Key Points
- Tracy Britt Cool has been busy acquiring midsize companies, and now she wants to build a close-knit community for these smaller businesses.
- The 39-year-old investor struck out on her own in 2020 after working for Warren Buffett for a decade.
- Her private equity firm Kanbrick focuses on companies with $5 million to $50 million in earnings before interest and taxes, in industries ranging from consumer to industrial to business services.
Tracy Britt Cool has been busy acquiring midsize companies — ones too small for her old boss Warren Buffett at Berkshire Hathaway — and now she wants to build a close-knit community for these smaller businesses. The 39-year-old investor struck out on her own in 2020 after working for Buffett for a decade. Her Charlotte- and Nashville-based private equity firm Kanbrick, a nod to her Kansas background and fostering businesses “brick by brick,” focuses on companies with $5 million to $50 million in earnings before interest and taxes, in industries ranging from consumer to industrial to business services. Cool is a co-founder, along with partner Brian Humphrey. Kanbrick won’t say how much money it manages, although earlier this month, it announced raising $220 million in new capital. Cool’s investment criteria sounds a lot like Buffett’s, except on a much smaller scale: family- or founder-owned, having a competitive advantage and with long time horizon. Unlike the Berkshire CEO’s laissez-faire approach to managing his companies, however, Cool is more hands-on, guiding company leaders through hiring and developing strategies. “We want to be the trusted home for midsize companies,” Cool said in an interview. “There’s accelerators for startups. But there really isn’t much for midsize companies. CEOs and owners who really want to take their company to the next level struggle oftentimes to find resources.” That’s why she started a special community program where she twice a year brings together five outside CEOs to workshop roadblocks and fine-tune their business strategies. The eight-week program already has 30 alumni and participants have included the CEOs of Elite Roofing Supply, Ring Concierge and Evoke Medical. Kanbrick hasn’t invested in any of the companies in the program and there’s no expectation of any investment as Cool maintains that midsize companies are usually not capital constrained. “We share a personal business system that we use in our companies. We go deep with them on topics they have and issues they’re facing in their businesses, and then we bring in outside guest speakers. We share resources,” she said. Buffett influence Cool famously got a job working for Buffett as his financial assistant by sending the “Oracle of Omaha” a letter after graduating Harvard Business School. She climbed the ladder quickly at the conglomerate and become the CEO of Pampered Chef and served as chair for Benjamin Moore and Oriental Trading Company, among other holdings. The move to ultimately leave Berkshire came as a surprise to outsiders since executives at the conglomerate tend to stick around forever. Cool declined to comment on her relationship with Buffett or her experience at Berkshire. Still, Buffett, one of the world’s biggest deal-makers with mountains of cash on hand, clearly left a mark on Cool in terms of her investment philosophy. Cool also writes an annual letter to her partners, discussing not only Kanbrick’s business, but also the broad market environment. The biggest deal Kanbrick has done is buying JM Test Systems, a third-generation family business in western Pennsylvania that calibrates industrial equipment for accuracy and safety. Cool declined to disclose the deal specifics. “It’s the quintessential Kanbrick acquisition because it’s a family that really wants to be involved, wants to continue to grow the company and really sees the growth profile, but they want a partner to help them to take the business to the next level,” Cool said.
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