Episode 87 John Ferrara, Capstone Partners

This one is as action-packed and varied in scene as a James Bond movie.  John Ferrara is founder and CEO of Capstone Partners, the middle market investment bank.  John’s story rolls through his upbringing in hardscrabble Brockton, MA to college at liberal arts enclave Wesleyan to an early career stop with Lehman Brothers on Wall Street, to two years of professional baseball in Australia.  Then business school at UCLA, partnership at Arthur Andersen and, in 2002, the founding of Capstone.  John discusses his ambitious early plans for a new investment bank, the buildup of Capstone through a series of acquisitions, and the decision to sell to Huntington Bank in 2022.  John and the hosts wrap up discussing some personal challenges and life philosophy that applies to but transcends the world of finance.   

Transcript

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Andy, it's Charlie Gifford, CEO of Middle Market Musings. How are we today? You are sticking with this CEO thing, not giving it up. Today we just recorded a nice conversation with John Ferrara, president, founder of Capstone Partners, friend of Charlie's, new friend of Andy Greenberg's. What'd you think? I thought it was great. A success in our field, but also a man with a lot of varied interests. And, you know, I, I think, I think people will find it an easy listen. I asked John a question that we haven't asked before. I, I asked John, who was on his personal board of directors, and he gives a nice compact answer that our listeners, listeners will hear. So I was thinking about who's on your personal board. Board of directors, Charlie. Hint, hint. Anyone? No, Nobody on. Nobody on this podcast right now. Mrs. Gifford is the board chair and I try to stay in her good graces. And I'd say I'm successful occasionally, not as frequently as I'd like, but a really fun conversation. I hope our listeners enjoy today's episode with John Ferrara. I think one of the great things about doing the side hustle of ours is that you know, you know people out there, but you really get to know them after having a conversation with them for 45 minutes. So a lot of, a lot to unpack with John. I hope everybody enjoys it. So side hustle to me connotes making a lot of money. Yeah, aren't we making a lot of money? Except for that it has been a great side hustle. But speaking of that, when it comes to maximizing the efficiency of an M and A deal, no one does it better than SRS Acrim. Since 2007, SRS Acrim has brought unmatched expertise, insight and innovation to delivering superior escrow agent, paying agent and professional shareholder representation solutions. 88% of top global private equity firms and 84% of top global venture capital firms have worked with SRS Acium. To learn more about how SRS Ac is the smartest way to run a deal, head to srsaquium.com that's S R S A C Q u I o m.com we hope you enjoy today's episode. John Ferrara, founder and president of Capstone Partners. Welcome to Middle Market Musings. Thank you, Charlie and Andy. Thanks for having me. Proud son of Brockton, Mass. For our listeners that aren't familiar with Brockton, Mass. John set the stage. What was like growing up in Brockton, Mass. In the Ferrara household in the 70s? Well, if you've seen any movie from the 1970s, and 1980s, you can just basically can it as that era in Brockton. It was the heyday of Brockton. It's spectacular backbone to build character. It was a tough time. You know, you had to keep your wits and you keep. Keep your wits. A butt and your head on a swivel. Hometown to Rocky Marciano and Marvin Hagler. Really kind of the. The. The football capital of the Commonwealth of Massachusetts. You probably grow up hating Walpole. Armand Colombo, head coach of that football team. Right. I mean, that was like impressed Armin Colombo. He's a legend. He's in the Bronx hall of Fame. Yeah. But I mean, that was like growing up in Boston in the 70s and 80s, you know, everybody talked about the Brockton boxers and it was like the pinnacle of high school football. Yeah. And that whole town, just a real blue collar town. What was the Ferrara household like? Tell us about your parents and your upbringing. Very modest. Very, very humble. Modest upbringing. My fondest memories are three decker apartment, Italian immigrant family. Father was a mechanic, mother was a waitress, and nobody had been to college. So you got out of Brockton three ways. You fought your way out. You got through education or you got drafted for sports. It was one of those ways. Did they encourage education? Did they encourage athletics? What was important to them? Yeah, my dad was a baseball player and an artist, and my mother was really into books and education. So I got a little bit of blend of all that. You followed their interests in writing and art, right? Yeah, yeah. I think when you're surrounded by that kind of talent, you tend to just show an interest in it early. So. Yeah, I'm an artist still and I write still. And my mother gave me a lifelong passion for education. After Brockton, where did you matriculate? I ended up going to Wesleyan University mainly. I had not heard of Wesleyan, mainly because the coach of the baseball team showed an interest in me and I wanted to play college ball. So that's where I