How Did One Bank Create So Many Wall Street Titans? | Ken Kencel

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Joe Cass: [00:00:00] And you've got to fly over to present to Mike Milken. How, how was that feeling on that flight over?  

Ken Kencel: Very nerve-wracking, right?  

Joe Cass: What was it really like working at Drexel in the 1980s? But then you move from being a kind of entrepreneurial founder to an employee.  

Ken Kencel: Correct.  

Joe Cass: So, so how, how did you, how did that feel? 

Ken Kencel: Not great. Um, that room was so small they had to move the copiers out in order to fit us in the room. And here we are today, and collectively, you know, w- we'll, we'll pass $100 billion in under management, uh, this year, so.  

Joe Cass: If you had to give your own secret to building real long-term compounding relationships, what would that be? 

Ken Kencel: What's the single biggest reason why you've been successful in your business or even your career more broadly?[00:01:00]  

Joe Cass: What was it really like working at Drexel in the 1980s?  

Ken Kencel: Well, I could tell you that it, it's, it was nowhere near as dramatic as you describe. You know, it's interesting, you know, most of us were, uh... Certainly m- most of us, uh, that, you know, are still w- you know, working today and doing what we do were, you know, were at the beginning of our careers, right? 

And we were, um, uh, learning every day, and surrounded by incredibly talented, um, hardworking, uh, folks that saw Drexel as a firm that would provide tremendous experience at a very young age. And I think, you know, if I think about the culture there and, and the, the, the world that, you know, Mike Milken created at Drexel, it was a culture of upward mobility and opportunity. 

Uh, [00:02:00] many of the folks I worked with weren't the, you know, the, the folks that had, you know, the most polished pedigree, but they were almost uniformly incredibly hardworking, um, incredibly en- engaged and, and looking to, um, you know, build their careers and, and, and, and, and, and learn as much as they could. 

But it was a great place to work, you know? And, and, uh, you know, I think about the relationships and the, the colleagues that, um, you know, I worked with there. I tell this to my people all the time, you know, you, you... You know, don't overlook the folks that you're working with and for in your career, particularly with. 

Um, you learn a tremendous amount, you know, from your colleagues, you know? And, um, I learned probably more in the bullpen at Drexel when I was, you know, in my early and mid-20s than I have at any place that I've worked in my career.  

Joe Cass: How did you initially break in to that elite M&A squad, [00:03:00] I guess, at Drexel, and what did you do differently to try and stand out? 

Ken Kencel: So I was a lawyer. So I, I, um, I had gone to law school. I'd gone to business school undergrad, and I'd gone to law school, and, uh, I guess at some point I thought I might actually wanna be a lawyer. Uh, I practiced law for a relatively short period of time at a, at a New York law firm, and it quickly became clear to me that, that the business side was a much more interesting and much more exciting place to be. 

And so, um, my best friend in college worked at Drexel And he would constantly say to me, "You know, you need to be on the business side. This is so much more interesting, so much more engaging. You know, you were never gonna be a lawyer, right?" And so, um, that, that didn't take long, right? I pretty, uh, pretty quickly figured out that, uh, that I did wanna be in the business side. 

And so, um, it literally was as simple as, um, you know, he and I were chatting one day and he said, "You know, I think there's an opening here. They're, they're looking actually for somebody who's got some background and talent in, on the legal side." [00:04:00] Uh, and so I came in and interviewed and, uh, uh, it was pretty clear to me from the beginning that Drexel was a special place. 

Um, everyone just seemed to be so incredibly focused and engaged, and it was in many respects a, a, a deal factory, right? There were... You know, everyone was working very hard, but they were live transactions with tremendous, um, uh, experience and, and the learning curve was straight up. And so when I joined, I'll never forget, I remember calling my wife, uh... 

Back, back then, we had, we'd just gotten married. We're, we're still married today, you know, 40 years later. And I remember calling Robin saying, um, "You're not gonna believe this, but, uh, I'm spending an all-nighter." It was my first day on the job and, uh, uh... And, and it was a real all-nighter, you know. I was literally working through the night and, uh, um... 

