Episode 103
Private Equity Spotlight: Dan Ryan on Turning Challenges into Smart Strategies
In this engaging episode of the Karma School of Business podcast, Sean Mooney sits down with Dan Ryan, Managing Director at MidOcean Partners, to discuss his journey in private equity, the evolving dynamics of the industry, and how MidOcean is staying ahead in a competitive market. From life-saving lessons to building critical business functions during challenging times, Dan shares invaluable insights about overcoming adversity, nurturing relationships, and leveraging data to create impactful results. Whether you're a private equity professional or a business leader, this episode offers inspiration and tactics you can apply in your career.
Episode Highlights
2:00 – Dan Ryan’s journey from investment banking to private equity and how his time at Georgetown and Division 1 soccer influenced his leadership approach.
8:00 – The life-saving story of a steak dinner gone wrong and how it echoes lessons of trust and collaboration in high-stakes situations.
14:00 – Building MidOcean’s business development function during the pandemic and utilizing data as a competitive advantage.
27:00 – How MidOcean is adapting to industry changes by integrating structured equity, leveraging AI, and forming strategic JVs like their initiative with Kroger.
38:00 – The importance of cybersecurity in private equity-backed companies and actionable advice for protecting businesses.
39:00 – Practical life hacks: From generative AI for daily use to a surprising life-saving maneuver for choking incidents.
For more information on MidOcean Partners, go to https://www.midoceanpartners.com/
For more information on Dan Ryan, go to https://www.linkedin.com/in/dan-ryan-3324512/
Episode Highlights
2:00 – Dan Ryan’s journey from investment banking to private equity and how his time at Georgetown and Division 1 soccer influenced his leadership approach.
8:00 – The life-saving story of a steak dinner gone wrong and how it echoes lessons of trust and collaboration in high-stakes situations.
14:00 – Building MidOcean’s business development function during the pandemic and utilizing data as a competitive advantage.
27:00 – How MidOcean is adapting to industry changes by integrating structured equity, leveraging AI, and forming strategic JVs like their initiative with Kroger.
38:00 – The importance of cybersecurity in private equity-backed companies and actionable advice for protecting businesses.
39:00 – Practical life hacks: From generative AI for daily use to a surprising life-saving maneuver for choking incidents.
For more information on MidOcean Partners, go to https://www.midoceanpartners.com/
For more information on Dan Ryan, go to https://www.linkedin.com/in/dan-ryan-3324512/
EPISODE TRANSCRIPT
[00:00:00] Sean Mooney: Welcome to the Karma School of Business, a podcast about the private equity industry, business best practices, and real time trends. I'm Sean Mooney, BluWave's founder and CEO. In this episode, we have an amazing conversation with Dan Ryan, Managing Director with MidOcean Partners. Enjoy.
[00:00:34] I'm super excited to be here with my longtime friend and fellow Hoya, Dan Ryan. Dan, thanks for joining us.
[00:00:42] Dan Ryan: Great to be here, Sean. Thanks for inviting me.
[00:00:44] Sean Mooney: It was only a matter of time before I could break down Dan's kind of resistance and agree to be on this thing. It's taken a long time, but thankfully we've twisted his arm hard enough that he agreed to join us here today.
[00:00:57] So this will be a fun one.
[00:00:58] Dan Ryan: You guys have had some really interesting and prestigious guests on this podcast, Sean. You built it out really well. It's an honor to be with you here. Oh, thank you. No,
[00:01:07] Sean Mooney: and we truly do appreciate you spending time. One of the things that I love to do on these things is really jump in and get more of the story of you out there I'd love to hear Dan just what's kind of the snapshot you how you kind of came up in the world where you're from How'd you get into private equity this whole kind of gamut there?
[00:01:28] Dan Ryan: Yeah. Yeah happy to share the story Sean so grew up outside of Philadelphia went to the William Penn Charter School for high school a great memories from Penn Charter And then attended a fine institution in Northwest Washington, D. C. You might have some familiarity with it, Sean. Georgetown University, Go Hoyas.
[00:01:49] Went to Georgetown, majored in finance, minored in theology. You don't see too many finance and theology focused graduates, period. But I thought it was a really interesting place as the oldest Catholic institution in the country. To learn a little bit about all religions, not just Catholicism, but focus was on finance.
[00:02:11] And I did the investment banking tour of duty after Georgetown five years there. And as a banker primarily focused in the middle market, I got exposure to operators and leaders of these businesses. And it was just so interesting to me to see how much value and wealth ultimately could be created.
[00:02:35] Through strong leadership, through building alignment with a team, through effectively advocating for your vision with your key stakeholders, there was this growing ecosystem of private capital investors, right? In private equity and private credit, I said, I want to be in the boardroom. I want to be working alongside these operators.
[00:02:58] I'd grown to really respect and made the move over to Milestone Partners in 2008. And so joined Milestone in August of 2008, following month Lehman collapsed. We had some chaos on our hands to sort through for the next several years, which was a really interesting learning experience for me, for sure.
[00:03:22] We'll talk about it, but you really do learn a lot through dealing with adversity and through challenges. I stayed at milestone for about 12 years after a year or so in my role as an execution professional, I was actually asked to help build and run their business development function at milestone, which was focused on origination, primarily also managing lenders and capital markets.
[00:03:48] And that was when I started to kind of find my lane in the world of private equity, the opportunity to make meaningful investments in relationships with sources of investment opportunities with operators, with capital providers, competitors, other private equity firms. To me, I found that to be extremely fulfilling, extremely rewarding.
[00:04:11] And when you can do it over a long period of time and Have those relationships that you can use to help your firm win and find opportunities where everyone wins, honestly, became something that I found to be very enjoyable. And so I've gone deep into business development. I've been in this capacity since 2009 and I also in my background in finance, statistics and data.
[00:04:39] Has really informed the way that I manage business development, right? So it's investing in the right relationships on the one hand and helping MidOcean position itself in the market and get an edge and play to win. But it's backing that up with real data that we see. So much information come across our desks in terms of actual deal flow.
[00:05:01] There's more transparency in our market. We've built this data warehouse over the course of the last five years at MidOcean that we really do use to help get better, to help drive business intelligence. And so it's the perfect role for me personally, being able to get to know other players in the market, build relationships, but then also the quantitative side of the job to help us do it at scale and do it efficiently.
[00:05:27] Ultimately, we'll leverage AI in the very early innings of that right now and just rolling out co pilot. But that's my story. I think that brings you up to present day here, Sean.
[00:05:37] Sean Mooney: Yeah. And I love the background. And then also I'd add, you played sports in college as well, right?
[00:05:42] Dan Ryan: I did. Yeah. I walked onto the soccer team at Georgetown.
[00:05:46] Tremendous experience. Some lifelong friends came out of that. And a lot of folks that are active in the capital markets, in mid market M& A that were old teammates or captains. My team, right. So didn't make it initially, and I had to walk on middle of my freshman year. So I take a lot of pride in that.
[00:06:05] Sean Mooney: It's amazing how many people that I know who have been really successful in business and life and then in private equity have had that college kind of sports experience. I'm curious, just even from your vantage, what did that give you in terms of like when you first started off your career? Like what was the edge?
[00:06:22] Because. For someone who probably had to play on the fifth court in Yates, which is for those who are familiar, Georgetown is the bad court.
[00:06:33] I've always been envious of those who had coordination.
[00:06:36] Dan Ryan: Honestly, we have a saying at MidOcean, which is doing the work works. And was where I saw people really get rewarded for putting in extra time. It is all consuming when you're playing at a division one level or any collegiate sport, I'm sure. And it requires a real commitment to the program, commitment to the division of the team.
[00:07:01] And it was a lesson that I learned really early on and it continues to pay off for me today. Also the lasting relationships that come out of this. And I think soccer people. It's called soccer, the beautiful game. I believe it is. I think it's the best team sport out there. When you have 11 people on a side working together in fluid motion to try to accomplish your goal.
[00:07:26] And I think the bonds, the friendships, the relationships that come out of that last a very long time. And there are some parallels to what we do in middle market M and A that I see all the time.
[00:07:40] Sean Mooney: It's a great point. It goes to the old proverb. You might go faster alone, but you go further together, and people who play team sports get that more than anyone.
[00:07:49] Hey, as a quick interlude, this is Sean here. I wanted to address one quick question that we regularly get. We often get people who show up at our website, call our account executives and say, Hey, I'm not private equity. Can I still use BluWave to get connected with resources? And the short answer is yes, even though we're mostly and largely used by hundreds of private equity firms, thousands of their portfolio company leaders.
[00:08:12] Every day we get calls from every day top proactive business leaders at public companies, independent companies, family companies. So absolutely you can use this as well. If you want to use the exact same resources that are trusted and being deployed and perfectly calibrated for your business needs, give us a call.
[00:08:30] Visit our website at BluWave. net. Thanks. Back to the episode.
