Ancestor to several boutique banks, Bowles Hollowell Conner

February 2013
TheMiddleMarket.com
Ancestor to several
boutique banks,
Bowles Hollowell Conner
raised the bar for
middle market service
Living Legacy
Chris Williams and Hiter Harris
co-founded Harris Williams & Co.
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LIVING LEGACY
By Danielle Fugazy
T
here are certain firms that become a breeding
ground for entrepreneurs and consequently new
firms. When Bowles Hollowell Conner & Co.
(known as BHC) opened its doors in 1975, the
firm was just that. Firm founders Erskine Bowles (who later
became President Bill Clinton’s White House chief of staff),
Thomas Hollowell and Charles Conner had the foresight
to see that the M&A market was growing — not just with
larger deals, but rather the opposite. An increasing number
of smaller deals were proliferating, and Wall Street didn’t
seem to care much about them. In the mid-1980s, there
were only about 25 middle market private equity funds.
Today, there are 2,500. BHC seized on the opportunity and
created the first boutique investment bank dedicated to the
middle market. The firm specialized in advising companies
with annual revenue of between $30 million and $500
million and did so with superb service. Looking back, some
argue that BHC’s high-level service was better than that of
its much larger bulge-bracket brethren.
During the process of building a legendary investment
bank, the founders hired scores of professionals who had
the entrepreneurial itch. Indeed, the founders of BHC
had a knack for hiring strong talent. In 1993, Harvard
Business School published a case study about the firm’s
recruiting process. The majority of the people that worked
at the firm realized that BHC focused on its employees,
which in turn pushed them to do their best.
“ In the mid-1980s, there were
only about 25 middle market
private equity funds.
Today, there are 2,500. ”
“The culture at Bowles Hollowell was different,” says
Hiter Harris, co-founder of Harris Williams & Co. and
a former BHC team member. “The words ‘middle’ and
‘market’ hadn’t really been put together yet. The firm
emulated some of the best banks in New York, but it was
Harris Williams & Co.’s
Chris Williams and Hiter Harris
Ancestor to several boutique banks,
Bowles Hollowell Conner raised the bar for
middle market service.
also innovative. It was based in Charlotte, versus New
York, and the founders really focused on the people.
Everyone there was learning,” Harris adds.
In 1998, BHC was acquired by First Union, and then
in 2001 Wachovia bought First Union. In the end, some of
BHC’s hires left before the bank was acquired by First Union,
and others left after. Many went on to launch successful
middle market investment banking firms. Additionally,
scores of associates left the firm to go to work at private
equity firms, such as Advent International, the Audax Group,
Berkshire Partners, the Carlyle Group LP (Nasdaq: CG) and
Olympus Partners. The following is a look at some of the
successful firms spawned by BHC and the legacy the bank
has left behind.
Standard Bearer
M
ost professionals who worked at Bowles Hollowell Conner & Co. are quick to say that it was the team spirit that made the pioneering
investment bank such a great place to work. Most also agree that it was Erskine Bowles who kept the energy level high and kept
young associates aspiring to do their best.
“He was such a unique individual. He had a quality about him that could make you feel like you were an important
part of his life. He made you feel special,” remembers Chris Williams, a co-founder of Harris Williams & Co. and a
former BHC team member.
“He was also a tremendous salesman. No one was better than Erskine.”
After working at Morgan Stanley in New York, Bowles went back to his home state of North Carolina to launch
BHC with Hollowell and Conner. Raised by a father who was involved in politics, it was not surprising when
Bowles left the bank to serve in President Bill Clinton’s administration, ultimately as White House chief of staff
from 1996 to 1998. Bowles served as president of the University of North Carolina system from 2006 until 2010.
Today, Bowles is best known for his work as co-chair, with Senator Alan Simpson, of President Barack Obama’s
deficit-reduction commission. As recently as the end of 2011, Bowles was floated as a possible replacement for
U.S. Treasury Secretary. However, that didn’t come to pass, and we wait to see what Bowles’ next move will be.
Erskine Bowles
“The culture at Bowles Hollowell emanated from him,” says Ed Imbrogno, a partner with Fidus Partners. “The
other founders complemented it and helped build a firm around it. Erskine set the bar very high.”
Harris Williams & Co.
Harris Williams has solidified itself as a go-to firm in the
middle market. Co-founders Hiter Harris and Chris Williams
both came out of BHC. Friends since Harvard Business
School, Harris and Williams were recruited to BHC in 1987.
At the time, there were eight professionals working there. It
was the first year the firm had actually recruited in a formal
way. The firm had just hired Steve Cummings from Kidder
Peabody to come on as a fourth partner, and he started the
associate and analyst programs and the recruiting process.
“It was about doing exceptional work, but it was also about
quality of life and family. It was unique,” remembers Williams.
Today, Harris and Williams try to run their shop similarly
to how BHC operated. The founders focus on hiring the best
talent and keeping them happy. Since Harris Williams & Co.’s
founding in 1991, only a handful of people have left the firm.
What’s more, the firm has now grown to 215 people.
“Our goal was to serve clients well, hire the best talent and
enjoy working together. We took these things to heart and
knew success would come later if we followed these basics,”
says Harris. “For Bowles Hollowell and for us, it’s about the
people. We don’t have a lot of assets, and our assets go home
at the end of the day. You have to create something special
to keep people wanting to work hard.”
“ Bowles Hollowell saw the value
in providing services to middle
market companies when not too
many did at the time.”
Adds Williams: “Both firms were founded by people who
were entrepreneurial. It drives our culture as it did theirs.
These are very important roots. Our experiences there helped
us realize that we wanted to be deep in the middle market.
We saw more money coming into the asset class from the
limited partners and recognized the opportunity.”
During the Richmond, Va.-based firm’s early years,
Harris Williams worked with what were then considered
small shops, such as the Riverside Co. and Linsalata Capital.
Today, Harris Williams still works with these firms and
other private equity firms and major corporations. The firm
completed more than 75 M&A transactions in 2012.
“We had very humble beginnings. We shared a computer
and office, but the seeds for something great were planted,”
muses Harris.
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