ended up. Not a lot of. I don't think Brockton is a feeder school to the poets of the nescac. Is that safe to assume? That's safe to assume. And I don't know if I did it any justice either. Set the stage for us. Mid 80s, you arrive very different scene. What was it like and what were the greatest areas of culture shock for you? I mean, Andy, I don't think it could have been any opposite. You show up as the kind of the hip, cool athlete guy and you realize what a mug you are. You know, I was the minority there in terms of the liberal versus conservative. Given my background and what I grew up with, the fire and brimstone Roman Catholic experience, I was challenged every day. Every thought, every value was challenged. I haven't heard anything about your upbringing that would suggest investment banking was in your future. How did that get on your. On your radar screen? Yeah, you know, at Wesleyan, the movie Wall. So I graduated in 88, and I think the movie Wall street came out in 87. And as an athlete that had no idea what I wanted to do. It just seemed super challenging. I had no idea about New York. I had no idea about Wall street or business. It's just something about the movie made it seem pretty cool. So whatever. I threw my resume with your father. Did you kind of relate to the whole Martin Sheen. Charlie Sheen, Yeah. Specifically in the elevator when Martin says, I don't measure a man by the size of his wallet and he took his son's head off. I love that scene. And that was like my. That's my dad. A whole cohort of younger listeners just said, great. They fought. Found another old coot to talk to about 80s movies. Yeah, well, keep in mind. Keep in mind too, that I graduated Wesleyan with a degree in religion and philosophy, so ending up on Wall street was not exactly anticipated. So one thing we haven't talked about, I mean, you're really a man of many parts, and we haven't talked about your athletic background in baseball. Where. Where did that come into the story? Raised with a glove in my hand, you know, grew up on ball fields, thank God, before the Internet and before cell phones. You spent your time just down at the park and you played a couple of positions, but mainly a pitcher. Yeah, pitching. Pitching. I guess my claim to fame in pitching is my big nemesis in high school was Tom Glavin. And he and I would go head to head every year for the ERA lead in the Suburban League, which was a highly competitive league. I have a clipping still at home that has Ferrara 0.32 ERA, glavin, like 0.7 something ERA. But who's laughing now? He's in the hall of Fame and I'm running back. So that's. So how fantastic. How. How did you differ from Glavin in approach and mechanics? Oh, God, he was. Oh, man, that's not even a real that. This isn't even a real answer. He was a gifted year God, gifted athlete, a fierce competitor with unlimited skills, and I had limited skills, was not a gifted athlete, and I was a knee breaker hard worker. At some point, we're going to Work our way around to your fascination and involvement with leadership and performance. But one comment from a pitcher that stands out for me in doing what we do. Years ago, hearing Greg Maddox interviewed after a game and, you know, maybe, you know, he gave up a couple of runs was, you know, typical great Maddox performance. And he was asked, well, how do you think he did? He said, I did fine. I executed properly on 52 out of 72 pitches, you know, and it was like, I went seven innings. I gave up that whole run. It was like, I did my job. 52 out of 72 times. He didn't execute. He just moved on. And I would think that. That. It always struck me that that is a very productive way to think about what we do. And I wonder if that. Do you feel like that pitching mindset carried over into early days of being a banker? I think it definitely does. It carries on everything you do. It's a. You know, pitching is a cerebral position, and then you can't do anything after that ball leaves your fingertips, assuming you know where it's going to go, which wasn't always the case with me. It's out of your control. So not dissimilar to tennis, all you can do is control the next pitch. In our business, it's the same thing that sometimes if you executed properly and then you got to watch the ball sail out of the park, and it's like, on to the next one. Yeah. But you have to be super aware of everything. Like, you. You recognize everything the batter is doing while he's on the bench, while he walks up to the plate, where his feet are, where his hand slot is, everything about it. You remember his last pitch. You remember how he reacted. It's like in business, you have to read people in a room. You have to get the pulse of your organization. You have to see the unseen to be able to anticipate what you think the right next pitch is. After you got out of Wesleyan, you went to Lehman. I mean, that must have been a little bit of a culture shock as well, right? I mean, obviously, they had a For poets, and I think a dual degree in religion and philosophy. Can you imagine a kid coming into your office today and be like, yeah, I want to get a job in investment banking. And I don't know anything about it, but I've got this great background of religion and philosophy. It's a different day, man. Charlie, I threw a haymaker. It