[00:08:38] And so, as we kind of progress here in our conversation, the other kind of question I love to ask people is kind of the tidbit of trivia question, and asking people, we'd know you better if, Dan, we knew this about you. What's maybe one of those things?
[00:08:52] Dan Ryan: Yeah, so, folks that know me, you know this, Sean, I'm generally considered to be an optimist, but one of the things that people may not know is three of my favorite books growing up did not end well.
[00:09:04] Oh, really? They did not have happy endings. And so one of them is the sun also rises Hemingway. Where he never gets the girl, right? Another one is The Natural, and if you've read the book, Bernard Malamud's The Natural. Very different ending than the Robert Redford. I've not read the book. Okay. Oh,
[00:09:27] Sean Mooney: man. It's one of my favorite sports movies of all time.
[00:09:29] Dan Ryan: I won't spoil it for your listeners. Very different ending, which I think is really cool. I know, heartbreaking if you grew up with the movie, but like, it's real life. And then the other one was just a poem that I was just intrigued by as a youngster and that was Casey at the Bat. And you know the ending there where the mighty Casey strikes out.
[00:09:51] I think that there's multiple kind of common themes through each of these stories. Despite the failure in the end, there's hope, there's persistence. There's sports in all three of them, and there's beauty in the journey. I think I've heard you say, Sean, that life is about the journey, not the destination.
[00:10:13] And ultimately, we're working for a positive outcome in the end, but life is full of setbacks. Life is full of failures, right? And when we come to terms with that, we can use those as opportunities to grow and get stronger. And I think that's where. The optimism comes from that adversity will come. It's how you deal with it.
[00:10:39] Sean Mooney: I love that. It's one of those kind of life maxims. The world is not up and to the right, right? It's a series of ups and downs. And if you're doing it right, you're going to be above the line more than below. But just knowing that, and maybe that jives well to your earlier point about sports, right? It's just like hard.
[00:10:58] When you first probably joined the team at Georgetown on their soccer team, that field was probably moving really quickly at first.
[00:11:06] Dan Ryan: It was. And the first go round, it was a failure. Like I was being recruited by the then assistant coach who had left, the new assistant coach brings his big recruits in, guys who are now great friends, and they're like, sorry, there's no spot for you on the roster, you're going to have to walk on, and we're not taking walk ons maybe until the middle of the year, right?
[00:11:26] And so I had to. After a semester of overindulgence, as we all do as you get into college, when I wasn't on the soccer team, I had to get my ass in shape and find a way to get fit so that I could play on that fast moving pitch. And when you do the work and it pays off, it's even more fulfilling.
[00:11:47] Sean Mooney: It's a good topic.
[00:11:48] And I think it's one of the things that, as I kind of reflected on friends, colleagues, people I know in the PE industry, it's an industry filled with smart people. But pound for pound, there's probably smarter people in like these quant hedge funds. It's the combination of like, being smart, but also tenacity and grit.
[00:12:08] And it's these people maybe who are inclined towards kind of like a very high achievement, like collecting ribbons and badges and overcoming things. That'd be an interesting topic to kind of dig down into here, and I'm curious, like, what are maybe some of the other things in life or in business that you've kind of had to deal with, and what were maybe some of your takeaways there?
[00:12:27] Dan Ryan: Yeah, there's one very recent experience in life, which is probably the most scared I've ever been as an adult, was when I almost choked to death at a steak dinner around an ACG event, right? So I'm at one of these networking dinners, and Eating dinner too late. I'm starving. I'm talking while I'm eating. I take too big of a bite and as I'm swallowing it, it got stuck down at the lower end of the esophagus and I tried to flush it down with some water and now I start drowning and I look across the table and A CEO of a biotech company that I just met sees that I'm struggling, and so you need help?
[00:13:08] I was nodding, yeah. He comes over and he starts giving me the Heimlich, and another guy comes running across the room, David Oxley is his name, with Alliance Bernstein, and David's like, hey, you want me to get in here? I grew up as a lifeguard, let me help. And so, These two guys saved my life. I'm convinced holy mackerel that ended really well for me.
[00:13:30] And I'm infinitely grateful for how those guys just jumped up to help. Right. And we used to talk about this at Georgetown, the highest compliment that. You could receive from one of the Jesuits is to be called a man for others. There are real men and women for others out there. And I think those are the people again, and you can relate this to private equity in the middle market.
[00:13:51] Like as our market becomes so competitive, so crowded, people transact with others that they trust and that where they have relationships and where there's empathy, where there's a real connection. And so I think there's more of that in our market today than there was when I got into it. 15, 20 years ago, which is a very positive, very healthy development for our industry.
[00:14:16] Sean Mooney: We all go around this track once. Yeah. And I think too often we get caught just running as fast as we can and looking at the finish line around two or three turns.
[00:14:26] Dan Ryan: Yeah.
[00:14:27] Sean Mooney: I struggle with that every day. It's like, how do you just like live in the moment? This has been a crazy last four or five years here.
[00:14:36] Anything else that's kind of occurred Just even in the context of business, that maybe the stakes aren't nearly as high, but just the opportunity or maybe the advice to overcome something that can otherwise be daunting.
[00:14:49] Dan Ryan: Definitely multiple examples. The one that jumps out for me in terms of workplace adversity was when I joined MidOcean Partners and my first day was February 28th, 2020, after 12 years at Milestone.
[00:15:04] My first day at Milestone was August of 2008. The next time I'm paying for jobs, I'll let you know so you can short the market, hopefully never again. But no, so first day and then you get 10 days in the office and it's kind of chaotic and I'm on the only guy on the Amtrak going in and out of Penn Station and then immediate chaos.
[00:15:24] Right? So. Here I am the new MD hired to build a business development function for the first time ever at MidOcean, which is a 15 year old buyout fund with a tremendous track record and a great brand in the market. There's no playbook for that. And so for me, I'm generally an over communicator as it is.
[00:15:49] I made sure that I was on zooms and on the phone with my partners every day. And then when I wasn't on the phone with their zooms with my internal colleagues, I was communicating with all of my relationships in the outside world to understand where the market's going, constantly reporting back. To my colleagues, I think the folks at MidOcean saw that this was a muscle that they never had before and that in a time of uncertainty, unprecedented uncertainty was actually pretty valuable in terms of helping the firm react to change in the market, to where is the deal flow coming from, how do we finance the next platform investment when everyone's on a global lockdown with the pandemic.
[00:16:35] So. It allowed me to put to work that Rolodex, the relationships I'd built up over the prior 12 years, really, and bring them to bear for the benefit of MidOcean, which was great. And then at the same time, because DealFlow really did go quiet for a few months, it gave me the opportunity to build the foundation of the data platform that we've been investing in since then.
[00:17:02] We leverage multiple different technology resources here. We are building a real data warehouse and we really do use it to drive business intelligence. And if I didn't have that time to work with folks in the back office at MidOcean to work with our representatives at these various software platforms, And we're just kind of doing this on the fly.
[00:17:25] It may not have been built in a way that can scale the way we need it to, as we roll out co pilot and really try to use AI to help better sort through this data, better extract value and ultimately help us win. So it was a really important foundational period for building that part of the business.
[00:17:45] Still got a long way to go, right? It's not perfect, but I think managing through that. Otherwise, very difficult period of uncertainty was able to find a way to push the firm forward.
[00:18:01] Commercial: Today's episode is brought to you by BluWave. Building a business is hard. Top third parties can help you create value with speed and certainty, but it's difficult to know who's best.
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[00:18:22] Sean Mooney: I love that. And Dan, as you're kind of sharing these stories, it just had me thinking about One of the things that I think is a great mindset that anyone can have that's pretty pervasive in P. E. and the professionals therein is this, as you mentioned, kind of this taking on moments of challenge or crisis and then reframing them through the lens of opportunity.
[00:18:44] You think about that time, it was crazy, in terms of, no one had been, it was like 1918 the last time one of these things happened, and starting a new firm, with a new function, and a new role, there's a couple things you could do, you could say, okay, well, I'm going to sit on my hands. Or you could say, no, I'm gonna, I'm gonna figure out the lay of the land.
[00:19:06] I'm going to just have a bias towards action. I'm going to call people. I'm going to use this as a time to reset. And as I look at just the industry in general, like, there's been a lot of positive that came out of COVID, right? One, the industry is, we both know so well, and for those of you who aren't or weren't in it at that time.
[00:19:26] P. E. was not exactly the most communicative world, at least, you know, I think most, a lot of people I'd say. It's like really hard charging, moving quickly, you don't have time and you're just constantly spinning plates. And then the other thing was that there wasn't so much of a time to build the basics because you're constantly working a hundred hours a week and you're in triage.
[00:19:46] And so what came out of this awful crisis, as you describe it, really relates to me in that you were able to take this to make something better. You rose to the opportunity and reframed it, and probably in some ways, I'm guessing you and your firm are better off for this kind of tough thing because it caused you to do all these things you never probably would have done.
