5-Minute Interview with Jamie Shulman, Meriwether Group Capital
Dr. Dorothy Kelso
Managing Director, SuperReturn | Chair of Trustees | Emerging Manager Champion
In this series of 5-minute interviews, I shine the spotlight on up-and-coming fund managers in private markets across the globe. All geographies. All strategies. All sectors.
Here's my conversation with Jamie Shulman, Co-Founder & Fund Manager at Meriwether Group Capital LLC, manager of the Meriwether Group Capital Hero Fund LP (Hero Fund).
Quick facts about Meriwether Group Capital:
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Q: What’s Meriwether Group Capital’s investment strategy?
A:?We are a private lending company focused on supporting lower middle market businesses and their leaders, providing growth capital to help them reach their defining moment.??We supply capital needs outside the criteria of traditional lenders and believe there is a funding gap of entrepreneurial debt across a broad set of industries.
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Q: What is the size of the market opportunity in middle market private lending?
A: The universe of private debt has exceeded $1.3tn in the past year; however, for private lenders focused on commercial loans less than $5m, this is a highly fragmented space with few players. Most commercial mezzanine lenders focus on loans $10m and up.
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Q: How do you approach new loan opportunities??
A: We take a fundamental research approach to potential investments (loans).?Our approach incorporates hands-on engagement and oversight before and during the term of the loan.?Due diligence includes a review of the capital structure and ownership, historical and prospective financial information, analysis of the business and industry, on-site visits, interviews with management, background checks, and other research relating to the company’s management, industry, markets, products and services, and competitors.
We seek borrowers with positive historical cash flow and/or predictable future cash flow, experienced management and established financial sponsor relationships, strong and defensible competitive market positions, and a viable exit strategy.?
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Q: Sounds comprehensive. What’s the team’s history?
A: I have 28 years of private and commercial lending experience, including small business, emerging middle market, and middle market sized companies. We have chosen to work in this space based on the backgrounds of me and my partners, as well as the limited competition in this space and upside opportunity of risk-adjusted returns for investments of this type.
The company is a partnership between me, Seattle-based First Fed Bank, a division of First Northwest Bancorp (Nasdaq: FNWB), and Portland-based Meriwether Group.
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Q: How do you see your business scaling?
A: In 2022, which was our first year, our goal was to scale AUM to $10m by end of year, which we accomplished.?Given a high degree of quality loan demand, we are seeking to continue to grow AUM to $20m by the end of 2024 and $30m by the end of 2025.?We believe this is an appropriate size to provide diversification of credit risk for our investors and is a size that we can manage with the existing team in place.
We have a target return to our investors of 10.0% annually, paid via distributions quarterly, and have met this target every quarter since inception.?We expect to continue to meet this target as the fund grows in size.
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Q: What are the key ingredients of your success?
A: The partnership group has over 75 years combined experience of commercial and investment banking experience, primarily in the Pacific Northwest, which given our connections in the marketplace, provides for a high degree of referrals of quality opportunities.?Our deal flow is then supported by a holistic approach to credit analysis, and an ability to price loans to risk in an underserved space.
Q: What valuable lesson have you learnt that helps drive your approach?
A: Humility.
On the borrower side, we are humbled and proud to work directly with Founders and CEOs, primarily those whose vision we are helping support with working capital debt and acquisition financing.?As founders ourselves, we understand the challenges and opportunities these entrepreneurs are facing and can partner alongside them closely as a result.
On the investor size, it too is very humbling to be entrusted with the assets of our individual, family, and business limited partners.?We take this responsibility very seriously.
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Q: What advice would you like to share with our readers?
A: Spend 100% of your work doing what you love, and it won’t feel at all like work.
CEO of GIG Group; Autobiography #FindingMe soon to be a major motion picture!
1 年Excellent read! Thank you for sharing!
Co-Founder & Fund Manager at Meriwether Group Capital
1 年Thanks Dr. Dorothy Kelso for allowing me to share a little of our Meriwether Group Capital and our Fund. We're excited about our early success and growth trajectory, and feel what we're doing is a win for both our investors, borrowers, and partners. #privatecredit #alternativeinvestments
Your Channel Partner Game remains an enigmatic maze to most, a labyrinth of missed opportunities and misunderstood dynamics. When will You do something about it?
1 年Dr. Dorothy Kelso, I completely agree! Doing work you are passionate about can be incredibly rewarding and it is certainly worth striving for.?