was the only Wall street firm to give me an offer. That's why I ended up there. That's the Truth. But everybody declined me for that reason. Religion and philosophy. Why should we hire you on Wall Street? Did you take up any accounting or business courses in college? Zero. That's amazing. You picked up the tools of the trade while you were working. Not so easily, no. But Lehman's question, they asked me the same question everybody else did that I got rejected from. So finally I decided to throw a haymaker. I'm like, listen, you can teach a monkey spreadsheets, and you can teach a monkey how to read financial statements. You can't teach people so easily how to think and how to speak. And that's what I'm an expert at. And they said. They said, give the kid a shot. One of the things Andy and I often talk about is the missing art of the written word. I don't know how you feel, if you would agree with that in terms of the younger sect today has a lot of great skills, but it seems as though the written word has fallen by the wayside a bit. Agree or disagree? Strongly agree. Bold, underlying exclamation point. All my kids are also Nescac educated for that reason. So how many years you Lehman for a stint in New York, London and Riyadh. How many years at Lehman? I think it was there about three and a half. Close. Yeah, about that. And when you think back of it, John, if were you to do it again, a good training ground for you. Unbelievable. It was, yeah. A humble experience. And I think being challenged like. Like you said earlier, the culture shock, going into completely strange environment, knowing nothing and all you have is your own toolkit. It was a great experience. My first year at Lehman Brothers, I think we had an analyst class of 40 people, and I was ranked 40th among 40. That's a great. Is that on your LinkedIn page or not? You know, it should be. Trust me, any of my analyst cohorts can validate that. I was absolutely atrocious. They weren't feeling too good about the bet on the religion philosophy guy. How did you gain on the pack? Another loss arc. Just keep your head down, grind away and shut up. Just do your job, John. Baseball came back into your life after leaving Wesleyan. Tell us. Share with us the story about how you ended up playing professional baseball in Australia after your investment banking stint at Lehman. Yeah, well, Lehman had a big part to do with that because it introduced me to international travel. So I got a chance to live for some time in London and in Riyadh, Saudi Arabia, which is a whole nother story. But it opened my purview up to the. To global travel. And I just got called up for one of these Park League playoff games. I hadn't played baseball in four years. And I showed up, my arm was fresh, the ball was coming in big, and I was hitting well, catching well, running well and hitting well. I just had a great post season run. And this big burly Australian guy came up to the keg, come up to me at the keg after the game and was like, hell of a series mate to go to Australia and play baseball. So went in the office that weekend and there was a contract sitting on the fax machine back when faxes were still used from the Australian Baseball league. And so you took them, you said, I'm getting the hell out of Gotham. And you had headed down under. Yeah, I was ready for a break that was probably four or five years into my Wall street experience. And I signed the contract that weekend and walked in on Monday morning and gave my resignation and pack my bags. I imagine a big vote of confidence from your machinist salt of the earth father thought that was a good career move. You know, Andy, I was glad I was not in the same room with that guy when I told him the news because I got into this Godfather conversation about generations of Ferraras have toiled to get you to where you are, and this is irresponsible to the whole family. And I'm like, dad, I got to do this. So, yeah, off I went. He didn't win that argument. How many, how long were you in Australia? I was there for two seasons. Were you really? And was that again, we look back, we're shaped by our experiences. Would you do it? Were you to do it all over again, would you make the same decision? Yeah, because it put me in the public light, which is a whole new set of being an analyst and associate on Wall street doesn't necessarily put you in center stage. When you're one of two recruits in a baseball team, they get you out. Bungee jumping, skydiving, radio, talk shows, television, fundraising events. It was like you're very much in the PR center stage. So that was a great experience. Charlie, what was the public view of you young American guy playing on the team? I'm picturing another 80s classic major league, right, where they all have these well crafted personalities. Another Charlie Sheen classic. What was the popular take on young John Ferreira? Yeah, I'm getting a common theme here from you, Andy. Those two players, international players on those teams, were important spots to fill and part of the expectations that you were bringing the mystic element of baseball to the Australians because they're the mystical, metaphysical, whatever you want to say. But if you're a true baseball purist, there's a lot going on in and around the game that's not just throwing, catching