[00:20:08] Dan Ryan: A hundred percent, Sean. Yeah, that's a good way to frame it. It was a seminal moment for MidOcean in a period where the firm had been well ahead of the market up to that point in terms of thesis driven investing, operating partner. Alignment and we, a huge team of operating partners. We still do today.
[00:20:28] We'll talk about it, but really hadn't invested in a meaningful relationships with the outside world. Right? So it gave us the opportunity to kind of reset the dialogue that we had with the investment banking community, with the lending community, with the private equity firms from whom we're buying to whom we're selling and strategic investors.
[00:20:52] And so it really changed the way I think. MidOcean viewed the world for the better. Yeah, it's now a lot more about Where do we have the right connectivity in the market? What relationships do we have, touch points do we have, that can help us get in front of the next platform investment opportunity?
[00:21:12] Sean Mooney: It's interesting, so often, every once in a while, I dare to be reflective, and that's a scary place. You don't want to be inside my head. Quiet moments, you don't want to be around me. Um, but sometimes, I, you know, I'm able to tease kind of insights out, and as I think about COVID, It took us being broken into tiny little digital boxes to make us now infinitely more connected than we were before.
[00:21:35] And as you think about the business of P. E., in the early, early days, it was like everyone had different instruments and they're playing in different rooms and strumming to themselves. And now, it's a symphony of people kind of playing together. And so as you kind of roll forward from that time when you joined in 2020, in this crazy n equals very small number of instances, and you look at today.
[00:22:01] How is MidOcean kind of managing this interplay, this symphony of motion between your deal teams, your business development team, your P. E. operating executives, your port co leadership team, etc.?
[00:22:12] Dan Ryan: Yeah, so it's a really important question, one that every mid market buyout fund struggles with, I know, is how you build cohesion.
[00:22:22] Engagement across every 1 of those areas of functional expertise and particularly with the operating partner teams. Right? And so we have over 25 operating partners on our executive board. They're on the payroll. There are various levels of engagement. Some are daily, some weekly, some more ad hoc, but they're all very important members of the MidOcean extended family.
[00:22:48] Prior to my joining, and that's prior to COVID and all that, really difficult to maintain regular dialogue and engagement. It was really left to the deal teams themselves, it was before my time, I'm sure some were better than others. Keeping their operating teams engaged now, we have most of our executive board members join our weekly meeting, which in the past was just in person.
[00:23:13] We might have had a couple of people join on speaker phone and that was it. And then it was up to the deal teams to report back to their respective operating partners. We now have everyone dial into this via zoom. We have a much more structured. Monday meeting, we have a structured 8 30 AM Wednesday meeting.
[00:23:32] We have a structured 8 30 AM Thursday meeting, which is a lot, but it was a lot more four years ago. It's a really good way to kind of maintain that. Engagement and collaboration with our operating executives, with the business development team, with our deal teams, with leadership of the firm, with the investment committee, right?
[00:23:56] So, in a world that was, you're absolutely right, a little more siloed pre 2020, we're now much more in sync and to go back to the concept of being a part of a team. It's much more fulfilling when you're working with this group of folks that can, again, help the firm manage change and you're all in lockstep.
[00:24:19] Again, not perfect, right? We'll continue to evolve this and continue to improve our communication. It comes down to leadership. We have a very strong head of our executive board in Matt Rebell. We have new initiatives to improve transparency across the firm. We're seeing more of the MidOcean family pulling in the same direction now.
[00:24:42] And that makes us, I think, a powerful force out there.
[00:24:46] Sean Mooney: Yeah, I really appreciate that. And there's a lot of kind of themes that keep coming out of our conversation here. And one is the business of private equity continues to turn into a business and this interplay of motion, this becoming synchronous with each other, all the resources you're bringing.
[00:25:03] That no doubt plays into the current state of the industry, right? Where you're not only making smart investments in companies that are already good, but you're bringing all these resources that are kind of pulling on the oars together to help the portfolio companies become their best self.
[00:25:20] Dan Ryan: Yeah, that's right.
[00:25:21] And I sit on the business development role and a pretty unique spot here is kind of like the connective tissue between a lot of these different groups and on the origination side, having that deep pool of operating partners at our disposal is a powerful weapon, right? We have 8 to 10 active investment themes at any given time.
[00:25:43] Within each of those themes, we've got a priority target list of companies we think we might want to own. For me, it's, I use a couple of different tools. To map out our relationships, there's relationship science. There's LinkedIn sales. Now there's a couple of different tools you could use out there, but to map out where our strongest connectivity is to these companies, very rarely is it a straight cold call coming from MidOcean.
[00:26:07] It's a warm handoff coming through a trusted relationship. That can be a powerful thing for me on the origination side to help get us a leg up on an otherwise very competitive market.
[00:26:18] Sean Mooney: We've talked about a few things here. One is kind of where PE's kind of come from, where it is today, where MidOcean has come from, where it is today.
[00:26:25] And as we all know, there's at least three constants in this world. There's death, taxes, and change.
[00:26:35] You've evaded the first one. Yeah, yeah. So far. Right? There's no getting around the second one. And then the third one is you have to embrace it. So as you think about change. Can you talk a little bit about how you've seen this industry evolve, and really how you and MidOcean are managing through this kind of constantly evolving world and life that we all live in?
[00:26:59] Dan Ryan: Yeah, no doubt about it. One of my favorite quotes is, No man ever crosses the same river twice, because the river has changed, and so has the man. I read it initially in a William Manchester book called Goodbye Darkness, it's a great read. But like it's the Greek philosophy saying, I think it's a hundred percent true.
[00:27:22] It is markets evolving. We're evolving. Our world of private equity investors has grown exponentially since I got into the business 15 years ago, there are more investment banks. It's harder to create differentiation in the market, harder to find true proprietary leads, harder to grow businesses, right?
[00:27:41] And so, it's so important that we evolve with the market and try to stay in front of new risks, new challenges, and obviously capitalize on new opportunities. Opportunity is one of the risks. Is on the cyber front, and there's no doubt there's been a significant increase in cyber events. Recently, we saw a statistic, I think it was last week that cyber events were up 30 percent year over year in the third quarter.
[00:28:08] And the bad actors out there, they know that private equity owned businesses are well capitalized. This is a risk that needs to be addressed. And so I think it's. Becoming increasingly common in our ecosystem, unfortunately, but the good news is we have operating resources that are there that exist to help MidOcean portfolio companies mitigate that risk.
[00:28:34] And so it's taking very early steps to set up the right backup system. To set up the right kind of training and awareness mechanisms across the employee bases and then to deal with the attacks when they come in, which luckily for us has been infrequent, but it is a real challenge in the market and I know our portfolio companies.
[00:28:57] I'm sure they love all of our operating partners, the folks that are there, Eric Gordon, Bob Myers, that are working alongside our management teams to help prevent a cyber attack. Their work is very, very much appreciated by all involved on the capital deployment front. We see continued evolution of the market as well there.
[00:29:18] I mean, as it gets more competitive. Almost saturated with other private equity firms. We see large funds coming down market. We see the independent sponsor community growing. Multiple different structures and strategies, the evolution of the secondaries market and continuation vehicles, right? And so I'm fortunate to be a part of an organization that has been very creative and resourceful over the years in terms of identifying strategies that we can tap into to help drive outsize returns for our investors.
[00:29:54] And so we have our, Flagship equity fund, which is 1. 5 billion. MidOcean also has a credit vehicle that manages around 8 billion. That's been in place since 2009, I believe, but on the equity side of the house, where I sit, you have a flagship fund. We recently launched a structured equity fund, which I think is a real opportunity in middle market among private equity owned businesses that need third party capital for growth, but may not want to take on more debt.
[00:30:26] And so the structured equity solution has some real upside. And we're seeing good activity there. Now we closed our first deal on that strategy earlier this year. We also about a year ago, entered into a JV with Kroger and stood up a new entity, a new fund called M Pearl rock partnered up with Brian Kelly, who had been working within Kroger to create this JV that's a 525 million fund.
[00:30:54] Comprised of MidOcean Kroger, Pearl Rock team, and the data scientists that sit within Kroger. This is true strategic capital with a private equity model, and as we think about value creation, differentiation, developing angles and an edge around opportunities. One of the more impactful strategies I've been a part of at NPERLROD.
[00:31:19] Sean Mooney: I like a lot about what you've said on each of those cases. One on the cyber side, right? We all live that. And that's only going to get worse with AI. The ability to not only send someone a text, but send them a voicemail. And then, you know, ultimately have a conversation in real time. It's really pretty harrowing.
[00:31:41] Through our lens it's pretty fascinating. We work with hundreds of top PE firms, thousands of their portfolio companies, and our Friday at 5 call is the cyber call. Wow, yeah. Like, you're like, ah! To save people a lot of time, the first thing you need to do is call your insurance provider. If you don't have insurance, make sure you have it.
