janitorial and sanitation products, based in Atlanta. Troup described what Veritiv's M&A activity looks like, how the company's deal team is structured, and what competition and disruption look like in its space. Anissimov and Troup both spoke about how they measure success in their deals. To read more about trends in the middle market, visit our website, middlemarketgrowth.org.

Olympic swimmer Ryan Lochte is trying to repair his reputation after two suspensions that cost him valuable sponsorship endorsements and hurt his chances of qualifying for what would be his fifth Olympic games in 2020. To try to fix the damage, the 35-year-old swimmer signed on to CNBC's "Back in the Game," in which former baseball player Alex Rodriguez helps athletes repair their finances and reputations, as he had to do a decade ago following revelations that he used performance-enhancing drugs. Lochte accompanied Rodriguez to ACG's 2019 InterGrowth conference, where Rodriguez was speaking, and sat down with Middle Market Growth for an interview about the show, his swimming career, and how he plans to regain the public's trust. Lochte was suspended from swimming in 2016 during the Rio Olympics, when he claimed he was robbed at gunpoint, which led to accusations that he filed a false police report. He was suspended again in 2018 after he posted a photo of himself taking an IV injection, which the U.S. Anti-Doping Agency prohibits under most circumstances. As a result of the suspensions, Lochte lost his sponsorship endorsements and much of his income. Parts of this interview were included in the episode of "Back in the Game" featuring Lochte, which originally aired on Nov. 13. (https://www.cnbc.com/video/2019/11/07/full-opening-the-first-7-minutes-of-the-ryan-lochte-episode.html)

During the Toronto ACG Capital Connection conference, Middle Market Growth sat down with leaders from two technology-focused growth equity firms. The first interview in this episode features Scottie Wardell, managing partner and co-founder of Integrity Growth Partners, a firm based outside of Los Angeles that invests in software and tech-enabled services businesses. Wardell discussed the role of data analytics in value creation and how her firm leverages data during sourcing and due diligence. The second interview is with Lisa Melchior, founder and managing partner of VERTU Capital, a Toronto-based firm that invests in Canadian technology businesses. Melchior spoke about the tech investing landscape in Canada, why venture-stage companies have had an easier time attracting capital than their late-stage counterparts, and how VERTU works with entrepreneurs to take their businesses to the next level. To read more about trends in the middle market, visit our website, middlemarketgrowth.org.

Kal Beidas, former president and CEO and current board member of Aetna Bearing Company, spoke with Middle Market Growth on the sidelines of the Great Lakes ACG Capital Connection in Detroit to discuss the impact of tariffs on midsize manufacturers and how trade developments are reshaping due diligence. Aetna, a bearing manufacturer based in Livonia, Michigan, is among many U.S. businesses affected by the Trump administration's tariffs on Chinese goods. Beidas described the opportunity costs for companies as they divert resources to customer service, price negotiation with customers and price concessions with suppliers. He also discussed what companies should consider when looking to shift to suppliers outside of China, and he suggested ways to evaluate supply chain exposure when considering an investment. To read more about trends in the middle market, visit our website, middlemarketgrowth.org.

Dug Song is vice president and general manager of Duo Security, which he founded in Ann Arbor, Michigan, in 2010 and sold to Cisco last year for $2.3 billion. He sat down with Middle Market Growth on the sidelines of the Great Lakes ACG Capital Connection in Detroit to talk about the origins of Duo, why he decided to sell it to Cisco, and how the company helped draw venture capital investors to Michigan. "The things that you do while you're small get amplified in hypergrowth," Song said, while speaking onstage at the conference. On the podcast, he elaborated on that comment by describing steps Duo took to build a strong culture early on and as it grew to reach unicorn status, and how he ensured the business could maintain its values post-acquisition. He also weighed in on the state of the information security industry, and how he's seen it evolve over the last decade. For more insights into corporate development and M&A, consider attending ACG's Strategic Acquirer Summit on Nov. 4-5 in Dallas. Designed for corporate professionals, the program will feature speakers from Microsoft, Twitter, Johnson & Johnson, Mark Cuban Companies, and many others. Visit acg.events/sas2019 to learn more. To read more about trends in the middle market, visit our website, middlemarketgrowth.org.

Kevin Depew, RSM's deputy chief economist and industry eminence program leader, spoke with Middle Market Growth about RSM's Q3 U.S. Middle Market Business Index. The index, which slipped to 129.4 from 132.3 in the third quarter, reflected a decline in confidence among middle-market executives from the previous period. Depew notes that although any reading above 100 indicates confidence among business leaders, the latest survey was conducted prior to recent escalations in the trade war with China and so does not reflect uncertainty associated with those developments. With a global slowdown in manufacturing underway, there's the potential for risk to spread to other industries, such as professional services or commercial real estate, Depew says. The Q3 MMBI report includes steps that middle-market companies can take to prepare, and he points to two as being particularly important for surviving the trade war. At the end of the interview, Depew recommends "Capitalism without Capital: The Rise of the Intangible Economy," a book that he's reading as part of the industry analyst program he oversees at RSM. To read the latest RSM US Middle Market Business Index, visit https://rsmus.com/economics/rsm-middle-market-business-index-mmbi.html To read more about trends in the middle market, visit MMG's website, middlemarketgrowth.org.

Andrew McCabe, former acting director of the FBI, spoke with Middle Market Growth about the mounting threats posed to the public and private sectors by state-supported hackers. McCabe chronicles much of his time with the FBI in his new book, "The Threat: How the FBI Protects America in the Age of Terror and Trump." He spent 22 years with the bureau, where he began his career as an agent in the New York field office. He worked high-profile cases, including the 2013 Boston Marathon bombing, the Clinton email investigation and the investigation into Russian interference in the 2016 election. He assumed the role of acting director of the FBI in May 2017. On the podcast, he described his reaction to the findings of the Mueller report and whether he has seen an improvement in security leading up to the next presidential election. He also addressed how cyberattacks against U.S. businesses have evolved in recent years, the impact he expects the trade war with China to have on malign cyber activity targeting American companies, and how the FBI has adapted to increasingly advanced cyber threats. The episode referenced in the intro, featuring Chris Voss, the former lead hostage negotiator for the FBI, is available on the MMG site: https://middlemarketgrowth.org/podcast-former-fbi-lead-hostage-negotiator-chris-voss/ To hear that episode and to read about trends in the middle market, visit middlemarketgrowth.org.