and running. So I think the expectations are that you're going to be knowledgeable about the essence of the game. And you better be a little wacky too, because the Australian people are a boisterous bunch. I want to hear more about that. I mean, outside of just like four corners of being a baseball player, what are like little things that you would do on the field or in how you would carry yourself? Yeah, baseball jokes, baseball humor, practical jokes with each other, setups during the game. Just a lightness, both a depth and a lightness to the game. And by the way, the Australians are spectacular because they grow up playing cricket. They're really, really hard to strike out. They can foul anything off. So, John, two years down under, what next? How did you figure out what your next step is going to be? Yeah, while I was in Australia, I started to panic a little bit because I had a life I needed to get back to. So I applied to business school from Australia. I went to business school at UCLA because it was a number one ranked entrepreneurial program. And Lehman had given me that experience overseas creating an investment banking firm firm in Riyadh, Saudi Arabia. So I landed in Los Angeles, came out working for Deloitte Strategy Group, and then I was hired away by Anderson to come run their corporate restructuring and turnaround group and start a corporate finance practice, their M and A advisory practice. So you were one of the first or was the first outside hire from Anderson to start their corporate finance group? Yeah, I started their Boston corporate finance practice. It gets to be late 90s. You're a partner at Arthur Anderson. Enron happens. Oh, that's. That was terrible. Destroyed so many innocent families and lives and careers. It was brutal. But sitting in the front row of that was quite an experience. We had built. The practice that I built there at Anderson, I think was the fastest growing, most profitable practice for five years in the Anderson franchise. So when Enron hit, it was devastating. So you've got a decision at this point. I'm building a new house. I got three young kids, my daughter's got some lung disease and I've got to make a decision. Do I go find another job or do I just double down and go for broke with everything and start my own firm? So I decided to go for broke and buy the practice I founded out of andersen. That was 2002, when you bought it out of Anderson, were they just like, our house is on fire, take the corporate finance group or was that a difficult negotiation? The partners were great. They wanted to see people. Like the scream was get as many people to high ground as you can. Ships going down, right? Yeah. So the more difficult part was convincing people to come with me because I didn't have funding. You know, we had no clients because everybody with the Enron thing just terminated agreements. So we're literally starting from ground zero. So we had six people that came to start. We basically took the practice out and rebranded it as Capstone and paid Anderson for that. Why did you do that as opposed to just leaving and hanging a shingle? It's a good question. I often think, whether or not that was the right answer. Anderson betrayed me, betrayed my trust in corporate America. So I was the youngest partner nationally. Rose colored glasses, my career was fine and I was untouchable. The fact that something could happen outside of my control, where I have nothing but downside, really, really angered me. So I figured if I was going to have that downside in any company, I'm going to take my own downside because I want to own the upside. So I was comfortable with the risk but didn't have enough of the upside. I want to come back in a minute to what you were thinking, what your ambitions were at that moment. But it might be helpful for our listeners to just race ahead to the end of the story. Today, Capstone, part of Huntington Bank 200 professionals. Maybe just trace the lineage of entities and transactions that resulted in the Capstone complex as it stands today. And then we'll go back to, you know, you sitting there 25 years ago figuring out what kind of business you were going to build. Yeah, I still have the original business plan for that for Capstone when we were trying to raise our seed funding. So we're 25 years into this. We have a 250 person platform with five different offerings and 12 industry groups. We got there through nine acquisitions, nine tuck in acquisitions, two growth equity financings. And I was actually going to market. The way this is how Huntington comes into the picture, I was going into market actually hire an investment banker to take us to the private equity community so I could grow faster and do larger acquisitions. We've gotten really good at it. And then I was introduced to Huntington, had no interest in being acquired, but somehow three weeks later was under an alloy with Huntington and then we've acquired TM Capital. What year was the Huntington deal? 2022 four years ago. Four years ago in June, as a matter of fact. But they convinced me that a strategic buyer that could bring a platform and synergies to the table would be better for me than a private equity partner. And they were absolutely right. I know it's. It's always news to people that Charlie and I