[00:31:59] MidOcean's companies all get this, but if you're not PE backed and you don't know this, call your insurance person first, because they're going to, like, have some words. But it's so important. You get the idea, like, how easy it is
[00:32:11] Dan Ryan: for
[00:32:11] Sean Mooney: And it's a multi layered defense. You gotta have constant training, you gotta have systems, you have to have layers of it, and it's not easy and it's scary.
[00:32:20] So, I appreciate you bringing that. You can never lose vigilance on that. The second thing I really appreciated is, as we talked about, the world is changing, it always does. And if you're not changing at least with it, and hopefully ahead of it, You're going to get left behind. And so I love what y'all are doing in terms of creating these new strategies and bringing capital to places that can benefit from it versus kind of holding on to what the world was.
[00:32:47] And it doesn't mean what the world was isn't still a really good place, but you're bringing it into new areas that can provide fuel to whether it's consumer products or credit or structured equity. The world needs this type of fuel, and if you can define and find unique places to bring it at the risk of sounding pie in the sky, it's really good for our economy, it's good for the entrepreneurs that are receivers of these capitals, good for the people who take this capital, and anything that has to do with bringing good and better food to my Kroger that is literally right across the street from my office is a good thing.
[00:33:20] Dan Ryan: Yeah, that's the idea, that's the idea. And it's a lot of fun from my perspective on where I sit on the business development function, right? It keeps the story fresh. And I think that having a dedicated business development function really does help a buyout firm like MidOcean manage change because there's a constant dialogue with the outside world.
[00:33:42] You can more easily pivot and keep that story fresh and current in key participants minds, right? So I'm talking about sources of new deals and lenders and even competitors and partners out there, right? And there's a lot more PE to PE partnership happening out there. And as the eyes and ears of the firm, I guess, it kind of like a scout to use a one other sports analogy is like what's happening out there, what are the new trends that we should be mindful of and kind of bringing that in and letting the team digest everything and figure out where we want to go next.
[00:34:16] I
[00:34:17] Sean Mooney: love it. No, like what the things you're saying is I metaphorically envision what's going on in MidOcean. It's you're running your PE firm, like a pork coat. You've got sales, you've got marketing, you got data analytics operations. You've got the execution part of it. You've got all the different elements you'd see in your company.
[00:34:34] You're venturing out to JVs and bring it to different places. And so it's really exciting to hear that. And the one that I'm really latching on is your Kroger one, because I'm very food motivated, and so
[00:34:46] Dan Ryan: Imagine how hungry you are after one pipeline review. It's just like, don't do it on an empty stomach.
[00:34:52] Sean Mooney: As someone who was born in Cleveland, Ohio, but grew up in Texas, the only thing I'd implore from your Cincinnati based partners is, please stop putting cinnamon in spaghetti noodles in my chili.
[00:35:06] Dan Ryan: I don't think the program has any control over this. I find it chilling. If they
[00:35:10] Sean Mooney: have any sway, I might ask a favor if there's
[00:35:15] Dan Ryan: I share your sentiment.
[00:35:17] Sean Mooney: All right, so this is a cultural and geographic thing that I'm fighting here. I know you know some people there. Maybe you can sway some of the neighbors.
[00:35:24] I'll see what I can do. We'll
[00:35:25] Dan Ryan: get them hooked into the podcast. All
[00:35:29] Sean Mooney: right. So let's bring it full circle here. As you know, and as we all know, like a lot of our friends in this world and industry, try to have little either life hacks or little like tricks or processes even to make our lives a little bit easier, a little bit better, because you leave very complicated lives.
[00:35:49] I was wondering if you have one to kind of add to the mix that I can seamlessly adopt in Frankenstein.
[00:35:55] Dan Ryan: Yeah, and I've listened to a lot of your old podcast, Sean. There are some really interesting life hacks out there that people have shared. I don't know if this will stand up to the standard that's been set.
[00:36:06] I did learn during the choking incident, if you were listening earlier in the podcast, that one way to get a piece of food dislodged that's lower in your esophagus is by drinking fluid, preferably carbonated fluid, and jumping up and down.
[00:36:24] Sean Mooney: Really? Really?
[00:36:25] Dan Ryan: Never knew this existed. You hear all about the Heimlich, you hear all about CPR growing up.
[00:36:30] When I went to the emergency room that night, my two kind of guardian angels walked me to the Jefferson hospital emergency room, and it was really wild. So the piece of steak is still lodged. The water had gotten out so I could breathe. Now I just couldn't swallow. ER doc comes in with a can of ginger ale.
[00:36:50] He says, I want you to drink about a third of this and while you're swallowing it. Jump up and down and it expanded everything in my esophagus. and flush the piece of steak down into my stomach.
[00:37:02] Sean Mooney: Holy mackerel.
[00:37:03] Dan Ryan: The greatest feeling of, like, relief I've ever had in my life.
[00:37:07] Sean Mooney: So after the Heimlich, you still had it lodged.
[00:37:10] It just was open enough that you could breathe.
[00:37:13] Dan Ryan: The Heimlich was successful in pumping out all the water that I had drank to try to flush it down, but I was just sitting in my chair trying to do it discreetly. And I was drowning in the water. That was what was happening in the restaurant. So the water gotten into the trachea and I was drowning.
[00:37:27] It's terrible. So if you're going to drink some fluid to flush it down, just drink a little bit. But after this experience, I went to see my general doctor. I went to see the gastroenterologist. I had to get an endoscopy and both times they said, Oh yeah, you did the jumping up and down trick. I've had to do that before themselves.
[00:37:47] Sean Mooney: That is literally a life hack.
[00:37:48] Dan Ryan: It is?
[00:37:49] Sean Mooney: Yes. I had never heard that.
[00:37:52] Dan Ryan: But it doesn't work if it's lodged up top. If it's lodged and blocking your trachea, which a lot of the situations that require the Heimlich are is when it's lodged up here, but up higher. When it's down low below your trachea, then you could just drink something, jump, flush it.
[00:38:08] Sean Mooney: That is amazing news. I wish I'd known that before. Even you think about things with kids. And ourselves as we're kind of out and about
[00:38:16] Dan Ryan: the fact that these two doctors knew that it was a thing and we had never been told this like I think they need to kind of rewrite the training books where we learn CPR and the Heimlich but no one talks about this maneuver.
[00:38:28] Sean Mooney: Yeah, this is news we can all use the real life. It's a great life hack.
[00:38:33] Dan Ryan: The other one is the I'm sure someone else has shared it. I use generative AI every day. Chat GPT. And I actually now use it to help with my kids homework. They've got like the algebra and the calculus. I did all this. And these were my favorite courses all through high school.
[00:38:51] I retained. And so, a quick search in ChatGBT, I'm back in there. We've had some good, fun homework sessions using AI.
[00:39:00] Sean Mooney: AI is amazing. I keep the ChatGBT app on my phone. I use it every single day.
[00:39:06] Dan Ryan: Every day. I use it for all of my searches now. I don't even go into Google anymore. Christmas gift ideas, music playlist ideas,
[00:39:15] Sean Mooney: yeah.
[00:39:16] I just used it to, this was being recorded in the holiday season, and I was looking for this very popular chef's knife for my wife. And I couldn't find it anywhere and I had it look at all the stores and find where it was in stock and it worked. I
[00:39:30] Dan Ryan: was like, this
[00:39:32] Sean Mooney: is
[00:39:32] Dan Ryan: great and you can do it without being overwhelmed with ads and sponsorships, right?
[00:39:38] And not yet, it'll happen eventually, but for now it's a really good unvarnished scrape of all that information out there.
[00:39:47] Sean Mooney: And had I only wished, you know, my kids, they well surpassed my ability to support things. But had I known if I had checked dbt there where I could kind of like have a shelf life on helping the kids past algebra one It would be that would be amazing the the facade of my understanding how the world works Well scraped off at this point, but yeah for those of you with younger kids You're gonna be able to seem smarter to your kids a lot longer.
[00:40:14] Dan Ryan: Oh, it's so true. Yeah, it's so true When we were starting up in banking, this was like 2003 4, Google was really exploding then. And we used to call Google our senior banker. If you didn't know the answer to a question about some market research you were doing or some comp set, it would be like, just go ask your senior banker.
[00:40:37] Oh yeah, that's right. We've got Google. We can just type that in.
[00:40:40] Sean Mooney: It's a good time to be alive. I just encourage all our listeners, like, run towards this stuff. It makes things better and fun, and what I tell my kids, one's going to college next year and the other one is in high school, is like, when you come out of college, you're going to have to perform almost like a 24 or 25 year old did versus the 22 year olds today.
[00:41:02] That's right. And the 25 year olds today, and so if you run towards it, you're going to be infinitely better off. That's great advice. So that's my last piece of soapbox right here. But this has been a really fun conversation, Dan, and I've learned all sorts of things I wish I knew before. And not only about you, but about life and scary moments, like life hacks that are truly life saving.
[00:41:27] Thank you so much for investing your time and sharing your perspective here today.