But I th- I, I think that, that really captures what the environment was like. It was, you know, it was, you know, it was... There was very little make [00:05:00] work. It, it was all about, you know, real transactions that, you know, you might read about in The Wall Street Journal, you know, and, and, you know, af- after, you know, after you've, you've closed them. 

But I, but I think that the, the thing that I remember most about that environment was the steepness of the learning curve, the relationships, and the amount that I was able to learn from my peers and, and I would say the, the maintenance or the, the ongoing connectivity that still to this day exists. I mean, there are lots of folks that I worked with. 

I mean, if you think about it now, it's 35, 40 years ago, and, and many of those folks, you know, we're still doing deals.  

Joe Cass: So just building on that, Drexel has produced financial giants, yourself, Mark Rowan, Mike Milken, Josh Harris, and many, many more, as you mentioned. Many  

Ken Kencel: more, yeah.  

Joe Cass: What do you think was so special about that culture? 

Ken Kencel: A big part of it was that- [00:06:00] we were all very young, all of us who were, you know, ear- early 20s. So, so it was a, um, a, at its core, a, a meritocracy, where talent, hard work, dedication, a, a willingness to, to, to learn every day, and to help your peers learn every day, was at the core of, of, of that culture. And, uh, we were all in New York, but of course Mike was in LA. 

Joe Cass: Mm.  

Ken Kencel: And so, you know, the, the way this typically worked is, you know, you'd work on a transaction, and once it got to the point where it was, um, kind of ready for primetime, if you will, particularly a high yield deal that you might be working on, you would go to the West Coast and present that to Mike and the distribution team, and that was kinda like going for your final exam. 

Right? You know, you,  

Joe Cass: you- Nerve-wracking.  

Ken Kencel: Yeah, exactly. And you, you know you would get, you know, all the tough questions, and you better s- you know, better have done your homework, and you better have, [00:07:00] you know, you know, make sure to anticipate, you know, a lot of the, a lot of the issues that, that would arise. 

And obviously you had to work with the management team, 'cause typically, um, that would be part of a, of a roadshow or, or an offering process. And so, you know, it was... You know, and, and every deal was like that, right? So every time you do a new deal, you know, whether it was structure or, or, you know, the, the underlying fundamentals of the business, you know, you were really in a position where you were raising the bar every time, right? 

And so, um, you learn a lot, and you learn a lot from each other. You learned a lot from the, the leadership in the firm. But they created at its core, as I said earlier, a culture of meritocracy. And so, you know, you knew that you were gonna be learning a lot, but you also knew that there would be a lot expected from you. 

So it was a super interesting place, you know. I mean, I, you know, sat in the bullpen with, with Mark and Josh and Michael Gross and Bruce Spoaler and Jonathan Levine and Bennett and Craig Packer. We were all basically... And we're all now, you know, doing our thing in, [00:08:00] in private credit, running different credit businesses. 

And, um, you know, I think at, at its core, um, there was a lot of respect, and there still is today. You know, when, when, you know, when I get asked about different colleagues, folks I've worked with, you know, the, the ones that I worked with at Drexel are, in, in almost every case, the f- the, the folks that I look back now and, and, and even over the years have a tremendous amount of respect for  

Joe Cass: So you're in your, kind of, let's say, early to mid-20s, and you're in New York, and you've got to fly over to present to Mike Milken. 

How, how is that feeling on that flight over there?  

Ken Kencel: Very nerve-wracking, right? Well, you know, I, I think by the time you were ready to go, you know, to, to do that, um, you were pretty well prepared. Otherwise, you weren't going, right? So, uh, you know, I think, um, uh, I think that we all knew that, um, if you were going to the West Coast, if you were going to the desk, if you were presenting on a deal, you know, you, [00:09:00] you had to be ready, you know? 

So, um, it was great, you know, and I think, you know, I, I, I think that the, the other element that I w- would say a- aside from a meritocracy was also a tremendous amount of creativity. New ideas, new structures were, were being explored all the time, right? And so, you know, I can think of some that worked, you know, and others that maybe didn't work, you know, that, that were creative but at the end of the day, you know, didn't really ultimately, you know, um, either structurally or financially or otherwise, you know, ul- ultimately see the light of day. 

But, but it was a place where new ideas were constantly being explored and, and tried and, and looked at as way, ways to raise capital and in many respects, you know, finance the, the, the growth of mid-sized businesses.  