prep with the guests, but. Yeah, you made. I thought, you know, it was a fascinating comment in our prep, which is that you had some pretty specific ideas of where the business was going to go, and of course, it's been different than what you imagined, but take us back to that. What. What were your ambitions? What were you thinking about when you got this thing going? Well, it's not like the world needed another middle market investment banking firm in 2002. Right. But I had watched this meteoric rise of a company called Houlihan Loki that was doing valuation work, and they just kept getting bigger and they broadened, and I just looked at them and said, why not? There's room for someone else. Why not us? It might take me a while. I need more capital. Which is why I tried to get funding. And I figured, if you're going to do it, do it to build a market leader. So our initial plan was to build a firm that was a quarter of a billion dollars. Thinking back about the history of Capstone, the two deals that stick out was when you bought the capital strategies business outside of Morgan Stanley, as well as the Headwaters acquisition. Share with us, if you will, the strategy behind both of those acquisitions and what it brought you. Yeah, the deal with Morgan Stanley. We've been pretty close partners with them, and they had a problem they needed fixed. Meaning that group was not part of their diligence. Morgan Stanley, it was the residual group that was at Smith Barney, and it wasn't going to be part of Morgan Stanley moving on. So we made the bid to acquire them. The strategy behind that is brought us industry capabilities we didn't have, and it brought us a national footprint from east coast to west coast and in central US Chicago. So number of bankers before. Before acquisition and after, I think we went from about 18 people to 30. Okay. And then Headwaters a year or so later. Yeah, we. We had some good growth after the Morgan Stanley. We staffed up offices in those industry groups. I think we're at 50. When we did the Headwaters deal, and that was the story of the dog catching the bus, because we were 50. What do you mean? What do you mean by that? We were only 50 people then and they were 100 people. So we were acquiring A team with a much larger management team and twice our size. As you were doing these deals, industry verticalization was becoming a big driver in our industry and also on the buy side. Was that always the primary driver in your thinking about where and how to grow, or were there other considerations as you were building out the business? It always was, Andy, but different degrees of intensity, right? Industry expertise in 2002 is not what it is now. So back when we started, we were a tech only firm and there were tumbleweeds in the post Internet, the bubble burst era. So we had to quickly pivot to other industries. We went to healthcare, we went to industrials, and we went to business services. So we recognized very early on that the only way for growth was real industry expertise if you wanted to create any franchise brand. So we started to look for opportunities to grow out that franchise brand. Industry specialization was not in 2002 what it is now. No, we could guess at that, but say more. Give me two deals closed on a couple of research reports in 2002, and I'm an industry expert. You better know what you're talking about now because people will pick it up in five minutes. Charlie knows. I ask this as someone who has a boutique practice that focuses on a type of deal transaction with the business owners. Have a good case for not wanting to go to a wide auction. So there's less industry specialization. This is a cause and effect question. Is there finer industry specialization because the table stakes are higher in terms of detailed knowledge, or is it a function of the fact that the campsites are just getting more crowded? And you know, if you, you go from 50 to 200 bankers, then any, you know, any given space on the whiteboard needs to be divided more finely. Yeah, I think scale definitely plays a role in it for sure, but I also think your competitive set drives that. Right. It's not enough to style yourself an industry expert and go in and say, I'm the business services guy. Yeah, I mean, when we were smaller and our competitive set was different and we were doing smaller transactions, we operated more as like a dream catcher. Give us an industry and give us an excuse to come up with what our credentials are. And that dreamcatcher got wider and wider to adding more specialized folks along the web. I would predict for our listeners that in succeeding episodes, either Charlie or I will be saying dreamcatcher and or dog that caught the bus. I'm doing my best, Andy. I'll give you a couple more nuggets. You're listening to middle market musings brought to you by Greenberg Variations Capital and New Heritage Capital. You know, it's one thing, you know, when, when a deal, you look at a deal on paper and you're like, all right, we're gonna. This business is gonna come in. This one's gonna put it together. We're gonna have all these new athletes around the table, and then we're gonna grow and we're gonna win. We're gonna grow our win rate on our pitches by X percent, and everything's gonna be great. What you put on paper sometimes