[00:41:32] Dan Ryan: That was a treat. Really appreciate you having me on here, Sean. Great to see the success that you've had. At BluWave and with the Karma School of Business podcast. Keep up the great work. Happy to see everything you're doing here.
[00:41:45] Take care. Yeah. All right.
[00:41:57] Sean Mooney: That's all we have for today. Special thanks to Dan for joining. If you'd like to learn more about Dan Ryan and MidOcean Partners. Please see the episode notes for links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcast. We truly appreciate your support.
[00:42:13] If you like what you hear, please follow 5 Star Rate, review, and share. This is a free way to support the show and it really helps us when you do this, so if you find value in the show we'd appreciate it. In the meantime, if you want to be connected with the world's best in class, private equity grade, professional service providers, independent consultants, interim executives that are deployed and trusted by the best business builders in the world, including many hundreds of private equity firms, thousands of their portfolio companies and countless other family and publicly owned companies, and you can do the same, give us a call or visit our website at BluWave.net. That's B L U W A V E and we'll support your success. Onward.
[00:00:34] I'm super excited to be here with my longtime friend and fellow Hoya, Dan Ryan. Dan, thanks for joining us.
[00:00:42] Dan Ryan: Great to be here, Sean. Thanks for inviting me.
[00:00:44] Sean Mooney: It was only a matter of time before I could break down Dan's kind of resistance and agree to be on this thing. It's taken a long time, but thankfully we've twisted his arm hard enough that he agreed to join us here today.
[00:00:57] So this will be a fun one.
[00:00:58] Dan Ryan: You guys have had some really interesting and prestigious guests on this podcast, Sean. You built it out really well. It's an honor to be with you here. Oh, thank you. No,
[00:01:07] Sean Mooney: and we truly do appreciate you spending time. One of the things that I love to do on these things is really jump in and get more of the story of you out there I'd love to hear Dan just what's kind of the snapshot you how you kind of came up in the world where you're from How'd you get into private equity this whole kind of gamut there?
[00:01:28] Dan Ryan: Yeah. Yeah happy to share the story Sean so grew up outside of Philadelphia went to the William Penn Charter School for high school a great memories from Penn Charter And then attended a fine institution in Northwest Washington, D. C. You might have some familiarity with it, Sean. Georgetown University, Go Hoyas.
[00:01:49] Went to Georgetown, majored in finance, minored in theology. You don't see too many finance and theology focused graduates, period. But I thought it was a really interesting place as the oldest Catholic institution in the country. To learn a little bit about all religions, not just Catholicism, but focus was on finance.
[00:02:11] And I did the investment banking tour of duty after Georgetown five years there. And as a banker primarily focused in the middle market, I got exposure to operators and leaders of these businesses. And it was just so interesting to me to see how much value and wealth ultimately could be created.
[00:02:35] Through strong leadership, through building alignment with a team, through effectively advocating for your vision with your key stakeholders, there was this growing ecosystem of private capital investors, right? In private equity and private credit, I said, I want to be in the boardroom. I want to be working alongside these operators.
[00:02:58] I'd grown to really respect and made the move over to Milestone Partners in 2008. And so joined Milestone in August of 2008, following month Lehman collapsed. We had some chaos on our hands to sort through for the next several years, which was a really interesting learning experience for me, for sure.
[00:03:22] We'll talk about it, but you really do learn a lot through dealing with adversity and through challenges. I stayed at milestone for about 12 years after a year or so in my role as an execution professional, I was actually asked to help build and run their business development function at milestone, which was focused on origination, primarily also managing lenders and capital markets.
[00:03:48] And that was when I started to kind of find my lane in the world of private equity, the opportunity to make meaningful investments in relationships with sources of investment opportunities with operators, with capital providers, competitors, other private equity firms. To me, I found that to be extremely fulfilling, extremely rewarding.
[00:04:11] And when you can do it over a long period of time and Have those relationships that you can use to help your firm win and find opportunities where everyone wins, honestly, became something that I found to be very enjoyable. And so I've gone deep into business development. I've been in this capacity since 2009 and I also in my background in finance, statistics and data.
[00:04:39] Has really informed the way that I manage business development, right? So it's investing in the right relationships on the one hand and helping MidOcean position itself in the market and get an edge and play to win. But it's backing that up with real data that we see. So much information come across our desks in terms of actual deal flow.
[00:05:01] There's more transparency in our market. We've built this data warehouse over the course of the last five years at MidOcean that we really do use to help get better, to help drive business intelligence. And so it's the perfect role for me personally, being able to get to know other players in the market, build relationships, but then also the quantitative side of the job to help us do it at scale and do it efficiently.
[00:05:27] Ultimately, we'll leverage AI in the very early innings of that right now and just rolling out co pilot. But that's my story. I think that brings you up to present day here, Sean.
[00:05:37] Sean Mooney: Yeah. And I love the background. And then also I'd add, you played sports in college as well, right?
[00:05:42] Dan Ryan: I did. Yeah. I walked onto the soccer team at Georgetown.
[00:05:46] Tremendous experience. Some lifelong friends came out of that. And a lot of folks that are active in the capital markets, in mid market M& A that were old teammates or captains. My team, right. So didn't make it initially, and I had to walk on middle of my freshman year. So I take a lot of pride in that.
[00:06:05] Sean Mooney: It's amazing how many people that I know who have been really successful in business and life and then in private equity have had that college kind of sports experience. I'm curious, just even from your vantage, what did that give you in terms of like when you first started off your career? Like what was the edge?
[00:06:22] Because. For someone who probably had to play on the fifth court in Yates, which is for those who are familiar, Georgetown is the bad court.
[00:06:33] I've always been envious of those who had coordination.
[00:06:36] Dan Ryan: Honestly, we have a saying at MidOcean, which is doing the work works. And was where I saw people really get rewarded for putting in extra time. It is all consuming when you're playing at a division one level or any collegiate sport, I'm sure. And it requires a real commitment to the program, commitment to the division of the team.
[00:07:01] And it was a lesson that I learned really early on and it continues to pay off for me today. Also the lasting relationships that come out of this. And I think soccer people. It's called soccer, the beautiful game. I believe it is. I think it's the best team sport out there. When you have 11 people on a side working together in fluid motion to try to accomplish your goal.
[00:07:26] And I think the bonds, the friendships, the relationships that come out of that last a very long time. And there are some parallels to what we do in middle market M and A that I see all the time.
[00:07:40] Sean Mooney: It's a great point. It goes to the old proverb. You might go faster alone, but you go further together, and people who play team sports get that more than anyone.
[00:07:49] Hey, as a quick interlude, this is Sean here. I wanted to address one quick question that we regularly get. We often get people who show up at our website, call our account executives and say, Hey, I'm not private equity. Can I still use BluWave to get connected with resources? And the short answer is yes, even though we're mostly and largely used by hundreds of private equity firms, thousands of their portfolio company leaders.
[00:08:12] Every day we get calls from every day top proactive business leaders at public companies, independent companies, family companies. So absolutely you can use this as well. If you want to use the exact same resources that are trusted and being deployed and perfectly calibrated for your business needs, give us a call.
[00:08:30] Visit our website at BluWave. net. Thanks. Back to the episode.
[00:08:38] And so, as we kind of progress here in our conversation, the other kind of question I love to ask people is kind of the tidbit of trivia question, and asking people, we'd know you better if, Dan, we knew this about you. What's maybe one of those things?
[00:08:52] Dan Ryan: Yeah, so, folks that know me, you know this, Sean, I'm generally considered to be an optimist, but one of the things that people may not know is three of my favorite books growing up did not end well.
[00:09:04] Oh, really? They did not have happy endings. And so one of them is the sun also rises Hemingway. Where he never gets the girl, right? Another one is The Natural, and if you've read the book, Bernard Malamud's The Natural. Very different ending than the Robert Redford. I've not read the book. Okay. Oh,
[00:09:27] Sean Mooney: man. It's one of my favorite sports movies of all time.
[00:09:29] Dan Ryan: I won't spoil it for your listeners. Very different ending, which I think is really cool. I know, heartbreaking if you grew up with the movie, but like, it's real life. And then the other one was just a poem that I was just intrigued by as a youngster and that was Casey at the Bat. And you know the ending there where the mighty Casey strikes out.
[00:09:51] I think that there's multiple kind of common themes through each of these stories. Despite the failure in the end, there's hope, there's persistence. There's sports in all three of them, and there's beauty in the journey. I think I've heard you say, Sean, that life is about the journey, not the destination.
[00:10:13] And ultimately, we're working for a positive outcome in the end, but life is full of setbacks. Life is full of failures, right? And when we come to terms with that, we can use those as opportunities to grow and get stronger. And I think that's where. The optimism comes from that adversity will come. It's how you deal with it.
[00:10:39] Sean Mooney: I love that. It's one of those kind of life maxims. The world is not up and to the right, right? It's a series of ups and downs. And if you're doing it right, you're going to be above the line more than below. But just knowing that, and maybe that jives well to your earlier point about sports, right? It's just like hard.
