Private Equity Spotlight: Building Future Leaders with Bob Belke

[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 a wonderful conversation with Bob Belke, Managing Partner with Lovell Minick Partners. Enjoy.
I'm very excited to be here today with Bob Belke. Bob, thanks for joining us.

[00:00:43] Bob Belke: Thank you, Sean. It's a pleasure to be here.

[00:00:45] Sean Mooney: I've been really looking forward to this conversation. Bob and I were on a panel together a while back ago, and this was a great opportunity for us to re catch up again. And I think we're in for a very interesting and insightful conversation here.
So Bob, maybe to jump right in, I'd love to get a little bit of the story of you. How did you kind of come up? How did you get into this industry of private equity?

[00:01:06] Bob Belke: Yeah, great question. Thanks, Sean. Look, I would say my journey is probably a little bit unique. Well, one, I've been in the industry a long time, so it's been, Gosh, coming up late, almost 30 years, actually, when I look back.
So, if you look at where this industry was in the mid to late nineties, it wasn't really an industry. it started evolving into an industry, I would say in the late nineties. And so obviously in words of all since then, it's been unbelievable. It's been great to be part of that ride.
I grew up in a small town. I grew up in a very small town in Northern Wisconsin. It was a town of about 1200 people just West of green Bay. And, it was a place where let's just say not a lot of people went to wall street as a farming community of my high school class of, I'm going to say 90 kids.
10 to 15 of us probably went to college. That was a big deal to go to college. And, my parents were both teachers, they valued education. And for whatever reason, I've always sort of been this very driven person. I'm not sure exactly where it came from, but I've always been driven to kind of, I wanted to be successful and one of the sort of Influences that I remember most at that time, this was in 1987.
So I'm 17 years old. The movie Wall Street came out. I don't know if you remember that. Michael Douglas is Gordon Gekko. And this was a cautionary tale of excess and greed. But to me it wasn't really a cautionary tale. I kind of saw that movie and said, Wow, I want to go do that. How do you do that?
Yeah. That's amazing. That was kind of like the first hook for me. Said I, want this life, but I didn't know anything about it. You know, I'm in high school in a small town. I ended up, I went to college at University of Wisconsin. My journey ultimately was really rocky. I didn't really ever actually, if I think about it, never actually really got to Wall Street.
I tried coming out of school to go do M& A on wall street. I tried actually out of ultimately business school to get one of those jobs. And, no one would hire me. I'm not sure why it was a bad interview or whatever, but, so I had kind of a bit of a rocky journey. I graduated from college without a job.
Literally my first job out of college was ultimately to go work for retail brokerage firm. Trying to sell stocks to individuals and, you know, it turned out to actually be more like that. What do they call it? The boiler room of that movie. That kind of operation. That was my first job out of college.
I was really bad at it. I did not last a long time, needless to say. And so fits and starts, but ultimately out of business school, I ended up, I was at TIA Cref. A large pension fund and admittedly, it wasn't really the job that I wanted on school, but it was the job that I got. And when I was there, they started, they were just starting a private equity group within the pension fund to invest.
They had a small group that started to do fund investing and then a group that was going to do direct investing. I raised my hand and pushed to try to do that. And so it was literally me as an associate and two managing directors. None of us had any clue what we were doing. No one had any background.
It was the perfect spot. Right. I mean, I was literally sourcing, executing deals. I was sitting on boards as an associate, just out of business school, built this portfolio of like eight companies in like two years, which was sort of Herculean now, when I look at it back then, it was like, well, you're not investing very much because the pension funds used to investing hundreds of millions of dollars in bond deals.
So that was my first step in. And of course, I pretty quickly realized, wow, one, this is great. I love it. But two, you're really not going to make a lot of money in this industry, probably being on sort of in this particular situation. So that sort of prompted me to go out and sort of find a job with a real GP.
And that's actually the job I'm in today. So I've been with the firm I'm at for coming up on 25 years, actually. And, so that's sort of been my path.

[00:05:13] Sean Mooney: I think it's an amazing story. And you think about, coming from almost about as small as you can get in a small town in Wisconsin and then navigating your way there and it really shows and appeals to me as well as like this whole, I think one of the commonalities in private equity is this kind of tenacity.
Yeah. And you just kept on going and finding a way, finding a way, finding a way, and then you ended up in this industry in a way that you, wanted to as a child.

