In the world of business there are those that follow the leader and then those that lead. Its not an easy path when you’re doing something unorthodox, especially if you’re a woman doing it. There was a time when Henry Kravis of KKR was known as the king of the leveraged buyout with the notable deal of RJR Nabisco. He built an empire with George Roberts and notable deals that they have their fingerprints are include Toys-R-Us, Borden, Regal Entertainment, Playtex, Beatrice Foods and Duracell.
KKR as a whole was criticized with how they perfected the art of the leveraged buyout, maybe mostly because most people didn’t understand what they were doing. When they understood then others started following their lead at every major financial institution.
Fast forward to Lynn Tilton, she perfected if not actually created the art of the collateralized loan obligation. She developed a system that allowed her to acquire companies such as MD Helicopters, Dura Automotive Systems, Rand McNally, Universal Instruments and Stila Cosmetics. Through here firm Patriarch Partners she was able to amass a fortune in turnaround situations all through the system that she created.
It’s no secret that Tilton has faced some serious battles with the SEC and investors over the years which forced her to relinquish control of a lot of those assets to date. But in the end if it weren’t for her taking a huge risk by going down a path that no one has taken via the collateralized loan obligations, perhaps a number of the over 240 plus companies that she rescued would have closed their doors permanently. She provided a raft while others at the time were providing them with stones to hold them done.
If Tilton was a male in this space would it have made a difference? Perhaps and she would’ve had access to a lot more capital and partners than she had but still she powered through it to build her empire.
I think that the story of her journey is one that books should be made of and a movie definitely should be in the works because in the world of finance you only have a handful of people that have developed methods that were unconventional at the time just as Henry Kravis has done with the LBO is what Lynn Tilton did with the collateralized loan obligations.
She is moving onto the next chapters but I believe that those chapters will bring more rewards to her and I also believe that the development of the CLO will be remembered for some time to come. As we have seen the likes of Bill Ackman, Lloyd Blankfein, Ray Dalio, Larry Fink, Abigail Johnson and George Soros take their place on the Wall Street Hall of Fame as I believe Lynn Tilton will take her place as well.
Below please read more about Lynn Tilton and her story.
- Louis Velazquez – FGA Partners
Lynn Tilton’s Journey
Lynn Tilton’s life journey has evolved from her birthplace – Bronx, NY- through the ivory towers of Yale and Columbia Universities to the male-dominated world of Wall Street. Today, as the founder and CEO of Patriarch Partners, she focuses not only on her portfolio companies but also on ”the Main Streets” of once thriving towns across America, that struggle for survival in the new economy that has turned its back on the American worker. Under Ms. Tilton’s leadership, Patriarch’s mission to rebuild America one company at a time and one job at a time have been made possible through tireless work ethic, innovative spirit and an unwavering quest for truth and light where others see hopelessness.
Ms. Tilton’s dedication to the achievement of excellence was fostered at an early age. As a teen, she was a nationally ranked tennis player, practicing nightly to improve her game from 12:00 am to 2:00 am when court time was free-of-charge.
Ms. Tilton later went on to play tennis at Yale University, where she earned a B.A. with honors in American Studies. It was during her junior year at Yale that she married her high school sweetheart, and lost the father who had been a great inspiration and motivational force in her life. Adulthood came without much warning. As graduation approached, Ms. Tilton sought the advice of friends as to which career path to pursue, and soon began interviewing at investment banking firms Morgan Stanley and Goldman Sachs, among others. She was the only candidate in her graduating class at Yale to be accepted into Morgan Stanley’s analyst program – an event that would serve as the launching pad for her career in finance.
Ms. Tilton left Morgan Stanley in 1983, managing restaurants that she owned while attending Columbia Business School. Upon graduation, she took a position with Goldman Sachs’ corporate finance group, focusing on IPOs, and later with Merrill Lynch, at their merchant bank, with a focus on leveraged buyouts. At 25, Ms. Tilton was the single mother of 2-year old Carly Jade, working 100 hours each week. After nine years at various investment banking firms, Ms. Tilton developed a clear understanding of how to successfully restructure leveraged buyouts gone bad and became fascinated with the investment side of the business. This led her to a position at Kidder Peabody, working on distressed debt research and sales, and proprietary investments in distressed assets.
In 1993, with the intent to spend more time with her daughter living in Florida, she began working from that state while commuting every other week to NY for Amroc Investments, the first firm to specialize in the trading of bank loans and trade claims. Five years later, at the urging of several of her accounts, Ms. Tilton left her partnership interests and founded her own bank loan research and broker-dealer firm, Papillion Partners, which would later be the basis for what is now Patriarch Partners.
Using her own funds, Ms. Tilton founded Patriarch Partners in 2000 on the investment principle that making money and making the world a better place are not mutually exclusive concepts. Led by Ms. Tilton’s strength and innovative vision, Patriarch Partners rescues, restructures and breathes new life into companies left for dead and piled upon the heap of creative destruction – a business practice for which few others possess the courage and dedication required to succeed.
Since 2000, Ms. Tilton and Patriarch Partners through affiliated investment funds have committed to debt and equity investments and provided operational and strategic expertise to more than 240 companies, representing more than $100B in combined revenues, thus preserving more than 700,000 American jobs that would have otherwise been lost through liquidations. It is Ms. Tilton’s belief that our country’s most valuable asset is human capital – and that job creation is the essential element to a true and sustainable economic recovery and prosperity. Her commitment to saving and creating jobs motivates her tireless daily leadership of the companies that currently comprise the Patriarch platform.
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