Joe Cass: So just to fast-forward from this time in Drexel. So you founded Churchill Financial in 2006. 

2006, right.  

Ken Kencel: It's 20 years. 20 years this  

Joe Cass: year. 20, yeah, 20 years. Yeah.  

Ken Kencel: Yeah.  

Joe Cass: How do you start or what's the [00:10:00] experience of starting a business about 18 months before the biggest financial crisis- ... in 30  

Ken Kencel: years? The timing wasn't great, right? But you know, when I, when I think about it now, you know, uh, look- looking back on it, um, w- we were successful in raising a significant amount of capital. 

So we raised, um, 500 million, so of equity. We went out and actually raised significant amounts of long-term debt financing so that we were fortunate in the sense that by the time the GFC hit- We were, were quite well capitalized, so we, we actually had permanent capital raised. Not everyone was that lucky. 

I mean, there, there were, there were numerous folks that, um, were launching businesses very similar to ours but never got to the point where w- where they raised, um, the debt or the equity for, for their, those businesses. And back then a lot of it was more of a finance company model as [00:11:00] opposed to a pure, you know, institutional-based model. 

In fa- in fact, back then, you know, CLOs or structured finance, uh, and even back then, to a lesser extent, BDCs, were really the only capital that was really raiseable for, you know, building a third-party business. But we did get that done. We did launch, um, you know, right as the GFC was unfolding. Um, I think our financing that we raised back then in 2007, you know, was, you know, one of the last, you know, flights out of Saigon. 

You know, it was, you know, it was sort of the market was already starting to, uh, to, uh, to vibrate, if you will, at the time we raised, raised our capital. But we were fortunate. Uh, we did raise capital and, and as a result, I think that it allowed us to keep investing through the GFC.  

Joe Cass: Mm.  

Ken Kencel: And as the, you know, as, as conditions got better, you know, we were, we were well-positioned to, um, you know, to, to move forward. 

By the way, you know, our largest investor back then was [00:12:00] also Bear Stearns, their, their merchant banking, their private equity investment business. So we also had that dynamic to, to contend with, right? And so it- I  

Joe Cass: mean ...  

Ken Kencel: you know, in the middle of all this, you had this transition from Bear Stearns to, to JPMorgan as well, which, um, you know, which, which also posed its, its own, uh, challenges, so. 

Joe Cass: Can you remember those kind of weeks when that was happening or do you just kind of block it out 'cause it was so stressful?  

Ken Kencel: I remember literally opening up the Wall Street Journal and seeing that Bear Stearns was being sold to, to JPMorgan. I mean, that was, that was a year or so in. Um, but, but the, the, the Bear Stearns dynamic and the firm being sold, um, that played out over a relatively short period of time. 

You know, the, the, the issues started appearing, the cracks started appearing and within, you know, within a relatively short period of time, a few weeks, Bear Stearns went from, you know, um, an active in- investment banking business to being sold to JPMorgan in a, in a [00:13:00] transaction that was l- largely facilitated by the government, you know. 

It was... It happened very quickly. And, and we were one of the largest investments of Bear Stearns merchant banking and ultimately Bear Stearns, and they were the largest investor in the fund that we were, we were invested out of. So in that sense, um, you know, we were as a result kind of pulled back into all of that. 

Joe Cass: So we fast-forward about five years from that time. You've built the business of Churchill Financial. You then decide to sell the business to Carlyle. So how did that happen?  

Ken Kencel: Yeah. So, so when we launched the firm in two thousand and six, the, the vision was that this business of lending to middle-market companies would grow very dramatically. 

So w-we, we felt even as we launched the business that it would become, um, much more institutionalized, that private credit, uh, would become, uh, you know, a, a much more, um, [00:14:00] accessible asset class and that institutions would begin to invest in it. So that was the premise from the beginning. So, so despite the fact that we didn't really get the timing right, the premise, you know, the underlying premise was, uh, was, was very good. 

And, um, that's exactly what we saw. And so the theory was, look, you build a best-in-class private credit investment business pr-primarily investing in middle market senior loans. It's an, it's an, it's an area where the banks were already beginning to, to retreat, if you will, from, from the business of really the, the storage business of investing in, in loans, and they were transitioning really more to the moving business, right? 