[00:10:58] When you first probably joined the team at Georgetown on their soccer team, that field was probably moving really quickly at first.
[00:11:06] Dan Ryan: It was. And the first go round, it was a failure. Like I was being recruited by the then assistant coach who had left, the new assistant coach brings his big recruits in, guys who are now great friends, and they're like, sorry, there's no spot for you on the roster, you're going to have to walk on, and we're not taking walk ons maybe until the middle of the year, right?
[00:11:26] And so I had to. After a semester of overindulgence, as we all do as you get into college, when I wasn't on the soccer team, I had to get my ass in shape and find a way to get fit so that I could play on that fast moving pitch. And when you do the work and it pays off, it's even more fulfilling.
[00:11:47] Sean Mooney: It's a good topic.
[00:11:48] And I think it's one of the things that, as I kind of reflected on friends, colleagues, people I know in the PE industry, it's an industry filled with smart people. But pound for pound, there's probably smarter people in like these quant hedge funds. It's the combination of like, being smart, but also tenacity and grit.
[00:12:08] And it's these people maybe who are inclined towards kind of like a very high achievement, like collecting ribbons and badges and overcoming things. That'd be an interesting topic to kind of dig down into here, and I'm curious, like, what are maybe some of the other things in life or in business that you've kind of had to deal with, and what were maybe some of your takeaways there?
[00:12:27] Dan Ryan: Yeah, there's one very recent experience in life, which is probably the most scared I've ever been as an adult, was when I almost choked to death at a steak dinner around an ACG event, right? So I'm at one of these networking dinners, and Eating dinner too late. I'm starving. I'm talking while I'm eating. I take too big of a bite and as I'm swallowing it, it got stuck down at the lower end of the esophagus and I tried to flush it down with some water and now I start drowning and I look across the table and A CEO of a biotech company that I just met sees that I'm struggling, and so you need help?
[00:13:08] I was nodding, yeah. He comes over and he starts giving me the Heimlich, and another guy comes running across the room, David Oxley is his name, with Alliance Bernstein, and David's like, hey, you want me to get in here? I grew up as a lifeguard, let me help. And so, These two guys saved my life. I'm convinced holy mackerel that ended really well for me.
[00:13:30] And I'm infinitely grateful for how those guys just jumped up to help. Right. And we used to talk about this at Georgetown, the highest compliment that. You could receive from one of the Jesuits is to be called a man for others. There are real men and women for others out there. And I think those are the people again, and you can relate this to private equity in the middle market.
[00:13:51] Like as our market becomes so competitive, so crowded, people transact with others that they trust and that where they have relationships and where there's empathy, where there's a real connection. And so I think there's more of that in our market today than there was when I got into it. 15, 20 years ago, which is a very positive, very healthy development for our industry.
[00:14:16] Sean Mooney: We all go around this track once. Yeah. And I think too often we get caught just running as fast as we can and looking at the finish line around two or three turns.
[00:14:26] Dan Ryan: Yeah.
[00:14:27] Sean Mooney: I struggle with that every day. It's like, how do you just like live in the moment? This has been a crazy last four or five years here.
[00:14:36] Anything else that's kind of occurred Just even in the context of business, that maybe the stakes aren't nearly as high, but just the opportunity or maybe the advice to overcome something that can otherwise be daunting.
[00:14:49] Dan Ryan: Definitely multiple examples. The one that jumps out for me in terms of workplace adversity was when I joined MidOcean Partners and my first day was February 28th, 2020, after 12 years at Milestone.
[00:15:04] My first day at Milestone was August of 2008. The next time I'm paying for jobs, I'll let you know so you can short the market, hopefully never again. But no, so first day and then you get 10 days in the office and it's kind of chaotic and I'm on the only guy on the Amtrak going in and out of Penn Station and then immediate chaos.
[00:15:24] Right? So. Here I am the new MD hired to build a business development function for the first time ever at MidOcean, which is a 15 year old buyout fund with a tremendous track record and a great brand in the market. There's no playbook for that. And so for me, I'm generally an over communicator as it is.
[00:15:49] I made sure that I was on zooms and on the phone with my partners every day. And then when I wasn't on the phone with their zooms with my internal colleagues, I was communicating with all of my relationships in the outside world to understand where the market's going, constantly reporting back. To my colleagues, I think the folks at MidOcean saw that this was a muscle that they never had before and that in a time of uncertainty, unprecedented uncertainty was actually pretty valuable in terms of helping the firm react to change in the market, to where is the deal flow coming from, how do we finance the next platform investment when everyone's on a global lockdown with the pandemic.
[00:16:35] So. It allowed me to put to work that Rolodex, the relationships I'd built up over the prior 12 years, really, and bring them to bear for the benefit of MidOcean, which was great. And then at the same time, because DealFlow really did go quiet for a few months, it gave me the opportunity to build the foundation of the data platform that we've been investing in since then.
[00:17:02] We leverage multiple different technology resources here. We are building a real data warehouse and we really do use it to drive business intelligence. And if I didn't have that time to work with folks in the back office at MidOcean to work with our representatives at these various software platforms, And we're just kind of doing this on the fly.
[00:17:25] It may not have been built in a way that can scale the way we need it to, as we roll out co pilot and really try to use AI to help better sort through this data, better extract value and ultimately help us win. So it was a really important foundational period for building that part of the business.
[00:17:45] Still got a long way to go, right? It's not perfect, but I think managing through that. Otherwise, very difficult period of uncertainty was able to find a way to push the firm forward.
[00:18:01] Commercial: Today's episode is brought to you by BluWave. Building a business is hard. Top third parties can help you create value with speed and certainty, but it's difficult to know who's best.
[00:18:10] That's why you need the Business Builders Network. Visit BluWave at BLUWAVE. net to learn more and start a project today.
[00:18:22] Sean Mooney: I love that. And Dan, as you're kind of sharing these stories, it just had me thinking about One of the things that I think is a great mindset that anyone can have that's pretty pervasive in P. E. and the professionals therein is this, as you mentioned, kind of this taking on moments of challenge or crisis and then reframing them through the lens of opportunity.
[00:18:44] You think about that time, it was crazy, in terms of, no one had been, it was like 1918 the last time one of these things happened, and starting a new firm, with a new function, and a new role, there's a couple things you could do, you could say, okay, well, I'm going to sit on my hands. Or you could say, no, I'm gonna, I'm gonna figure out the lay of the land.
[00:19:06] I'm going to just have a bias towards action. I'm going to call people. I'm going to use this as a time to reset. And as I look at just the industry in general, like, there's been a lot of positive that came out of COVID, right? One, the industry is, we both know so well, and for those of you who aren't or weren't in it at that time.
[00:19:26] P. E. was not exactly the most communicative world, at least, you know, I think most, a lot of people I'd say. It's like really hard charging, moving quickly, you don't have time and you're just constantly spinning plates. And then the other thing was that there wasn't so much of a time to build the basics because you're constantly working a hundred hours a week and you're in triage.
[00:19:46] And so what came out of this awful crisis, as you describe it, really relates to me in that you were able to take this to make something better. You rose to the opportunity and reframed it, and probably in some ways, I'm guessing you and your firm are better off for this kind of tough thing because it caused you to do all these things you never probably would have done.
[00:20:08] Dan Ryan: A hundred percent, Sean. Yeah, that's a good way to frame it. It was a seminal moment for MidOcean in a period where the firm had been well ahead of the market up to that point in terms of thesis driven investing, operating partner. Alignment and we, a huge team of operating partners. We still do today.
[00:20:28] We'll talk about it, but really hadn't invested in a meaningful relationships with the outside world. Right? So it gave us the opportunity to kind of reset the dialogue that we had with the investment banking community, with the lending community, with the private equity firms from whom we're buying to whom we're selling and strategic investors.
[00:20:52] And so it really changed the way I think. MidOcean viewed the world for the better. Yeah, it's now a lot more about Where do we have the right connectivity in the market? What relationships do we have, touch points do we have, that can help us get in front of the next platform investment opportunity?
[00:21:12] Sean Mooney: It's interesting, so often, every once in a while, I dare to be reflective, and that's a scary place. You don't want to be inside my head. Quiet moments, you don't want to be around me. Um, but sometimes, I, you know, I'm able to tease kind of insights out, and as I think about COVID, It took us being broken into tiny little digital boxes to make us now infinitely more connected than we were before.
[00:21:35] And as you think about the business of P. E., in the early, early days, it was like everyone had different instruments and they're playing in different rooms and strumming to themselves. And now, it's a symphony of people kind of playing together. And so as you kind of roll forward from that time when you joined in 2020, in this crazy n equals very small number of instances, and you look at today.
[00:22:01] How is MidOcean kind of managing this interplay, this symphony of motion between your deal teams, your business development team, your P. E. operating executives, your port co leadership team, etc.?
[00:22:12] Dan Ryan: Yeah, so it's a really important question, one that every mid market buyout fund struggles with, I know, is how you build cohesion.