[00:05:35] Bob Belke: Yeah, look, you get there eventually if you're driven and you're focused and you really know where you want to go right?
It's always the, what you do during the most challenging times that are going to define your life, I think. And I actually had a lot of those my sort of along my journey.

[00:05:49] Sean Mooney: Yeah, it definitely makes sense. And can understand it. I had a similar, but different kind of thing. I grew up in, Austin, Texas, which, in the seventies and eighties, it was a different Austin, Texas than it is today.
I'm sure. Very different. You know, and I ended up going to. School with some, my roommates were from Northern New Jersey. And of course they're all going to New York. And I was like, what is this? And I, I racked up lots and lots and lots of rejections. And then I finally, convinced, a couple of places to, entertain me.
But your way, there was a draw to it from the beginning where I almost feel like I was a passenger in life. Cause I'm like, what are you going to do? To my roommate. So I love that story there. And maybe to, kind of peel back the onion. One layer deeper.
One of the questions, Bob, that I love just asking people is we know you better if we knew this about you. I think we just learned a lot about you. Is there, are there any other kind of tidbits of trivia that you'd like to share?

[00:06:40] Bob Belke: Okay. Yep. I've got one for you that may be not widely known. When I was 14 years old, right?
I was in eighth grade. I won the state of Wisconsin spelling bee. Whoa. Yes. So, I was actually in the National Spelling Bee. Like the one that you see, you know, they have it on like ESPN now. Scripps or something like that. Yeah, it was the Scripps, the Scripps National Spelling Bee. In 1984, in Washington, D. C.
And, there was about 150 people in it then. And I think I finished 21st or 22nd. And I remember the kid sitting next to me actually won the thing. So he got to go on David Letterman. The time, but they didn't televise it at that time. But no, that was something, I don't know at the time, like I actually worked really, really hard to do that.
That was not like a luck thing. That was a. Two years of sort of memorizing words kind of thing to do that. So

[00:07:46] Sean Mooney: that's an amazing accomplishment if it weren't for spell check, I would have the vast majority of the people who know me have a much lower opinion of the things I put on paper.

[00:07:55] Bob Belke: So what's sad now, Sean, is I think I'm actually probably in your shoes,

[00:08:01] Sean Mooney: but I was never in your shoes, so

[00:08:03] Bob Belke: I'm not sure I was actually a really great speller. I just, worked really hard to memorize the dictionary basically.

[00:08:07] Sean Mooney: That's great. Yeah. I always tell people like one of my much less kind of, I don't think I've ever shared this, but I'll share it real quick. So I was every year in high school in a much lower scale, I got the Latin scholar award.
Really? And, but there's a catch. It was one of those things where I was always a little bit miffed that I had to take Latin because I grew up in Texas. Why can I take Spanish? So I'm like, I was like, I'm not going to learn Latin. What I did though, have is a pretty good memory, at least back in high school, it's a very different situation today.
And so the whole period of our progression was translating the Aeneid all four years. Oh god And what I figured out I was really good at doing is I could remember I had an entire chapter of the Aeneid side by side in my head of English and Latin. Wow. And so I had an English Latin translation side by side of the Aeneid.
And so I could just commit a chapter to memory and I would come up with just one. I could do two. And so I would for four years come up with the most elegant translations you can ever imagine. And then eventually our, My teacher made me go to competition where it wasn't on the Aeneid and I just got totally wiped out.
So my fraud was exposed, but I wish I had done something much more productive, like actually learn the language or do a spelling bee.

[00:09:21] Bob Belke: Those things were easier back then. I thought, gets harder as you get older.

[00:09:25] Sean Mooney: Yeah, absolutely. And I still don't know my like conjugations or whatever. All right.
So I love that story. That's a really good one.

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[00:09:55] Sean Mooney: So maybe flipping page, Baba. be curious to get your perspective on how you think about companies and today in PE, you're looking at lots of opportunities in general. It's hard to kind of do a craft project on each one. And so at least when I was in PE, I had this kind of yardstick, like this is what I'm looking for and what the company could, or probably in better ways should be.
One of the, some of the things that you look for that are important to you and by extension, really every CEO should be thinking about as they think about building and growing their companies.