So you had Glass-Steagall that occurred in the late '90s. Um, banks were, you know, recognizing that the return on capital, the return on equity for their business was much better in the investment banking business than making and holding loans to, to midsize companies. So, so they were in the midst of that [00:15:00] transition. 

We were seeing that, that, that occurring real time. Uh, we felt that by raising capital that would position us well to, um, to, you know, participate in the raising of, of capital institutionally. And, and so we, we were looking at a five to ten-year horizon where if you built a best-in-class private credit investment business, that either as, as a standalone asset management business that we were building or as part of a broader alternative asset management platform, that there would be great value in the business. 

And, and that's exactly what played out. In fact, in two thousand and eleven when Carlyle was in the midst of, of going public, one of the things that was, um, highlighted is that unlike many of their peers, they really didn't have a significant direct lending business.  

Joe Cass: Mm.  

Ken Kencel: So the thesis was, you know- We could, we could, um, diversify the Carlyle business, which of course, had a tremendous history and, and [00:16:00] track record in the private equity side. 

We could help diversify that business by building out the private credit side. Other firms had gotten into it earlier, like Aries, for example, and, and folks that went there and built that business very successfully. Carlyle was a firm that it still was really more true to its private equity roots, and this was an opportunity to, to help diversify it. 

So in, in, um, in many respects, the, the, the sale to Carlyle was entirely consistent with what, you know, w-we felt was, you know, a, a very likely path for our, for our firm.  

Joe Cass: And how does that work? Is it a case of you calling up David Rubenstein and saying, or him calling you up and saying, "Listen..." Is it, was it kind of a... 

How did it go down?  

Ken Kencel: Yeah. So, uh, so actually, we had had conversations at several points during the GFC, and I think there was a broad-based recognition that our credit investment business could be a really nice fit with Carlyle, but, but obviously, the timing [00:17:00] wasn't great, right? So, you know, we'd have discussions, and then there would be a general recognition that it made sense, and it was a good cultural fit, um, but then, you know, you had, you know, you obviously you had, uh, other things going on in the world back then. 

So as the GFC, um, started to, to, um... As things got better post the GFC and as the market started to recover and as capital started to flow more actively into, uh, into the private credit space, really starting in, um, two thousand and ten, two thousand and eleven, it became clear that the timing was, was much better. 

So I'd known David and Bill going back to my days, you know, running a business called Indo Suez Capital. Um, you know, we had been a significant investor in Carlyle's funds. Uh, we had financed many of their early defense deals. So when I think about United Defense and Power Paragon and Elgar Electronics and other deals, these are very early days, but very successful middle-market deals that, [00:18:00] that we financed, you know, with Carlyle. 

It became, you know, very clear that there was a great fit there. Uh, I had a tremendous amount of respect for, for David and for Bill and, uh, m-many folks that were, were there, Pete Claire, Glenn Yonkin, um, just incredibly talented to-folks that, um, I felt we could build a, a really significant credit business there and, um, you know, r-represented a great opportunity to do that with folks that had a great track record  

Joe Cass: So you've, you've built a great business as a kind of an entrepreneur, founder-  

Ken Kencel: Yeah 

Joe Cass: owner. You sold it to Carlyle. Yeah. You know, blue chip fund, really, really great kind of outcome, let's say five years later. Yeah. But then you move from being a kind of entrepreneurial founder to an employee.  

Ken Kencel: Correct.  

Joe Cass: So, so how, how did you, how did that feel?  

Ken Kencel: Not great. To be honest, you know, I, I, I think, you know, I think at, at, uh, certainly I'll speak for myself, at my core, um, [00:19:00] you know, I'm still the scrappy kid from Buffalo. 

You know, I grew up in a working class neighborhood, um, uh, outside of Buffalo, New York. Big Bills fan, by the way, and Sabres fan, you know. Uh, they're hanging in there in the playoffs. Um, but, but it was, you know, for, for me it was, um, uh- I've always been more entrepreneurial and, and, and I've always been more of a builder. 

