Hamilton’s New York City Program students participated in their semester’s final event with a visit Robert Morris ’76 in Stamford, Conn., on Dec. 6. Morris invited the group to dine at his offices, where he manages Olympus Partners, a private equity firm with more than $3 billion in assets under management. To date the group had not spoken with an alumnus in the private equity industry, and Morris hosted a visit to remember.
He started on the Hill as a pre-med student, and as an athlete on the baseball team. As Morris put it, a career in financial services seemed the logical pursuit with such a background. He began his career with General Electric’s Investment Corporation, currently known as GE Credit, and worked at GE for a number of years, achieving great success within the company. In 1988, Morris found himself at a crossroads in his career. As he told the group, he could either continue working with GE as the executive vice president of the pensions trust, or move on to a different career. At the time, Jack Welch asked Morris to strongly reconsider leaving GE. Morris declined, and left to open his own private equity shop.
Since its founding in 1988, Olympus Partners has successfully raised five funds with the latest, Olympus V, valued at slightly over $1 billion. Unlike other financial services, a private equity firm “must sing for its dinner,” as Morris puts it, every few years to raise capital. A private equity firm essentially receives capital from its investors and typically uses that capital to purchase majority positions in companies, eventually selling their position for a profit. This transaction does not have to take the form of a leveraged buyout; firms such as Morris’ simply need to sell an asset for more than the purchase price to realize a return on their investment.
Morris walked the group through the history of his firm, and the strategies he has pursued in the volatility of recent years. Unlike many of their competitors, Olympus Partners did not partake in the gluttonous purchasing spree leading up to the 2008 crisis; prices were simply too high.
He gave a simple example to the students, equating the inflated valuations of the pre-crisis era to a $16 beer. Most rational buyers would prefer not to pay $16 for a drink; $6 or $7 seems more appropriate. On the other side of the coin, however, Morris and his firm sold a great deal of their assets in the years leading up to 2008, taking advantage of artificially high market valuations. “I won’t buy a $16 beer, but I’ll sell them to you all day long,” said Morris. Consequently, Olympus Partners has taken advantage of depressed values since the recession, purchasing assets at bargain prices.
The students peppered Morris with questions for a good two hours, ranging from the specifics of his business, to the effects of impending regulations on his industry to how to best break into the private equity industry. He answered each question with a unique combination of industry savvy, salience, and as always, with a great deal of wit that had even Professor Balkan struggling to get a word in between fits of laughter. The ease and skill with which he spoke with the students left little doubt as to how Morris has attained such success within an industry which greatly stresses the importance of client and investor relationships.
As parting advice Morris made a point of stressing the importance of lifestyle preferences in pursuing certain career paths. Morris could have stayed with GE back in 1988, rising to the top of the executive ladder, but as he told the students, he would not have been able to develop the family life he now enjoys so much. Though more than worth striving for, professional success does not necessarily need to cast a shadow over the rest of one’s life. Morris emphasized the importance of pursuing interests and unique hobbies. He told the group he may go back to his days as an author should he leave his current field.
The visit with Rob Morris and Olympus Partners seemed an appropriate way to end the semester on a high note for the Hamilton students in NYC. Whether pursuing a career on Wall Street or in corporate America, Morris assured the group they would run into “fascinating” individuals, and urged them to drink in the opportunities that the Hill and the world beyond has to offer.