[00:10:28] Bob Belke: Yeah. I mean, maybe for starters, I would say in some ways, yeah, I've been really fortunate in, as I think about the firm that I've now been with 25 years, having gone from this background that I mentioned previously, where I was literally looking at any different industry and randomly making investments with no real strategy or criteria went in the complete opposite direction to a very specialized focus firm.
Um, and 25 years ago, that was very unusual. So, my firm focuses in financial services, business services, financial technology. We know exactly what we do. We know, for the most part, exactly what we're looking for and we know what's a fit and what's not a fit. For us, we sit in this, I'd say lower middle market pocket.
The typical company that we're going to invest in. It's going to look like maybe 10 to 20 million of EBITDA earnings before, you know, interest taxes, and it's going to have probably a couple hundred million enterprise value to start that's sort of the typical profile founder owned and founder driven is not an absolute requirement, but the vast majority of deals that we're going to do we're going to be the first outside institutional capital into a founder run or management run and controlled business we find that. Like, that's the sweet spot for the most value creation opportunity in private equity. And also companies of that profile that I mentioned, there's a lot of them.
They're still under the radar for the most part of a lot of the investment banks and a lot of the heavy processes. That's not to say that, there aren't interested buyers in anything that we're going to do. Of course there are, but it's a wonderful entry point. And, things that we look for, it's the potential, like you talk about operational excellence, for instance, and I know that's frankly firms like yours, Sean, our firms are people that we use and folks that really help us in our investing in our activity with our companies, we don't need companies to be operationally excellent.
When we make our initial acquisition, we don't want turnaround. We don't want to stress. We're not that. We're not those investors, we're growth investors, but I would characterize what we want to do is try to accelerate growth. So, it has to have the makings of a good platform.
It has to have a backable CEO with, The right sort of vision and so the ability to sort of unlock that person to not feel like he's every check that he's writing is out of his own bank account and which constrains growth to be able to unlock that person to build and grow. so the ability to build a help build a platform through add on acquisition is something that we do a lot of.
So it's not an absolute requirement, but I would say for us, that's, it's a lever that we pull more often than not, most companies that we get involved in have not done any M& A previously and then posted the deal with us. We average about five deals. On average, some will be less, some will be more, some will become serial acquirers, that's certainly part of it.
I would also say, we've been in sort of the business long enough where we made acquisitions in most spaces that we want to continue to make acquisitions. So as a specialist investor, you're leading with knowledge. And that's where the world is today in private equity, regardless, you know, if you're not there, you're lost.
It was a big advantage to have grown up there, to have started there throughout. But so most deals that we're going to do today, we've owned either owned companies in the subsector of the subsector we're investing in, or we have the right executives. And we can talk a little bit more about our value creation process and the way that we think about applying resources to companies.
But they're going to be in spaces that we know very, very well.
Yeah.

[00:14:31] Sean Mooney: I really appreciate your perspectives there on a number of fronts. And it's one, this idea that you already know what you want before it shows up at your door and you've made choices to be better at fewer things and what that then is enables you to have this perspective, before a company even shows up, you say, oh, Yeah, this is what we really like.
And then because of that, you can unleash all of this value because it's not your first rodeo per se. Right, right.
And one thing I'd be curious about, Bob, as you think about your management teams, and usually there's a couple of varieties and sometimes it really depends on companies, but sometimes you have an entrepreneur where they're feeling constrained.
And I get it as an entrepreneur too, where you feel the weight of the world on your shoulders. And at some point you have more to lose than to gain when all your capital is, in the ground in this company, it's like with the farmer analogy, I always felt like I was a farmer in private equity.
It's like, I look good on paper, but everything was in the ground. So it's the same way as an entrepreneur. And sometimes you're also bringing in kind of leadership teams to support that. How do you all think about that within, Your organization in terms of kind of coaching up who you have enabling a CEO to go to the board if they want, how do you think about that kind of continuum?