[00:22:22] Engagement across every 1 of those areas of functional expertise and particularly with the operating partner teams. Right? And so we have over 25 operating partners on our executive board. They're on the payroll. There are various levels of engagement. Some are daily, some weekly, some more ad hoc, but they're all very important members of the MidOcean extended family.
[00:22:48] Prior to my joining, and that's prior to COVID and all that, really difficult to maintain regular dialogue and engagement. It was really left to the deal teams themselves, it was before my time, I'm sure some were better than others. Keeping their operating teams engaged now, we have most of our executive board members join our weekly meeting, which in the past was just in person.
[00:23:13] We might have had a couple of people join on speaker phone and that was it. And then it was up to the deal teams to report back to their respective operating partners. We now have everyone dial into this via zoom. We have a much more structured. Monday meeting, we have a structured 8 30 AM Wednesday meeting.
[00:23:32] We have a structured 8 30 AM Thursday meeting, which is a lot, but it was a lot more four years ago. It's a really good way to kind of maintain that. Engagement and collaboration with our operating executives, with the business development team, with our deal teams, with leadership of the firm, with the investment committee, right?
[00:23:56] So, in a world that was, you're absolutely right, a little more siloed pre 2020, we're now much more in sync and to go back to the concept of being a part of a team. It's much more fulfilling when you're working with this group of folks that can, again, help the firm manage change and you're all in lockstep.
[00:24:19] Again, not perfect, right? We'll continue to evolve this and continue to improve our communication. It comes down to leadership. We have a very strong head of our executive board in Matt Rebell. We have new initiatives to improve transparency across the firm. We're seeing more of the MidOcean family pulling in the same direction now.
[00:24:42] And that makes us, I think, a powerful force out there.
[00:24:46] Sean Mooney: Yeah, I really appreciate that. And there's a lot of kind of themes that keep coming out of our conversation here. And one is the business of private equity continues to turn into a business and this interplay of motion, this becoming synchronous with each other, all the resources you're bringing.
[00:25:03] That no doubt plays into the current state of the industry, right? Where you're not only making smart investments in companies that are already good, but you're bringing all these resources that are kind of pulling on the oars together to help the portfolio companies become their best self.
[00:25:20] Dan Ryan: Yeah, that's right.
[00:25:21] And I sit on the business development role and a pretty unique spot here is kind of like the connective tissue between a lot of these different groups and on the origination side, having that deep pool of operating partners at our disposal is a powerful weapon, right? We have 8 to 10 active investment themes at any given time.
[00:25:43] Within each of those themes, we've got a priority target list of companies we think we might want to own. For me, it's, I use a couple of different tools. To map out our relationships, there's relationship science. There's LinkedIn sales. Now there's a couple of different tools you could use out there, but to map out where our strongest connectivity is to these companies, very rarely is it a straight cold call coming from MidOcean.
[00:26:07] It's a warm handoff coming through a trusted relationship. That can be a powerful thing for me on the origination side to help get us a leg up on an otherwise very competitive market.
[00:26:18] Sean Mooney: We've talked about a few things here. One is kind of where PE's kind of come from, where it is today, where MidOcean has come from, where it is today.
[00:26:25] And as we all know, there's at least three constants in this world. There's death, taxes, and change.
[00:26:35] You've evaded the first one. Yeah, yeah. So far. Right? There's no getting around the second one. And then the third one is you have to embrace it. So as you think about change. Can you talk a little bit about how you've seen this industry evolve, and really how you and MidOcean are managing through this kind of constantly evolving world and life that we all live in?
[00:26:59] Dan Ryan: Yeah, no doubt about it. One of my favorite quotes is, No man ever crosses the same river twice, because the river has changed, and so has the man. I read it initially in a William Manchester book called Goodbye Darkness, it's a great read. But like it's the Greek philosophy saying, I think it's a hundred percent true.
[00:27:22] It is markets evolving. We're evolving. Our world of private equity investors has grown exponentially since I got into the business 15 years ago, there are more investment banks. It's harder to create differentiation in the market, harder to find true proprietary leads, harder to grow businesses, right?
[00:27:41] And so, it's so important that we evolve with the market and try to stay in front of new risks, new challenges, and obviously capitalize on new opportunities. Opportunity is one of the risks. Is on the cyber front, and there's no doubt there's been a significant increase in cyber events. Recently, we saw a statistic, I think it was last week that cyber events were up 30 percent year over year in the third quarter.
[00:28:08] And the bad actors out there, they know that private equity owned businesses are well capitalized. This is a risk that needs to be addressed. And so I think it's. Becoming increasingly common in our ecosystem, unfortunately, but the good news is we have operating resources that are there that exist to help MidOcean portfolio companies mitigate that risk.
[00:28:34] And so it's taking very early steps to set up the right backup system. To set up the right kind of training and awareness mechanisms across the employee bases and then to deal with the attacks when they come in, which luckily for us has been infrequent, but it is a real challenge in the market and I know our portfolio companies.
[00:28:57] I'm sure they love all of our operating partners, the folks that are there, Eric Gordon, Bob Myers, that are working alongside our management teams to help prevent a cyber attack. Their work is very, very much appreciated by all involved on the capital deployment front. We see continued evolution of the market as well there.
[00:29:18] I mean, as it gets more competitive. Almost saturated with other private equity firms. We see large funds coming down market. We see the independent sponsor community growing. Multiple different structures and strategies, the evolution of the secondaries market and continuation vehicles, right? And so I'm fortunate to be a part of an organization that has been very creative and resourceful over the years in terms of identifying strategies that we can tap into to help drive outsize returns for our investors.
[00:29:54] And so we have our, Flagship equity fund, which is 1. 5 billion. MidOcean also has a credit vehicle that manages around 8 billion. That's been in place since 2009, I believe, but on the equity side of the house, where I sit, you have a flagship fund. We recently launched a structured equity fund, which I think is a real opportunity in middle market among private equity owned businesses that need third party capital for growth, but may not want to take on more debt.
[00:30:26] And so the structured equity solution has some real upside. And we're seeing good activity there. Now we closed our first deal on that strategy earlier this year. We also about a year ago, entered into a JV with Kroger and stood up a new entity, a new fund called M Pearl rock partnered up with Brian Kelly, who had been working within Kroger to create this JV that's a 525 million fund.
[00:30:54] Comprised of MidOcean Kroger, Pearl Rock team, and the data scientists that sit within Kroger. This is true strategic capital with a private equity model, and as we think about value creation, differentiation, developing angles and an edge around opportunities. One of the more impactful strategies I've been a part of at NPERLROD.
[00:31:19] Sean Mooney: I like a lot about what you've said on each of those cases. One on the cyber side, right? We all live that. And that's only going to get worse with AI. The ability to not only send someone a text, but send them a voicemail. And then, you know, ultimately have a conversation in real time. It's really pretty harrowing.
[00:31:41] Through our lens it's pretty fascinating. We work with hundreds of top PE firms, thousands of their portfolio companies, and our Friday at 5 call is the cyber call. Wow, yeah. Like, you're like, ah! To save people a lot of time, the first thing you need to do is call your insurance provider. If you don't have insurance, make sure you have it.
[00:31:59] MidOcean's companies all get this, but if you're not PE backed and you don't know this, call your insurance person first, because they're going to, like, have some words. But it's so important. You get the idea, like, how easy it is
[00:32:11] Dan Ryan: for
[00:32:11] Sean Mooney: And it's a multi layered defense. You gotta have constant training, you gotta have systems, you have to have layers of it, and it's not easy and it's scary.
[00:32:20] So, I appreciate you bringing that. You can never lose vigilance on that. The second thing I really appreciated is, as we talked about, the world is changing, it always does. And if you're not changing at least with it, and hopefully ahead of it, You're going to get left behind. And so I love what y'all are doing in terms of creating these new strategies and bringing capital to places that can benefit from it versus kind of holding on to what the world was.
[00:32:47] And it doesn't mean what the world was isn't still a really good place, but you're bringing it into new areas that can provide fuel to whether it's consumer products or credit or structured equity. The world needs this type of fuel, and if you can define and find unique places to bring it at the risk of sounding pie in the sky, it's really good for our economy, it's good for the entrepreneurs that are receivers of these capitals, good for the people who take this capital, and anything that has to do with bringing good and better food to my Kroger that is literally right across the street from my office is a good thing.
[00:33:20] Dan Ryan: Yeah, that's the idea, that's the idea. And it's a lot of fun from my perspective on where I sit on the business development function, right? It keeps the story fresh. And I think that having a dedicated business development function really does help a buyout firm like MidOcean manage change because there's a constant dialogue with the outside world.
[00:33:42] You can more easily pivot and keep that story fresh and current in key participants minds, right? So I'm talking about sources of new deals and lenders and even competitors and partners out there, right? And there's a lot more PE to PE partnership happening out there. And as the eyes and ears of the firm, I guess, it kind of like a scout to use a one other sports analogy is like what's happening out there, what are the new trends that we should be mindful of and kind of bringing that in and letting the team digest everything and figure out where we want to go next.
