Brent Beshore – Contrarian Private Equity Investing – EP.20

Today on The Alternative Investor we have our first guest on the show: Brent Beshore! Brent is the CEO and founder of Adventur.es — a private equity firm in Columbia, Missouri. Adventur.es has a unique investment approach: they seek boring businesses. They explain this perfectly themselves:

“Boring businesses endure because they consistently solve a meaningful problem and were patiently built over decades,” “Truth be told, our responsibility is not just to seek and sustain boring businesses, but to be boring ourselves. Boring is reliable, faithful, and predictable. Boring is sustainable. We are committed to doing what we say we would, when we said we’d do it.”

This episode, Brent, Brad, and I discuss the workings of Brent’s firm, how they go about securing deals, their due diligence process, what deals they look for, and how he deals with a variety of situations within the firm. He also gives his views on growth, what industries he won’t touch, and what he thinks about current asset pricing.

Adventur.es has some pretty contrary views and approaches to traditional private equity firms so it was an extremely interesting interview that we recommend you all tune in to this week!

 

Key Takeaways:

[:10] Our guest, Brent Beshore, introduces himself and tells us a little about his background and how he got to where he is today.

[2:28] How Brent started up his private equity firm, Adventur.es, and what they’re all about.

[8:09] About the makeup of Aventur.es’ portfolio: what kind of companies they currently have, what they like, and what they’re looking for.

[11:05] How did Adventur.es get comfortable with some of the more cyclical deals (especially with the pool companies).

[14:14] Does Brent believe that volatility does not equate to risk?

[17:11] How do they have the liberty with their fund where they can hold a deal indefinitely?

[18:58] Are they reinvesting dividends each year?

[19:55] Do they have discretion?

[20:16] Does Brent find that the sellers they buy deals from generally involve competitive bidding?

[24:40] How Brent keeps a sense of urgency in their operation (without the pressure of the 3-5 year time frame a traditional private equity firm generally has with businesses).

[27:37] In most cases, is Brent dealing with the CEO who’s selling the business with a management team stepping up or is he hiring other operators to come in?

[29:21] When the owner is not staying around, and a new management team is stepping up how does Brent keep those people incentivized?

[31:05] Brent’s process of finding deals.

[34:30] If a broker sent Brent a deal he would normally want to buy, but it’s part of a bigger process with multiple firms bidding on it, does he step out?

[37:52] Brent gives us a back-of-the-envelope approach to how he thinks about what is an attractive business for Adventur.es.

[42:31] How Brent thinks about due diligence and the major things that kill a deal.

[46:53] In their due diligence process, how much time is spent within the company internally and how much is spent thinking about the market and external factors?

[50:31] About Brent’s meeting with Warren Buffett.

[52:04] What kind of multiples is Brent seeing in business right now? And how does he think about what’s the best multiple to pick?

[55:11] How much is too much customer concentration?

[57:05] How much does Brent care about growth?

[58:24] Are there any industries Brent wouldn’t touch?

[59:48] How does Brent think about current asset pricing?

[1:03:22] Where to find more of Brent’s content and Adventur.es online.

 

Mentioned in this Episode:

Adventur.es

Brent Beshore’s LinkedIn

The Oracle of Omaha