And, and while I learned a tremendous amount at Carlyle, I certainly... I feel like I got my PhD in fundraising from David, right? You know, being on the road with, with David and with, you know, Mike Arpey, who kind of ran the, the day-to-day, uh, fundraising business there and, and a whole host of folks who, you know, who we worked with there, and actually many of them are actually, you know, work with us at Churchill. 

Um, it was, it was a chance to, uh, to really, um, develop my capabilities in, in, in telling the story, if you will, in terms of fundraising. But, you know, I would say the [00:20:00] dynamics of going from being a founder and an owner and, uh, a builder to more of an employee, um, really... I really wasn't loving that, you know? 

And I, I wanted... And I, and I would say, you know, and I, and I describe this very much in, in, in the way that I, I work today. I mean, my, my job as a founder and CEO, um, is, is to build the culture, build the organization, look after my people and, and in a very real way, fix stuff, right? So, so when, when it's, it's your firm and you're the founder and you're the CEO, if there's something that's not working, you know, you just roll up your sleeves and you fix it, right? 

I mean, that's what you do, right? And if it's, if it's... And then by the way, that may mean working with a bunch of your, you know, folks on your team and figuring out how to fix it or figuring out how to make sure you do it in the right way, but there is that element of being able to kind of address issues and, um, and steer the organization, both culturally and financially. 

[00:21:00] And so for me, you know, after three years there, uh, which were incredibly rewarding, and as I said, I got a PhD in fundraising. For me, uh, I really felt like I wanted to get back to, um, to, to building and, and leading my own firm. So, uh, after three years and, um, a very successful transition, we actually raised, uh, uh, several billion dollars of, of capital. 

Uh, I really wanted to, to do my own thing. So the price of that is start- was starting all over again. So I literally started all over again, uh, in, uh, 2014, 2015. So three years later, uh, I found myself building it from the ground up. And one of, one of the things that, that I felt very strongly about is that, um- The, the, the culture that you build and the people that you recruit, starting with the first employee and, and, and, and obviously, you know, uh, growing from there, were incredibly [00:22:00] important. 

And so we spent a lot of time focusing on, um, finding, you know, recruiting, retaining, mentoring and, um, uh, and, and building, you know, firm so that, you know, we had the right people. And, um, I would say now looking back, I mean, that was, I think, one of the key reasons why we've, we've had such great success is we've... 

We, we built it from the ground up again. Mm. So we certainly had experience in doing that. Um, but I really wanted to get back to, to building and running my own firm. And so I left with, um, a couple of my partners, Randy Schwimmer in particular. Randy and I have been known each other for 30-plus years and, um, he helped found and build the business at Churchill back in 2006. 

George Curti, you know, Chris Cox, these are all folks that were original founders of the firm. And, um, fortunately, they, they are well willing to join me and give it a go. Uh, so I, I'm very grateful [00:23:00] for that. And, uh, we started all over again. And I was introduced in 2014, the middle of 2014, to, um, several incredibly talented and incredibly, um, uh, uh, engaging folks that, that were instrumental in building the business with TIAA and Nuveen, and that was, um, you know, Jose Minaya, uh, Bill Hoffman, uh, Rob Leary, who at the time was running Nuveen, Roger Ferguson, who was CI- CEO of TIAA back then. 

Nick Leollis, who's now at Guardian, who was the CIO of, of TIAA, and it was just a match made in heaven, you know. They-- TIAA, interestingly enough, was a huge investor in private credit, but didn't really have their own private credit business. At the time, they were buying Nuveen, and so they were building out their asset [00:24:00] management business, but didn't really have a credit platform. 

So it was an opportunity to, to really reimagine the platform in a way that we felt, um, would position us best to, to grow the business. And so TIAA-- think of TIAA as investor, right? So allocator to private credit strategies. And, and Nuveen, and certainly the, the, the business of, of asset management, um, was really the, you know, distribution, fundraising-  

Joe Cass: Mm. 

Ken Kencel: -all of the underlying infrastructure. And so we were very fortunate to have kind of both sides, right? We had large anchor investor in TIAA. Obviously, it was, it was still back then, it was okay, but prove it based on performance. And, and Nuveen, which helped us, you know, raise third-party capital. But I can remember the days very well when Jose, who was back then in charge of, um, the affiliate manager relationships, and they had a very clear formula. 