[00:15:44] Bob Belke: Yeah. I would say more often than not the CEO, the person that we back very much fits the profile you just described. It's oftentimes the founder who has built a great business. Yeah. Or maybe it's a second generation, but they've been building a great business for a long period of time.
They're not exiting. And the nice thing about private equity is that sell or self select if they really want to exit, they'll sell to a strategic and they'll get the highest price. If they want to keep going and keep building and keep driving, they'll come to us. It's a wonderful self selection mechanism that occurs naturally.
So it's going to be backing. That individual to put him in the position where, yeah, they don't feel the constraints that we talked about. We're obviously guidance and we're helping to grow and build these businesses, but.
They are going to continue typically through the life of our investment, right? Unless something goes wrong, that's usually what we're looking to do. But where we see the greatest change and where it's the company on the backend of our investment is typically going to look very different from the front end is going to be the team around that individual.
I mean, there are often key people who are drivers and who are going to be drivers throughout and will continue to be even post our investment, but usually all the buckets aren't filled. And sometimes some are filled, but they're not filled in the way that they need to be to build a company from, let's say, 10 million in EBITDA to 50 million in EBITDA, or maybe even more if we're really successful.
That's sort of a different profile. And so we spend a lot of time. Building that out and that evolves throughout the life of the investment. A lot of it tends to happen pretty quickly, frankly.

[00:17:28] Sean Mooney: That's a great point. And as I reflect back on my career and then even thinking about this through the lens of being an operator now.
You feel so constrained. You don't have that fuel. You don't have the ability to do a lot of things that you could for maybe a whole variety of reasons prior to bringing in a partner. And I think it's a great example. If you're a business owner and you're thinking about bringing in private equity capital, what a firm like Bob's and your firm can do.
To kind of free the constraints. And so it's kind of this fuel, you're kind of running on a quarter tank, as an entrepreneur, but suddenly you got the tank filled up and, you know, you can go so much further with safety measure and kind of freeze your, the fear modules in your brain that you can take bigger steps and go a little faster.

[00:18:11] Bob Belke: Yeah, and I would say, in digging down a little bit deeper on that, the things that we have a value creation playbook as part of our process, and there's really five areas that we focus on going into any new investment. And this has been, I'd say a lot of this has been more recent five years ago.
We weren't as advanced as we are now, but the things are go to market strategy, M& A strategy, technology. The finance function and the talent and human capital function. Those are the areas where we're doing an early assessment. We're making a plan and it's Gantt charts, it's timelines. It's what do we want this to look like in, in six months in a year?
And then applying resources to those areas. And the nice thing is, that CEO that we're backing, like they're on board with this, this is part of the plan, right? And so again, there's a bit of a self selection cause if people are scared by these things or, cause change is involved in this.
Then, you want to figure that stuff out earlier rather than.

[00:19:14] Sean Mooney: I appreciate your multifaceted approach. And that was one of the reasons, candidly, why. We do this program of top P innovators where we look at, more than 5, 000 private equity firms. We've got, hundreds of thousands of data points that we're going through.
And we saw the way that you all do it and recognize your firm Lovell Minnick is one of the top, 2 percent in all private equity. And one of the big reasons was because the way that you all approach. Not only making choices before you even start partnering with a company, but then this multifaceted approach that you have.
And so I think you talked about human capital, which makes a ton of sense as much as everyone wants to talk about chat, GPT taken over the world, private equity just seems to be hiring more and more. And our data shows that.
Time and time and time again. And so I appreciate what you said on the human capital side. What about some of the other facets? Where would you kind of dig down into?

[00:20:08] Bob Belke: Technology is a big one. We now have two individuals on our advisory council, solely focused and dedicated to technology. The technology function within our portfolio companies.
We just actually appointed a second one. We made that announcement, I think earlier this week, actually. And because the first individual was just flat out and just, there was so much demand for his expertise across our portfolio. We own about 20 plus companies at any given time.
So that is a key. That is definitely a key area. The finance function is that one very frequently needs a fast development. And so I would say we are always in the market for talent. There and I'd say consistently and any given year, there's going to be a lot of evolution to the finance functions within our firms.
Those are a couple of examples.

[00:21:07] Sean Mooney: think those are great ones. And the finance one is one that we don't really talk about that much on this podcast. And I think we should more because that's the nerve center is the epicenter of every company. It's the aggregator, analyzer and distributor of insights.
And so how do you approach that?

