Gary Wunderlich starts new venture with D.C. partners
January 09, 2020
WASHINGTON BUSINESS JOURNAL
A year ago, Gary Wunderlich started asking himself the “what’s next” career question.
He has since found the answer.
A longtime prominent Memphis businessman, Wunderlich founded investment firm Wunderlich Securities in 1996. He led the company for more than 20 years, until he sold it to to B. Riley Financial Inc. in 2017 for $67 million. Wunderlich left the business toward the end of 2018, once the integration and rebrand to B. Riley were completed.
In November 2018, Wunderlich sat down with the Memphis Business Journal to discuss where he thought his next venture might take him. At the time, the self-described workaholic, who admitted he would never retire, said he was open to anything.
Fast-forward to the present and Wunderlich, along with partners Rick Hendrix and Robert Feinstein — both based out of Washington, D.C. — have founded a new business called Live Oak Merchant Partners.
Live Oak provides advisory services and capital to businesses and will primarily focus on working with middle-market companies that have a $5 million to $50 million capital need.
“We were very deliberate about using the words ‘Merchant Partners’ meaning, hopefully, we can provide more than just capital,” Wunderlich said. “We truly can be partners and share our collective experiences — both good and bad — over the past 25 years, as well as provide some capital.”
Hendrix was previously the CEO of FBR & Co. and has worked closely with Wunderlich over the years. In fact, Wunderlich and Hendrix had decided to merge their businesses when, right before that happened, B. Riley acquired FBR (Friedman, Billings, Ramsey) and then acquired Wunderlich Securities.
Feinstein most recently served as a principal at Compass Point. Prior to that he was a founding partner of FBR.
“Building a business is never easy,” Hendrix said. “But, it’s exciting and it’s fun and to do it with somebody [like Gary Wunderlich] with whom you have worked for a long time and have a lot of professional, personal regard for. It makes what can be difficult a lot easier and certainly a lot more fun.”
Typically in the private equity world, firms raise a massive amount of money and create funds that are then required to be invested in a set amount of time. This is where the partners of Live Oak think they have an advantage — they don’t have a fund and thus aren’t pressured by investors to rush a deal.
And since a large chunk of money on every deal is their own capital, it means they can — and will — be choosey.
“We certainly feel like this structure — without a fund — allows us to be able to find the best transactions that we see and get them in front of investors,” Hendrix said. “Sometimes that might be three or four [deals] a year, and sometimes, it’s possible you go a year without making an investment — and that’s OK.”
Over the past year, Wunderlich said his thoughts on his next career move changed monthly, if not weekly.
He was approached by both local and regional companies about leaderships positions, which Wunderlich said was flattering, but as his conversations with Hendrix continued he knew the formation of what is now Live Oak felt the most natural.
Live Oak takes Wunderlich back to his first job out of college when he worked for Progressive Capital, he said. That company was focused on raising capital for one-off projects.
“That was something I really loved doing — and, in fact, continued to do when we formed Wunderlich, for a long time,” he said. “It was very natural for me to come back to where I started, from a capital formation standpoint.”
But, don’t expect any of the partners to build Live Oak into a behemoth company like the ones they previously ran. They intend to keep operations small and plan to hire a few admin and analysts — tops. The business will be run out of both Memphis and the D.C. area.
As for the firm’s name, Hendrix said they tried out several, but ultimately felt Live Oak best represented the type of business they intend to grow.
“The strength and longevity that those trees have made: It feels like a really good name for what we are trying to do,” Hendrix said.