So they would bring you in, they would help you kind of get started. [00:25:00] TIAA would provide, uh, you know, back then was a pretty modest amount of seed capital to invest. In our case, it was three hundred million to invest in private credit loans. "Let's see how you do, and then we'll decide whether we wanna keep investing with you," uh, and some working capital. 

And we literally built the business from the ground up, starting with, you know, three of us. I remember the days when Randy and I were sitting in a conference room at, at our law firm, Ropes & Gray, and, uh, that room was so small they had to move the copiers out in order to fit us in the room. So, you know, we'd, we'd, we'd meet every morning with our coffee and think about and, and work on the plans for the business and the structure and how we would organize it. 

Um, you know, and here we are today and, um, you know, collectively, you know, we-we'll, we'll pass $100 billion in under management, uh, this year. So it's been-  

Joe Cass: That's very cool.  

Ken Kencel: It's been quite a journey. But it was-- it-- there is no way we would be where we are today if it [00:26:00] weren't for the partnership and the support of TIAA and Nuveen. 

You know, th-they were Incredibly supportive, incredibly helpful in terms of building the business. But on the other hand, uh, you know, there were periods of tough love as well, right? So, you know, I can remember days when, you know... I, you know, when we first got started, TIAA had these mothballed offices that were very nice, but they were the old senior executive offices. 

So the new senior leadership team for TIAA had moved to, uh, fancier, swankier offices, and there was a floor that basically had been closed. Yeah. And it was the old senior offices, right? So it was Roger's old office and the CIO's old office. And so... But it was, you know, the design was, like, straight out of Mad Men, you know, from the 1960s, right? 

Beautiful. Oh, it was beautiful. I mean, you know, bar, there's a bar in one of the rooms, you know, on one of the, one of the, uh, one of the offices. And, uh, and, uh, you know, so we moved in, right? And so we thought, "Well, this is great." You know, [00:27:00] we're, we're actually working out of the, the former executive offices for TIAA. 

And you think, well, you know, "Hey, you know, we're, you know, we're, we're on, we're on our way here," right? Uh, and I remember, uh, Jose, uh, w- you know, was... I was talking with Jose and, you know, I was... Uh, he'd come down to visit us in the, the, the offices we were in and I said, "Well, this is great, you know, this is, this is gonna work out well." 

And he said, "Well, don't get too comfortable because we're gonna kick you out in a few months," right? So, uh, you know, so we were... You know, it was tough love in that sense. You know, okay, how do you build a business? And you're not here to just manage capital for TIAA, although that's super important. Y- your goal and your job is to, to build a third-party investment business. 

So pretty much from day one, we were very focused on, you know, on building out our investor, um, base and fundraising and, and all of that. And that's where Nuveen, you know, with an asset management focus and a, a global footprint became in- you [00:28:00] know, became incredibly important  

Joe Cass: So people will see you, successful Wall Street guy, founder, entrepreneur, sold businesses. 

I think it might surprise some people to understand your kind of early years. So could you kind of go over your time growing up and your experiences before the Drexel and the Churchill?  

Ken Kencel: Yeah. Yeah. Well, you know, I've definitely had an interesting background, that's for sure. Um, and I, and I, I think like everyone, you know, your, your childhood and, and, and your background, you know, in many respects shape who you are. 

You know, in my sen- in my case, um, you know, I, I grew up in a, in a, in a very, um, working class neighborhood, uh, outside of Buffalo, New York. Actually, a, um, it was a pla- it was a town called Woodlawn. I was, uh, I grew up, uh, across the street from the steel plant. My-- Actually my, my dad died when I was two. My mom [00:29:00] died, um, when I was very young as well. 

So by the time I, you know, got to, you know, freshman year in high school, both my parents had, had passed away. I was raised by my uncle, who worked at Bethlehem Steel. Um, made the journey across the street to the steel plant, uh, every day as I was growing up. And I saw, um, you know, how The, the, the really the, the, the way out of, of, of that dynamic was to work incredibly hard and hopefully, um, go to great schools that would give me the opportunity to, to do better. 