[00:21:22] Bob Belke: You're blind without it. It's not unusual. In fact, it may even be fairly common for us to make the initial investment and just recognize that we're a little bit blind, you know, you got, got it. I mean, we'll obviously we'll bring in our advisors. We'll bring in the people who will get and make sure that we at least understand what we're buying and making sure that we're actually paying the right price for what we're buying.
That's all reliant on the finance element but yeah, you're blind without it and oftentimes companies in the stage where we're making the investment. That's one of the biggest early hurdles that we need to get through. And sometimes that can inhibit what you're able to do right out of the box with an investment, because, ideally you want to just hit the ground running, right?
And you want to be able to go out and do a bunch of acquisitions and you got to get your house in order first in, in many cases, and it starts with that.

[00:22:08] Sean Mooney: I think a hundred thousand percent there. And it's a lot easier to drive through the racetrack. If you can see the turns coming up. So maybe as a transition here, I, A, appreciate all of those aspects.
Cause the name of the game, as you pointed out is in private equities, value creation. And you're doing these things across the spectrum with your portfolio companies, you're providing resources. And that's clearly, I think a reflection of. Getting ahead of not only where the industry came from, but where it's going.
And given that your firm is really one of the more established private equity firms in all of private equity, given the longevity of your P firm how long you've been in the business, Bob, I'm curious to hear what is kind of your perspective on the state of the P industry today?

[00:23:02] Bob Belke: Yeah. Appreciate that.
Actually, let me address the value creation. Topic in terms of where I think that is where the industry is relative to, that topic, because it's been amazing the evolution your firm, exists. I mean, today, because of that, just where the demand. For what you need to do with an investment to get returns these days.
It has changed dramatically. I would say 10 years ago, of course, everyone most firms probably had some advisory council or Um, uh, Group of people that you put in your marketing deck, they sat on some boards. There was no process around that. And it was mostly, frankly, marketing. I think the industry was just at a earlier stage.
You use your networks, you got good deals done. You got good returns because. You're paying a relatively low price is financial engineering, and there was always someone on the back end sort of willing to pay more. And of course, you wanted to improve your, the companies that you're invested in. And yeah, that was part of it, but the process around that and the way you do that, if you're a private equity firm today and you don't have.
That you're behind, if that's not part of your playbook, I think you're behind in five years ago, you weren't behind, today, if you think about where you get returns today, you're not going to get it by buying cheap. There's too much capital and it's gotten too competitive.
It's much more challenging to get it using leverage, given where we are today and the risk return of leverage this type of environment is tricky multiple expansion. I don't think you're going to get it with multiple expansion in the traditional sense, meaning the overall industry just continues to go up from a multiple standpoint.
No, it's come down. It's come down in the last couple of years and I think continuing to come down. So you're having the opposite effect there. It's what you do with the companies when you own them. How fast you can grow, getting the margin expansion, building operationally excellent businesses, taking companies from the size of this, use my firm, 10 million in EBITDA to 50 million in EBITDA.
Okay. You will get multiple expansion from that. Two things, the growth profile of the business has accelerated. You're going to get multiple expansion for that. And you're going to get multiple expansion from being a bigger business effectively. But it's the value creation and the growth. That drives returns and you have to have a playbook a truly legitimate playbook that works to do that.
And I think that the industry is. There are firms that do that very, very well and actually have for quite some time. And then I think there's a lot of firms that still really don't do that as well as they'll need to ultimately, because the industry just, it's as you would expect, it has gotten, it's going to continue to be more competitive.

[00:26:12] Sean Mooney: Yeah. I remember back in the old days. And so I started in the late nineties and PE and, they'd say, what do you specialize in? And we go, we specialize in partnership. Right. And we would say, and we had a picture of it. We had literally a picture of a handshake on our website.
Yeah. No, we're really good, you know, and smart. And that worked for a long time. And then the industry, you know, Became an industry it's, economics one on one occurred. And, as a result, I think everyone upped their game because PE folks there, I always say we're, we were all smart enough.
Pound for pound, maybe the quants at some hedge fund and the steam tunnels were smarter, but we're smart enough. We got people and we were incredibly tenacious. And so we're not going to let, just the weight of econ one on one pull down the, returns through gravity. And so everyone says, okay, we're going to do more.
We'll create more value. And I'd be curious, just your perspective about, cause I think what, what actually evolved. Even through like selfish altruism is this tremendous kind of societal benefit because right now private equity is this huge job creator. It's huge kind of like bringing services and products to places where they didn't exist in part, because it has to, I'm curious what your thoughts are there.