doesn't pan out in reality. When you look back, John, what have been some of the challenges when you've brought these three businesses together? Thinking about culture, thinking about people, what has worked, what hasn't worked? I think in the overall arc of the entire business plan that's now 25 years into implementation compared to the initial plan. I did not model in 7 market corrections in that time frame. So the market has something to say with when and how you can grow in terms of doing the deals that we've done. I found, at least in my own experience, 100% of the deals that you have cultural alignment in work, well, you can get through all the nitty gritty crap that goes along with integration and 100% of the deals that don't have cultural alignment. And I would put hires in that bucket as well. Those don't work out. So I think the key is to stick to your knitting and work together as partners and don't have a big ego. What about at the individual producer level? What have you learned over time? Are you quicker now to make judgments on whether individual senior bankers are going to fit or, you know, is. Is that. Has that calculation changed over time? No, the calculation hasn't changed. I just think your talent to identify the answer changes because of the reps that you have. So I think we can identify within diligence who's not going to make it. Is that diligence process different now? There are all of these analytics and metrics and consultants out there to help. I mean, do you use any of that or is it still just, you know, have the person meet everybody and have a lot of discussions? Good question. No, I think what changes is in your. What changes is your faith in progress? In the early deals, we were so focused on keeping everybody even though we may have suspected there weren't fits. As you get bigger and have done acquisitions, you realize I just build in that there's going to be attrition because there are people that don't fit. And it's in their best interest and in our best interest and not fight it because the firm will outlive any individual. So it doesn't matter. You've gotten to be a pretty good judge of horse flesh just as a result of having been through this. 40 year old young managing director. Some experience in industry specialization. Can you generalize and say there's one template that works, one set of attributes that I look for or two or three different kind of models on which I can see somebody who's at that point in their career and project them as successful. Yeah, I look for the twitchy athlete. I want somebody with a chip on their shoulder and something to prove to somebody for whatever reason. You know, that doesn't necessarily mean your typical background that doesn't hardly ever include people from bulge bracket investment banks. I want the hungry, creative, well rounded, well spoken, well written. I want the 5 skill player, but the attitudinal player. I admire you and others who have assembled scale in our profession because people who are productive investment bankers are pains in the ass. Oh God. Yeah, they're hard to manage. Right. Because they are. They're twitchy, they're disputatious. They see life as a negotiation. They have this compulsion to be heard. Right. All we're selling is our opinion. The qualities that I've seen that make someone good at what we're doing also make them challenging to manage. Yeah, the challenge with us too is that like listen, everybody's in their business to pound their brands against the wall and make as much money as it can. We get that. That's like an ante and you have to be able to deliver that in your economic model. But I also want people that have outside interests. I want people that balance in life matters to them. I want them to care about being a better mom or wife or husband or father. I want them going to their kids ballet or baseball games. You know, it's. So we're trying to build a different kind of firm that's the best breed. What's the biggest misconception people have about scaling an investment bank? Well, here's in my experience, Charlie, I don't know what the right answer is, but my experience tells me that the biggest misconception is banks of scale always go up market. And that is not our intention. Why? I love the space we're in. I have no interest in going up against the bulge bracket firms. And there's a gap between. We are a scaled boutique. I think I would say yes. We're part of a $20 billion company but we're in the Goldilocks seat, so we get the benefit of being a large publicly traded company, but we're run autonomously, so we're still, like, creative and entrepreneurial and masters of our own culture and our own decisions. So I don't want to go upstream and become bureaucratic and professionalized to a degree where we lose our personality. Yeah. If you were starting Capstone today with what you know and the path you've taken, what would you do differently? Knowing how the market has evolved, do you think the strategy. I imagine you. You've iterated, but do you think the path you've chosen has been the right one, or would you do things differently? Yeah, I think it's been right at every stage, directionally. Right. So part of being an entrepreneur is you're comfortable making fast decisions. It's directionally correct. And what I mean