And I remember my uncle often saying to me, um, you know, "You, you need to work hard and, and, and, and, and get to a better place, and I'm gonna do everything I possibly can to help you go to a great school and get a chance to go to college." And he never graduated from high school. He was a bachelor and, um, worked in the steel plant his whole life, [00:30:00] and he was a carpenter actually in, in the steel plant. 

And, um, and so he sent me to an all-boys Jesuit high school in Buffalo, New York, called Canisius High School. And the Jesuits really changed my life. You know? They, they were, they were in many respects the intellectual fathers that I never had. You know? And I, and I remember so many of them as thinking they were just so incredibly urbane and smart and well-read and, you know, Shakespeare was a whole new world, you know? 

And, and, and, uh, there was in particular a Jesuit there, um, who I learned so much from and became, you know, like I said, in many respects my, my intellectual father. Um, and he was, um, incredibly, uh, talented. He was both, um, a great teacher but also ran the drama guild and kind of all the, the various, you know, clubs at the school. 

And so, you know, it was Canisius that really gave me the opportunity, uh, to, to really, um, [00:31:00] grow and develop. And from there, um, the Jesuits, um, sent me to an all, uh, to, from, from Canisius, which was an all-boys Jesuit high school, to Georgetown. Uh, and it was at Georgetown that I met my, my wife and, um, and, uh, you know, got an opportunity to really, um, uh, explore business. 

So I went to the business school there. Um, I never even visited Georgetown when I went there. So, you know, I applied. I got a full scholarship. Um, and I never even did... You know, I know today kids go to 20 schools, and they go visiting all over the country and everything. I couldn't afford to do that, right? 

So I'll never forget the day when my uncle, you know, took me to, uh, to Georgetown to, to, uh, to start classes, you know, in the end of August. And I remember looking around. I'd never even been to Washington before, right? So I remember looking around thinking, "Oh my gosh," like, "This is just unbelievable. I'm actually gonna go to school here," right? 

So, um, and from there, you know, went to law school at, at Northwestern. [00:32:00] And, uh, you know, um, you know, got, you know, got so fortunate. I was so fortunate to be able to, um, to have those opportunities and I'm- I was on a full scholarship in, in both cases, both at Georgetown and, and Northwestern.  

Joe Cass: Wow, what a great uncle. 

Yeah. I always think there's such a skill involved in- ... understanding kind of what you're doing in life, but also trying to improve it for other people. Understanding, okay, well, it's more difficult for me to kind of move. It might be challenging for me, but for these guys-  

Ken Kencel: Yeah ...  

Joe Cass: there's real opportunity here. 

That's a real skill I feel, I feel.  

Ken Kencel: Yeah. Well, you know, it's, it's interesting because wh- when I was growing up though, even though we were, you know, we, we had very modest means- I never saw myself that way because, and I know my-- and even though I, I, I didn't-- I grew up with no parents and in fact, the, the backstory is that when my, my mom passed away, um, my uncle applied to be my guardian and, um, almost a year went by before he was approved [00:33:00] to be my guardian, and there was a point at which it wasn't looking great. 

It looked like I might-- There was a chance I might actually go to an orphanage, right? And so, you know, for me, it was, um, uh, it was a loving, supportive... You know, he was great, right? So I never thought of it as being disadvantaged. I thought of it as, "Gee, well, my uncle was able to step in and adopt me and, and raise me and send me to this incredible school and give me all this opportunity when, um, you know, it could have been a lot worse." 

I could have ended up in, you know, an orphanage somewhere or, or, or, or worse. So I, I never thought about it as a disadvantage. I always thought, like, you know, I, I had someone who really believed in me. You know, there's a great book by, uh, Dina McCormack that, you know, Who Believed in You? Mm-hmm. And I just finished reading it, and it, it's so true. 

You know, I think if you look at, uh, you know, individual stories and, you know, you do this, you know, you do this all the time, but I [00:34:00] think if you look back at people's stories, invariably there's someone in their life, maybe more than one person, who believed in them and gave them an opportunity. And I've been fortunate to have a number of people like that in my life. 

My uncle, you know, the folks at Drexel who, you know, I had a great opportunity there and a great job and a, a chance to really, you know, build my career and, and of course, obviously the folks at TIA, Nuveen, who were so incredibly influential in, in building the business we, we have today. So, you know, I think a lot of it comes down to people that believe in you and provide you with an opportunity and, and to, to me, that's a big part of, of what I focus on today is, is our people. 