[00:27:29] Bob Belke: Oh, yeah, no, that's where the industry is right now. It scares me a bit to be Frank, because all of a sudden the industry really matters, people talk about, systemic risks and like people, you're hearing more these days, private credit is that, are we creating a systemic risk because of just.
It's no longer the banks, it's private credit. It's a little bit scary because the private equity industry is also a, it can be a little bit of a political hot potato. And that if we ever find ourselves in an environment where things aren't going so well and the returns aren't there, because right now it's hard to refute, right?
The returns from this asset class. Over the past two decades, you really can't refute that. This has been just a tremendous beneficiary for. All of the people who have investments in this space and it's workers, it's public employees, it's like thinking about who our investors are, right?
It trickles through and it's been wonderful, but it's gotten to a stage now where 20 years ago or 25 years ago when I was at TI Cref, they were just starting to invest in that, in this asset class. That was new and that's where all the pension funds were effectively at that point. Now, very large allocations, right?
Most funds are 10, 20 percent plus in private equity and they're now over allocated. So we kind of had this virtuous cycle, right? Of money started to flow in. Firms like ours would make investments, we'd have good returns, more money started to flow in, people saw the returns, it accelerated the capital supply to the industry, and it just went on, which has been phenomenal, right?
And even periods of time like the global financial crisis. Right. That was a very difficult time, but it was pretty short lived, especially for an illiquid asset class. We didn't have to ride through the public market turmoil. I mean, yeah, we had to mark and we had to do those things. We didn't have to sell our companies it only lasted like 18 months. That's where your bottom was. And then it kind of came roaring back. So the industry has never really seen a period of extended challenging times where the capital. Might actually start to flow the other way and that's if I have concerns about the industry. I'm not making the prediction that that's what's going to happen, but I'm concerned that that could happen where we are right now is there's investors are struggling to get money back.
But it's been a tough deal environment. Everybody wants money back and they're over allocated. They're pulling back the capital supply. If that starts to translate into returns and you start to see negative return experience, well, then, you know, are the high net worth investors who are now the future of this asset class?
Are they going to come in as we expect them to come in? Cause that's sort of, what keeps the engine going. It's finding new sources and new pools of capital. Don't know. I think it's going to be really interesting. To watch this play out in the coming years. I think there's a lot of things like there's a lot of portfolio companies that were done in sort of the boom years of 2021 that are going to need to be exited in a few years that supply.
How's that going to play through? 10 years ago, for us. And most of the industry, you sold your companies to strategic acquirers. That's what you did. The idea of selling to another private equity firm was very foreign. 80 percent of our deals back then were sold to strategic acquirers.
It's flipped. Now 80 percent of our exits have been to other private equity firms in the last two funds, or at least current fund. And, that tells you something about what's happened in the industry.

[00:31:08] Sean Mooney: It's an interesting discussion because the private equity industry has become an industry.
It's become more competitive. And what's been fascinating to watch from this perch is to see how you all, even though in the face of like, More challenging economics, how you all are evolving ahead of the pressures that are happening. And so hear what you're saying about the risks, what we get to see from the vantage of, hundreds of P firms that are really excellent.
Yours is that you all still seem to be playing kind of two steps ahead of that pressure and not giving in to, the fundamental gravity of supply and demand. And that, because I think goes to a big kind of thing that we talked about earlier is this like inherent genetically encoded tenacity in grit of the people who go there and the other thing that's been really fascinating to watch is the industry becomes an industry is the development of secondary markets.
I think what private equity industry is the only one where the primary market is substantially larger than the secondary. And you see these other markets kind of evolving, whether it's continuation vehicles or, P firm selling to other P firms or, through a slice of their fund or these, other kind of GP stakes, they're all coming in to kind of give different avenues of liquidity.
That I think will probably serve that next generation or certainly vintage is to come to alleviate that pressure. And so, as I compare the maturation of the P industry versus others, we're still way behind, you know, public markets.