by that is it's okay to be 70 to 80% correct. Yeah, you can. You can get yourself in the right lane later, but you have to head in the right direction. So I think we've been very good at calling trends and making strategic decisions, within reason. John, I think we're coming up on the fourth anniversary. You and your partners got to a point where you're thinking about the next stage of growth, and you entertained offers to selling Capstone. Huntington bank came to the forefront. You closed the transaction with them. Share with us, if you will, the thought process behind the why and then also the how. Okay. There was no thought process initially around the why. In fact, we did not want to be acquired. I was very happy with the trajectory Capstone had. In fact, I felt so strong about our management team and our ability to do acquisitions and integrate effectively. I wanted to go find a private equity partner so that we could hunt for bigger game and grow faster. I don't have 25 more years in my career to do what I did in the last 25 years, so I needed to move faster. But Huntington came knocking on the door, and the rest is history. How has your life changed? Ooh, loaded question. It's extraordinary. You know, I would say from the professional side of the world, it's made me a better banker, because you can advise a lot of people to go through these transactions, but having sat through it yourself as a founder, and you have to go through all the same considerations and employee communications and incentive plans and retention, and that's a different ball game. When I sit down with a CEO now, it's an entirely different discussion. John, you completed this transformative deal, and then you had a major personal health event. Yeah, tell us about that. I had emergency triple bypass surgery that was found by accident because I was diagnosed with COVID But when they figured out it was a degenerate heart disease, on a Tuesday, I was on a gurney kissing my wife, praying it wasn't going to be the last time. On Thursday, that's how. What year was that? That was a month before the Huntington deal closed. And you know, I had a walk away deal. The only term they had in the agreement of this transaction was that John Farrar had to be alive at the time of the deal. And I negotiated hard to get that out because I thought it was just a bad omen. I just didn't like reading it. And I was like, you got to get rid of this language. They refused to. No pressure on the cardiac surgeon there. Yeah. Goodness. Yeah. We'll come back to that as a harrowing life experience. But I have to think that it certainly makes me think about the times in my career where I've sold a business value is closely identified with one individual. And you get to that point in the deal where you basically you're saying, we're going to wrap you in bubble wrap, double dive in black skiing. You're not, you're not doing that. Yeah, I guess that would be the definition of key man. Right? Yeah. I tried to convince my wife not to tell anybody and we were just going to close the deal and I'll deal with it after the deal closed. And she was, the hell you will. Wow. So what was the aftermath like both for the deal and for your recovery? You know the deal. Here's what I underestimated as an Investment banker for 30 year career is the freedom that transactions can give you when you're an entrepreneur and you're making decisions, nothing's ever about you. You go home, you have your family, you're taking care of your kids, you build in a life, you go to work, you got to take care of your customers, you got to take care of your employees. And every decision you're making is about how's that going to impact everybody else. Or the big decisions are, geez, that's a mortgage on my house. That's a big component of my retirement. That's my kids college education. Sometimes buyers can come in and take all that away. So it gives you a huge piece of the me pie back where you can say, wow, for 30 years I've just focused on everything else. Now I have the freedom to focus on what I want. And I would say leaps and Bounds. I've been living in that for four years since we became part of Huntington. So you have a new partner in Huntington. And the family recently grew further in the acquisition of TM Capital. Talk to us a little bit about kind of the capabilities that they bring to the table. Spectacular people, great cultural fit. And they were very strong both geographically and industries that we were not strong at. Brought us a southeast United States presence in Atlanta, a real flagship office in New York. And they are. They just brought industry capabilities we didn't have. So the overlay of our firm was great. And we knew that because we had already been at the table doing diligence with them before they were even part of Janney. We were. We were on the closing finish line with them two years earlier. And because of the regulatory environment, we had to pull away. And then they went and did the deal with Jani and then KKR bought Jani and decided they didn't want middle market investment banking. And we saw that as an opportunity to get the bride back to where she needed to be. You got some elements of Janney's investment banking. Yeah. Great people. We picked up a good tech team, an infrastructure team and a host