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The Deal Maker's Ear
+by Niki Butler Mitchell
Smith Whiley's Venita E. Fields reminds us about the importance of listening.
Smith Whiley’s award-winning private equity professional Venita E. Fields has developed an ear for investment opportunities that yield healthy returns. |
Behind every business is a story. And as a private equity investment professional, if you know how to listen, according to Venita E. Fields, senior managing director of Smith Whiley & Company, you just might be able to hear your way into financial opportunities.
These days, when Fields talks, other investment managers and institutional investors are inclined to listen. Smith Whiley specializes in private equity and mezzanine investments. In recent years, Smith Whiley has earned a reputation as one of the industry's more accomplished middle- market deal makers.
Last year, Fields and her team were nominated for the 2007 Middle Market Financing Deal of the Year by the M&A Advisor, one of the industry's leading information providers and conference coordinators, for the funding of Midwest Dental Holding Company. The M&A Advisor annually recognizes outstanding performance by middle-market mergers and acquisitions professionals (see Recognizing the M&A Industry's Finest," page 23). In 2006, the M&A Advisor recognized Fields as a top deal maker and honored the Smith Whiley team she led with the Consumer Financing Deal of the Year award. Smith Whiley invested $7.5 million in Aquion Water Treatment Products LLC, and had full realization in 19 months, generating an internal rate of return of almost 40 percent. In 2005, she was a double finalist for the M&A Advisor's Financing Deal of the Year and Woman Deal Maker (see story, Journal of EDM Finance, spring 2006, page 9). In that case, the savvy deal maker was recognized for applying her vision and investment acumen to Smith Whiley's investment in the Holland Group Inc. a 95-year-old, privately held, Michigan-based corporation that generated sales in excess of $250 million at the time of investment. Smith Whiley, through its SW Pelham Funds, invested $10.5 million in Holland and had a full realization within 17 months, generating an exceptional investment return.
Gwendolyn Smith Iloani, CEO and founder of Smith Whiley, couldn't be happier with Fields's work or the accolades and attention she and her team have brought to the company.
"One of the reasons she's my partner is because of her stellar performance," Iloani says. "She's masterful at finding the right deals and they are interesting deals. Beyond that she is a mom and a leader in her church. She can balance multiple priorities well. Not only is she a wonderful investment manager, I'm proud to call her my friend."
Midwest Dental, Aquion and Holland are not exactly what Wall Street might consider sexy companies. Midwest Dental practice is a dental management company. Aquion sells water and air-treatment systems and Holland makes coupling parts that connect the cabs of trucks to large-haul trailers. But Fields has gone a long way towards perfecting the art of recognizing opportunities.
The Mississippi native, who moved to Chicago to attend college and "just never left," brings sensitivity to the businesses in which she has an interest, so she understands their needs and desires. The rest is good old-fashioned due diligence. For example, she and her team looked at Holland's performance over a 20-year period to determine how fluctuations in the economy had affected the company. What they found as they "peeled the onion," she says, was a solid record of smart fiscal management through periods of national recession and prosperity. Fields took a similar approach to the Midwest Dental and Aquion deals. During the investment period the three companies' financial performance improved while Smith Whiley got solid returns.
Fields' achievements are the result of thinking outside of the box. "You don't bring the same cookie cutter approach to every deal," she says. No doubt the 20 years of experience she acquired in corporate banking before joining Smith Whiley in 1998 has helped, too. While in banking, Fields worked in structured finance and met a lot of people working in private equity. She came to know the industry well and was interested in the opportunities. In addition, many of her corporate banking peers were transitioning to private equity. Fields jumped at the opportunity to open a Chicago branch of Smith Whiley & Company. It was the right move for someone who considers herself as passionate about helping middle-market businesses achieve their visions of greater success as she is about making smart and highly profitable investments for her funds. While pleased with her decision to try her hand in the private equity environment, she admits that such a move isn't for everyone.
"The skills [learned in corporate banking] are transferable, but it's also a psychological leap," Fields says. In her opinion, private equity is not just a job, it's a lifestyle choice. If IBM is laying off 100 people that's one thing, but if a smaller business can't make its payroll, that's something else. "As a major investor you might get calls on Friday night or on the weekend because your capital really counts. You have to love working with entrepreneurs. This is a people business."
Fields says she feels equal responsibility to the funds she represents and to the businesses with which she invests. But she also brings a level of humility to her dealings and says that investing in the lower end of the middle market is a humbling experience. It's hard work and one of the most valuable skills any deal maker can bring to this work is the capacity to listen intently to the details. "I try not to bring my ego to the table. Each entrepreneur has a story to tell." EDM
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