Ancestor to Several Boutique Banks, Bowles Hollowell Conner Raised The

February 2013 TheMiddleMarket.com

Ancestor to several boutique banks, Bowles Hollowell Conner raised the bar for middle market service Living Legacy Chris Williams and Hiter Harris co-founded Harris Williams & Co.

PLUS 2012 Wrap Up: The Year in Numbers Meet 6 South Atlantic ACG Chapters

Published in Partnership with LIVING LEGACY By Danielle Fugazy

here are certain firms that become a breeding Harris Williams & Co.’s ground for entrepreneurs and consequently new Chris Williams and Hiter Harris firms. When Bowles Hollowell Conner & Co. (known as BHC) opened its doors in 1975, the Tfirm was just that. Firm founders Erskine Bowles (who later became President Bill Clinton’s White House chief of staff), Thomas Hollowell and Charles Conner had the foresight to see that the M&A market was growing — not just with larger deals, but rather the opposite. An increasing number of smaller deals were proliferating, and Wall Street didn’t seem to care much about them. In the mid-1980s, there were only about 25 middle market private equity funds. Today, there are 2,500. BHC seized on the opportunity and created the first boutique investment bank dedicated to the middle market. The firm specialized in advising companies with annual revenue of between $30 million and $500 million and did so with superb service. Looking back, some argue that BHC’s high-level service was better than that of its much larger bulge-bracket brethren. During the process of building a legendary investment bank, the founders hired scores of professionals who had the entrepreneurial itch. Indeed, the founders of BHC had a knack for hiring strong talent. In 1993, Harvard Ancestor to several boutique banks, Business School published a case study about the firm’s Bowles Hollowell Conner raised the bar for recruiting process. The majority of the people that worked middle market service. at the firm realized that BHC focused on its employees, which in turn pushed them to do their best. also innovative. It was based in Charlotte, versus New York, and the founders really focused on the people. “ In the mid-1980s, there were Everyone there was learning,” Harris adds. In 1998, BHC was acquired by First Union, and then only about 25 middle market in 2001 Wachovia bought First Union. In the end, some of BHC’s hires left before the bank was acquired by First Union, private equity funds. and others left after. Many went on to launch successful Today, there are 2,500. ” middle market investment banking firms. Additionally, scores of associates left the firm to go to work at private “The culture at Bowles Hollowell was different,” says equity firms, such as Advent International, the Audax Group, Hiter Harris, co-founder of Harris Williams & Co. and Berkshire Partners, the Carlyle Group LP (Nasdaq: CG) and a former BHC team member. “The words ‘middle’ and Olympus Partners. The following is a look at some of the ‘market’ hadn’t really been put together yet. The firm successful firms spawned by BHC and the legacy the bank emulated some of the best banks in New York, but it was has left behind. Standard Bearer ost professionals who worked at Bowles Hollowell Conner & Co. are quick to say that it was the team spirit that made the pioneering Minvestment bank such a great place to work. Most also agree that it was Erskine Bowles who kept the energy level high and kept young associates aspiring to do their best. “He was such a unique individual. He had a quality about him that could make you feel like you were an important part of his life. He made you feel special,” remembers Chris Williams, a co-founder of Harris Williams & Co. and a former BHC team member. “He was also a tremendous salesman. No one was better than Erskine.” After working at Morgan Stanley in New York, Bowles went back to his home state of North Carolina to launch BHC with Hollowell and Conner. Raised by a father who was involved in politics, it was not surprising when Bowles left the bank to serve in President Bill Clinton’s administration, ultimately as White House chief of staff from 1996 to 1998. Bowles served as president of the University of North Carolina system from 2006 until 2010. Today, Bowles is best known for his work as co-chair, with Senator Alan Simpson, of President Barack Obama’s deficit-reduction commission. As recently as the end of 2011, Bowles was floated as a possible replacement for U.S. Treasury Secretary. However, that didn’t come to pass, and we wait to see what Bowles’ next move will be. Erskine Bowles “The culture at Bowles Hollowell emanated from him,” says Ed Imbrogno, a partner with Fidus Partners. “The other founders complemented it and helped build a firm around it. Erskine set the bar very high.”

Harris Williams & Co. Harris Williams has solidified itself as a go-to firm in the “ Bowles Hollowell saw the value middle market. Co-founders Hiter Harris and Chris Williams both came out of BHC. Friends since Harvard Business in providing services to middle School, Harris and Williams were recruited to BHC in 1987. At the time, there were eight professionals working there. It market companies when not too was the first year the firm had actually recruited in a formal way. The firm had just hired Steve Cummings from Kidder many did at the time.” Peabody to come on as a fourth partner, and he started the associate and analyst programs and the recruiting process. Adds Williams: “Both firms were founded by people who “It was about doing exceptional work, but it was also about were entrepreneurial. It drives our culture as it did theirs. quality of life and family. It was unique,” remembers Williams. These are very important roots. Our experiences there helped Today, Harris and Williams try to run their shop similarly us realize that we wanted to be deep in the middle market. to how BHC operated. The founders focus on hiring the best We saw more money coming into the asset class from the talent and keeping them happy. Since Harris Williams & Co.’s limited partners and recognized the opportunity.” founding in 1991, only a handful of people have left the firm. During the Richmond, Va.-based firm’s early years, What’s more, the firm has now grown to 215 people. Harris Williams worked with what were then considered “Our goal was to serve clients well, hire the best talent and small shops, such as the Riverside Co. and Linsalata Capital. enjoy working together. We took these things to heart and Today, Harris Williams still works with these firms and knew success would come later if we followed these basics,” other private equity firms and major corporations. The firm says Harris. “For Bowles Hollowell and for us, it’s about the completed more than 75 M&A transactions in 2012. people. We don’t have a lot of assets, and our assets go home “We had very humble beginnings. We shared a computer at the end of the day. You have to create something special and office, but the seeds for something great were planted,” to keep people wanting to work hard.” muses Harris.