And if you were to say to me, you know, "What's the single biggest reason why you've been successful in your business or even your career more broadly?" I would point to the fact that I've surrounded myself-- I've tried to surround myself With people, um, [00:35:00] in an organization and create an environment where y- you're surrounded by people that love you and want you to be successful and want you to s- you know, you- want you to grow both intellectually and emotionally. 

And, um, that's the kind of environment that I try to create at Church Hill. Almost a family-like environment. Uh, an environment where, you know, we love you, we're gonna push you, you're gonna work hard, but you know we got your back. You know, we're gonna, you know, we're gonna make sure that, that you get every opportunity to be successful. 

And, and a big part of my role today is, is checking in with people and making sure that, that they're getting everything they need to be successful from a, a, a business perspective, from a training standpoint. Um, you know, we, we, we have very, very little turnover in our organization, and I think a lot of it has to do with the, the culture we've created. 

A c- you know, a culture of, of, that's both supportive, but also challenging and, and, and providing, you know, opportunity for growth and, and development.  

Joe Cass: We often hear from kind of, [00:36:00] uh, particularly the younger generation around relationship building or the difficulty in doing so.  

Ken Kencel: Yeah.  

Joe Cass: So if you had to give your own secret to building real long-term compounding relationships, what would that be? 

Ken Kencel: Well, first of all, I, I, I will tell you that I, I think you're spot on. I think that, that the, the people side of the business, the relationships, obviously with your, your own folks that, you know, your teammates, you know, in, in, in, in your firm, but relationships, uh, with clients and investors are, you know, absolutely fundamental to, to building successful organizations. 

I think that, um ... I, I would say that the, the, the thing I like to focus on is making sure that- Those relationships, whether it's with the private equity firms that we work with that are the lifeblood of our deal [00:37:00] flow and investment activity, or our investors that trust us with their capital to, to invest for them and obviously ultimately for their members and participants, that those relationships are a win-win relationship. 

So h-how do I embark upon a new relationship? It's always thinking about if you're gonna create enduring relationships in the private equity world, in the investment world, and, and indeed with your own people, you, you have to look at them from the standpoint of, "How do I make sure that this is a win-win relationship?" 

That, that the private equity firms we work with trust us, can count on us, good times and bad. Sometimes, you know, things are not always perfect, right? You'll have some deals that'll, that'll, you know, that may not work out as well as you expected, but they always know that we're, we're, we're trying to, to reach a result that's the best possible result for, you know, for [00:38:00] them, and most importantly with our investors, making sure that they trust us, you know, with their, with their capital, and, and that we're always looking for ways to make sure that, you know, we put their needs and, and, and, and, uh, requirements paramount. 

So approaching relationships from the standpoint of making sure that they're successful from both sides is a, is a really, really important dynamic for me and, and, and for us as a firm. Um, and it's, um, it's really underpinned how we've built the business, right? I mean, if you think about the fundamentals of our, of our business, we, we are a direct lender and a private capital provider, but we are also a very significant, uh, on the private equity side of our business, we are a very significant investor in private equity funds and a co-investor alongside those firms. 

So if you think about our business model, it's not just debt and financing, it's that we do everything from equity to secondaries to fund commitments to junior debt [00:39:00] commitments. So we are a solutions provider, if you will, up and down the balance sheet. Um, and so there's lots of ways we can be helpful to create that win-win dynamic, right? 

Sometimes it's we can be there to help you with lending. There are other times when we can be there to provide an equity co-investment or invest as an LP in, in, in the fund. So, um, having all the tools And, and being in a position to deliver is, is a great way to start, but once you're in that position of trust, you have to be able to, to, to live that, you know, all the time. 

And I think that's been one of the keys to our success, is that people that, you know, the relationships we've built have been built on a foundation of a win-win dynamic and, um, that's a- an aspect that I'm, I'm very proud of, uh, and one that I think has been critical to our success.  

Joe Cass: Ken Kensal, thank you so much for joining me. 

Ken Kencel: Thank you, Joe. It's [00:40:00] great.