of really good bankers that really supported our footprint. Where do you focus the majority of your day to day, John? Management. Do you execute at all anymore? Strategic deal. Once and always a deal junkie, Charlie. I do work on deals, but my job at this stage is to make other people more successful. So I'll always co chair with somebody and very strongly and actively in leadership development of our emerging cohort of people that are coming up through the ranks. Back in the day, commercial banks buying investment banks, the landscape was littered with. With things that didn't turn out well. There has been a blueprint with PNC and Harris Williams. It seems like people cite that a lot in terms of how commercial banks kind of get out of the way and let guys like you do their job. Would that be kind of similar to the relationship that you've developed with the Huntington folks? Yeah, because of that roadkill factor. I denied early meetings with Huntington. I didn't have any interest in it because of my history there. Yeah. But when we started talking about the Harris Williams, that. That is a great autonomy example. Right. But I think we all both felt that there was more to be had out of the combination than pure autonomy. So we've maintained independence in our brand and our market focus in our daily operations. However, the one stop shop to private business owners, that's representative of, I don't know, something like 15,000 middle market, commercial cred and Huntington's portfolio. It's really a very strong offering to those folks. So we do go to market as a unified team and we welcome not being autonomous there. We want to be one firm. You've accomplished a lot and have such a range of interests come across as a very self contained person. I have a friend who uses the phrase his personal board of directors, you know, when he has a big life decision or something that he's going through. Who is on your board? I mean, as you do all of this, who you know, who do you talk to when you need to work something through? Well, I have two voices inside of me that always give me opposite opinions. So I always go, I let them fight a little bit. And of course my wife. My dad's a go to guy and the big guy up above. Where did you meet your wife, John? We went to high school together. We actually dated for three weeks, went to a junior prom. But then I saw her later on when I was coming back to move to Australia. We bumped into each other in the bleachers of Fenway park and then we dated for six weeks and I proposed. John, among your interests. We were talking earlier and you said that you've organized a lot of your thinking around a concept that I at least hadn't heard about before called aschesis. Why don't we, as we approach the end, why don't you tell us about that? Well, that really was born after the surgery. When I came out of that surgery, self reflection, that there was just a lot more that I wanted to do and a lot better person than I wanted to become and that I could impact the lives of others a lot more than I had up to that point. So aschesis is really an ancient Greek philosophy term and it refers to like rigorous intentional self discipline. So I started studying that quite a bit and I found, you know, five or six different tools and I've combined them all into one tool that I've used over the last four years to self reflect, set goals, hold yourself accountable, make progress in different areas of your life. And I'm working on a book called Dyschesis, which will be a 365 day guide to self awareness and self realization. Wow. Is this required reading for all new Capstone employees before they're onboarded? Charlie, I'm going to have a hard enough time having my three kids read this thing. Hey, you know what we have in common? This whole podcast thing each of my children and my wife have listened to in aggregate all four of them combined. 0.0 minutes of middle market music. So, you know, sometimes my younger son, we lost that, we lost that when Henry went to college. But the first couple of years when we were doing this, he would listen fairly on and quickly figured out that praising Charlie Gifford was a great new way to irritate me. Smart man. Smart man. John, this is, this has been great. I mean, you and I knew one another only by reputation before and you, you and Charlie were friends. But thank you for joining us and sharing so much about your incredible trajectory. Thank you for having me. It's been, you guys have been great. It's been a pleasure being here. I feel like we've had lots of conversations in the past, but we touched on a lot of stuff on the background, including dream catchers and dog catching cars and all that good stuff and time really well spent. So thank you. You're a gracious guest and really enjoyed it. So thank you. Thank you for joining us for this episode of Middle Market Musings. We'd like to extend our sincere thanks to John Ferrara for joining us today, as well as to our sponsor, SRS Aquium. Thanks as well to our editor, Jason Sapolo. If you enjoyed today's podcast, we'd encourage you to like and follow Middle Market Musings on Spotify, Apple, or whichever provider you use to access podcasts. And of course, feel free to share with your friends. Thanks again and we look forward to catching you on the next one.