Financial analysts today may argue that investing in smaller businesses comes with great risk. But to Eli Broad College of Business alumnus Vincent Foster (BA Accounting ’78) that risk zone is precisely where his company, Main Street Capital Corporation, successfully operates.
Foster, Main Street Capital’s Chief Executive Officer and Chairman of the Board of Directors, returned to the Broad College as part of the Roy S. Pung Executive Speaker Series.
Main Street Capital, headquartered in Houston, Texas, is a debt and private equity first that invests in lower and middle market (LMM) private companies. This LMM includes companies with pre-tax earnings between $3 million to $20 million U.S. dollars, such as New York Pizza Dept., Yellow Cab, and HopCat, among many others.
In his speaking engagement, Foster stressed the importance of comprehensive due-diligence within the companies Main Street Capital looks to invest. “As more than a financial partner, we help other business owners realize their goals,” said Foster.
Alongside Foster was Dwayne Hyzak, President and Chief Operating Officer of Main Street Capital. Hyzak elaborated on how this company differentiates itself form other investment firms, candidly saying, “we are not experts in any industry, but we are very diversified.” Both speakers prided their firm in serving clients as a one-stop investment shop, discussing how Main Street Capital’s strategies provide full and flexible capital, reduce risks, and expedite closing processes.
“It was a unique experience to talk to someone who is small and medium level capital private equity. Vincent Foster made it feel real and [he] humanized the business so that I was able to see what he goes through on a daily basis,” said Nick Zaggy (MBA’ 17). “He is wildly successful; he has rung the bell on Wall Street. Being a part of Broad College, you see firsthand that there are alums who have gone out there and just dominated in the business world. In 10, 20 years from now, that could be you up there coming back and teaching,” added Zaggy.
Lead by Foster, Main Street Capital has created a niche business that provides big investment ideas while keeping the relationships personal. He showed passion around finding unique companies that other investors may overlook, and continues to find success in doing so. “It’s the story deals, it’s the deep value deals, it’s the really nice business that has to get sold for some reason, but that isn’t trying to gain the system,” said Foster, those are the deals that keep Main Street Capital successful in the lower middle market.