[00:34:16] I
[00:34:17] Sean Mooney: love it. No, like what the things you're saying is I metaphorically envision what's going on in MidOcean. It's you're running your PE firm, like a pork coat. You've got sales, you've got marketing, you got data analytics operations. You've got the execution part of it. You've got all the different elements you'd see in your company.
[00:34:34] You're venturing out to JVs and bring it to different places. And so it's really exciting to hear that. And the one that I'm really latching on is your Kroger one, because I'm very food motivated, and so
[00:34:46] Dan Ryan: Imagine how hungry you are after one pipeline review. It's just like, don't do it on an empty stomach.
[00:34:52] Sean Mooney: As someone who was born in Cleveland, Ohio, but grew up in Texas, the only thing I'd implore from your Cincinnati based partners is, please stop putting cinnamon in spaghetti noodles in my chili.
[00:35:06] Dan Ryan: I don't think the program has any control over this. I find it chilling. If they
[00:35:10] Sean Mooney: have any sway, I might ask a favor if there's
[00:35:15] Dan Ryan: I share your sentiment.
[00:35:17] Sean Mooney: All right, so this is a cultural and geographic thing that I'm fighting here. I know you know some people there. Maybe you can sway some of the neighbors.
[00:35:24] I'll see what I can do. We'll
[00:35:25] Dan Ryan: get them hooked into the podcast. All
[00:35:29] Sean Mooney: right. So let's bring it full circle here. As you know, and as we all know, like a lot of our friends in this world and industry, try to have little either life hacks or little like tricks or processes even to make our lives a little bit easier, a little bit better, because you leave very complicated lives.
[00:35:49] I was wondering if you have one to kind of add to the mix that I can seamlessly adopt in Frankenstein.
[00:35:55] Dan Ryan: Yeah, and I've listened to a lot of your old podcast, Sean. There are some really interesting life hacks out there that people have shared. I don't know if this will stand up to the standard that's been set.
[00:36:06] I did learn during the choking incident, if you were listening earlier in the podcast, that one way to get a piece of food dislodged that's lower in your esophagus is by drinking fluid, preferably carbonated fluid, and jumping up and down.
[00:36:24] Sean Mooney: Really? Really?
[00:36:25] Dan Ryan: Never knew this existed. You hear all about the Heimlich, you hear all about CPR growing up.
[00:36:30] When I went to the emergency room that night, my two kind of guardian angels walked me to the Jefferson hospital emergency room, and it was really wild. So the piece of steak is still lodged. The water had gotten out so I could breathe. Now I just couldn't swallow. ER doc comes in with a can of ginger ale.
[00:36:50] He says, I want you to drink about a third of this and while you're swallowing it. Jump up and down and it expanded everything in my esophagus. and flush the piece of steak down into my stomach.
[00:37:02] Sean Mooney: Holy mackerel.
[00:37:03] Dan Ryan: The greatest feeling of, like, relief I've ever had in my life.
[00:37:07] Sean Mooney: So after the Heimlich, you still had it lodged.
[00:37:10] It just was open enough that you could breathe.
[00:37:13] Dan Ryan: The Heimlich was successful in pumping out all the water that I had drank to try to flush it down, but I was just sitting in my chair trying to do it discreetly. And I was drowning in the water. That was what was happening in the restaurant. So the water gotten into the trachea and I was drowning.
[00:37:27] It's terrible. So if you're going to drink some fluid to flush it down, just drink a little bit. But after this experience, I went to see my general doctor. I went to see the gastroenterologist. I had to get an endoscopy and both times they said, Oh yeah, you did the jumping up and down trick. I've had to do that before themselves.
[00:37:47] Sean Mooney: That is literally a life hack.
[00:37:48] Dan Ryan: It is?
[00:37:49] Sean Mooney: Yes. I had never heard that.
[00:37:52] Dan Ryan: But it doesn't work if it's lodged up top. If it's lodged and blocking your trachea, which a lot of the situations that require the Heimlich are is when it's lodged up here, but up higher. When it's down low below your trachea, then you could just drink something, jump, flush it.
[00:38:08] Sean Mooney: That is amazing news. I wish I'd known that before. Even you think about things with kids. And ourselves as we're kind of out and about
[00:38:16] Dan Ryan: the fact that these two doctors knew that it was a thing and we had never been told this like I think they need to kind of rewrite the training books where we learn CPR and the Heimlich but no one talks about this maneuver.
[00:38:28] Sean Mooney: Yeah, this is news we can all use the real life. It's a great life hack.
[00:38:33] Dan Ryan: The other one is the I'm sure someone else has shared it. I use generative AI every day. Chat GPT. And I actually now use it to help with my kids homework. They've got like the algebra and the calculus. I did all this. And these were my favorite courses all through high school.
[00:38:51] I retained. And so, a quick search in ChatGBT, I'm back in there. We've had some good, fun homework sessions using AI.
[00:39:00] Sean Mooney: AI is amazing. I keep the ChatGBT app on my phone. I use it every single day.
[00:39:06] Dan Ryan: Every day. I use it for all of my searches now. I don't even go into Google anymore. Christmas gift ideas, music playlist ideas,
[00:39:15] Sean Mooney: yeah.
[00:39:16] I just used it to, this was being recorded in the holiday season, and I was looking for this very popular chef's knife for my wife. And I couldn't find it anywhere and I had it look at all the stores and find where it was in stock and it worked. I
[00:39:30] Dan Ryan: was like, this
[00:39:32] Sean Mooney: is
[00:39:32] Dan Ryan: great and you can do it without being overwhelmed with ads and sponsorships, right?
[00:39:38] And not yet, it'll happen eventually, but for now it's a really good unvarnished scrape of all that information out there.
[00:39:47] Sean Mooney: And had I only wished, you know, my kids, they well surpassed my ability to support things. But had I known if I had checked dbt there where I could kind of like have a shelf life on helping the kids past algebra one It would be that would be amazing the the facade of my understanding how the world works Well scraped off at this point, but yeah for those of you with younger kids You're gonna be able to seem smarter to your kids a lot longer.
[00:40:14] Dan Ryan: Oh, it's so true. Yeah, it's so true When we were starting up in banking, this was like 2003 4, Google was really exploding then. And we used to call Google our senior banker. If you didn't know the answer to a question about some market research you were doing or some comp set, it would be like, just go ask your senior banker.
[00:40:37] Oh yeah, that's right. We've got Google. We can just type that in.
[00:40:40] Sean Mooney: It's a good time to be alive. I just encourage all our listeners, like, run towards this stuff. It makes things better and fun, and what I tell my kids, one's going to college next year and the other one is in high school, is like, when you come out of college, you're going to have to perform almost like a 24 or 25 year old did versus the 22 year olds today.
[00:41:02] That's right. And the 25 year olds today, and so if you run towards it, you're going to be infinitely better off. That's great advice. So that's my last piece of soapbox right here. But this has been a really fun conversation, Dan, and I've learned all sorts of things I wish I knew before. And not only about you, but about life and scary moments, like life hacks that are truly life saving.
[00:41:27] Thank you so much for investing your time and sharing your perspective here today.
[00:41:32] Dan Ryan: That was a treat. Really appreciate you having me on here, Sean. Great to see the success that you've had. At BluWave and with the Karma School of Business podcast. Keep up the great work. Happy to see everything you're doing here.
[00:41:45] Take care. Yeah. All right.
[00:41:57] Sean Mooney: That's all we have for today. Special thanks to Dan for joining. If you'd like to learn more about Dan Ryan and MidOcean Partners. Please see the episode notes for links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcast. We truly appreciate your support.
[00:42:13] If you like what you hear, please follow 5 Star Rate, review, and share. This is a free way to support the show and it really helps us when you do this, so if you find value in the show we'd appreciate it. In the meantime, if you want to be connected with the world's best in class, private equity grade, professional service providers, independent consultants, interim executives that are deployed and trusted by the best business builders in the world, including many hundreds of private equity firms, thousands of their portfolio companies and countless other family and publicly owned companies, and you can do the same, give us a call or visit our website at BluWave.net. That's B L U W A V E and we'll support your success. Onward.
THE BUSINESS BUILDER’S PODCAST
Private equity insights for and with top business builders, including investors, operators, executives and industry thought leaders. The Karma School of Business Podcast goes behind the scenes of PE, talking about business best practices and real-time industry trends. You'll learn from leading professionals and visionary business executives who will help you take action and enhance your life, whether you’re at a PE firm, a portco or a private or public company.
BluWave Founder & CEO Sean Mooney hosts the Private Equity Karma School of Business Podcast. BluWave is the business builders’ network for private equity grade due diligence and value creation needs.
BluWave Founder & CEO Sean Mooney hosts the Private Equity Karma School of Business Podcast. BluWave is the business builders’ network for private equity grade due diligence and value creation needs.
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