[00:32:36] Bob Belke: Oh, sure. Sure.

[00:32:37] Sean Mooney: But a lot of those tools that those hands have not even been played yet.
So I think the runway still has a long way to go. So long as the industry can still attract the caliber of talent that they have. always would get kind of upset about, the denigration of PE and like with certain kind of legislators because they don't really get it.
And then what I'd say is, it's partly, it's been kind of private equity's fault because the first word in private equity is private and we don't explain how we do things.

[00:33:05] Bob Belke: No, and the industry is doing a better job. I mean, there was never any industry advocacy groups or anything like that to speak what you just said, which is absolutely true.
It's an easy story because it's true. I mean, the job creation has been absolutely phenomenal. Around, I just think of like what we do. I mean, our average company doubles the number of employees from the time that we make the initial investment to when we exit, right? That's a dream that should be, you would hope that would be viewed as a positive thing, but.
It's obviously more complicated than that when you're dealing with, the political element and

[00:33:45] Sean Mooney: I always thought it interesting because I was like, I would have, friends of mine from high school or growing up and they would like, try to read me and call me Bud Fox from. Wall Street.
Well, there you go. That doesn't, I'm like, wait a minute. You know, the vast majority of my industry is small and mid-size businesses, investing in small and mid-size businesses, and I've never been on a Gulf Stream
Most of the time I'm like, me neither. Me neither
Sean, by the way. Yeah.
The last seat of the plane and the worst thing that could ever happen to me was I get upgraded by Avis because I'm in a rental car so much because then I'm going to look like a jerk coming up to the portfolio company and like a fancy car.
So like, it's like, there's a little bit different than the 80s movies that we loved when we were kids. So maybe Bob transition here, one of the things that I really appreciate. Kind of peers, friends, colleagues in the P industry is we're all kind of voracious readers because that's part of how we kind of stay two steps ahead, right?
And why, we always had, it's the same. And I think in a lot of industries, but in P in particular, it's like, don't recreate the wheel. And so I'm curious if there are any books that you've read that, you have some takeaways from, or that kind of had made an impact on how you view the world today.
Yeah, there are a couple. I, yeah, I read a lot as probably most people in our business do. I actually read a lot of fiction, but the, I think the couple I'll give you are, I'd say fit more into the category of, How to live a fulfilling life, kind of, a couple that were just sort of very impactful for me.
They're short reads. I actually just finished not long ago. It's a book called Die With Zero. Have you heard of that one?
I've, it's like the third time I've heard about this book. Oh yeah, has it been on the podcast more than once? No, no, I haven't read it yet. So I apologize in advance to my wife, Kate, because I'm going to be hitting like the single button purchase on Amazon.

[00:35:45] Bob Belke: Yeah. It's an easy read. It's written by a guy named Bill Perkins. Simplistically it's okay. Spend all your money before you die. Okay. I kind of get, the concept there, but it's more than that, right? It's, it kind of turns the, I'm going to save my whole life for a fulfilling retirement, so I get enough money to retire and then live comfortably in my elderly years, that's your life model.
It kind of turns that on its head a little bit. The idea is you should be investing in. Experiences when you're young and you shouldn't be afraid to, if you think about the typical life, you make it most of your money when you're old, when you're older, when you're my age, right? Your fifties is that's your harvesting years.
And that's when you're supposed to be at the peak of your career. And so you have enough money so that when you retire, right, you can then spend your money. And, but the, here's the problem. You don't have your health. You may have your health, but there's limits to how long you're going to have your health.
And frankly, you never know when you're going to die. So, if you sort of back up and you say, no, when you're young, you may not have as much money or as much free time, but look, you have your health. And there are a lot of things that you should be doing. It sort of balances out, you know what, maybe I shouldn't be.
Throwing all my savings into the 401k early, and maybe I should actually be going to do the aggressive mountain climb that I'm not going to be able to do or whatever it is and having the mindset throughout your life of investing in life experiences is kind of like the philosophy. And I thought, and look, I just read it, I'm, you know, 53 and I just read it now, but it struck me as.
Yeah. It's a good way to think about things.

[00:37:25] Sean Mooney: I really, I appreciate that perspective and it kind of resonates on several fronts in a couple of things. My daughter's now 16 and she's going off to college and that's at least for me the first time I thought about, Whoa, we've been in this chapter of our life forever.
And suddenly like both of our kids will be going to college and you're like, my wife's going to be stuck with me now. And so I'm not

[00:37:45] Bob Belke: quite there yet, but I'm very close.

[00:37:47] Sean Mooney: And so we're like, Oh, we gotta do more than trips to Florida and like do some things meaningfully with our kids.
And then in that same vein, I was having a conversation with my brother in law Milford, who's a orthopedic surgeon. And he goes, what are your hobbies? What do you do to have fun? And then I said, I don't have any hobbies. I work and I spend time with family. That's all I have time for.
And he kind of took me aside. He's like, you need to like do things that are more than just work and family. Cause to your point, he goes time and time again, I have patients who wanted to wait. And they wanted to do all these things and they thought they would, climb the mountain or do the sport or learn something and then their bodies just start giving and he was like dead serious and a hundred percent right.
And he's like, I'm going to call you and this was just, not too long ago. So I'm going to call you six months. You better have a hobby. Like, okay, well maybe seven months I'll have a hobby, but we get it. We're all in this hamster wheel where it's just time. Yeah. So I can't wait to read it.

[00:38:47] Bob Belke: Doug, you got to try your best to pull back.
I definitely international. I've done a lot of travel in the last 10 years when I will take time off. and one you can, of course you're connected from everywhere. So, I mean, you can even be connected in a mountain or we are on safari or whatever. There's no time off anymore. That's the way the world is right now.
But on the other hand, it actually allows you to do some of those things that you might not have been able to do so easily. But I find that to be tremendously fulfilling to get into, to immerse yourself into other cultures and to really kind of do your best to live it as opposed to staying at the fancy hotel and eating the American dinner.
Yeah.

[00:39:25] Sean Mooney: A hundred percent. I'm curious, Bob, any other things that you've been reading that you think are also

[00:39:30] Bob Belke: okay. The other, yeah. The other one I'll give you, and I've read this one quite a while ago, the monk who sold his Ferrari. Have you ever heard of that one? No. It's like a, it's like a fable. It's kind of like a fable about how to live a fulfilled life.
And it's, and I know there's a lot of just really interesting things that it's very, things that you can sort of directly do it. You actually can sort of, you finish that book and say, Oh, I can actually do X, Y, and Z. And then a lot of it is around self empowerment, that's sort of.
You have to have that, it's the way you choose to think, right? It's the mindset and the way you choose to think day in and day out. You can sort of think your way to happiness is that, there's a sort of a lot written about that subject. I've always been a big believer in that, that your thoughts ultimately become your life, right?
And I believe that you can do whatever you want to do, whatever you put your mind to, but you need to, it all starts with, you. What's running through your mind every minute of every day.

[00:40:27] Sean Mooney: That's another great point. And it's this idea of positivity, kind of, making your life simpler and letting go of things.
I don't think things have never brought me happiness other than momentarily, so, and the moments are great, but don't get me wrong most of the things that I buy just to be completely candid are junk from Amazon to fulfill a gizmo and gadget kind of fetish that I have.

[00:40:54] Bob Belke: I can see that from your background, by the way, Sean, I see all your gadgets behind you.

[00:41:00] Sean Mooney: So there's that dopamine that hits when there's like a little thing that costs 10 that will hold my iPhone on the plane. I gotta have that. Gotta have that. That's great. Well, Bob, this has been a really fun, amazing, interesting conversation where I learned tons of things I wish I knew before. So thank you so much for sharing.

[00:41:21] Bob Belke: Thank you. Thank you, Sean. I really enjoyed it. Appreciate it. Thank you.

[00:41:28] Sean Mooney: That's all we have for today. Special thanks to Bob for joining. If you'd like to learn more about Bob Belke and Lovell Minnick, please see the episode notes for links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcasts. We truly appreciate your support.
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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.