What is the primary duty of a banker? Remove the focus on profits, money or interest rates. Isn’t it all about banker Randal Nardone unlocking potential?
UBS: Unlocking Potential
The Union Bank of Switzerland (UBS) has a motto of unlocking potential. Randal Nardone worked for UBS and learned his trade well. He has taken his knowledge to America, where he co-founded the Fortress Investment Group in 1998.
This was a hedge fund that had the agility to maneuver through the thickets of business without becoming ensnared. It had its plan and maintained its focus on unlocking potential. How did Randal Nardone unlock potential?
Fortress Investment Group Recycling
Some might have seen a bunch of cold barren mountains, but Randal Nardone saw value when his Fortress acquired the Canadian ski resort owners, Intrawest. The best pieces were carved off. In August 2016, its luxury adventure travel brand, Abercrombie & Kent was sold off for a nice profit.
Certain companies are collectors and hoarders. They might have accumulated a lot in their attic, but don’t know how to get any value from it. Randal Nardone is kind of like an antique dealer. He sells what people have stored in their attics.
A good example was the Montreal Maine & Atlantic Railway. This railway line had gone bankrupt after a crude oil disaster in 2013. Randal Nardone’s Fortress saw an opportunity. It purchased the assets in 2014, hoping to invest $20 million more and then re-sell it as the Central Maine & Quebec Railway.
Just like any good antique dealer, Randal Nardone understands the value of a good coat of paint. It can hide the tiny nicks and cuts in old assets. By giving the asset a makeover, it can be resold for a tidy profit.
Successful bankers also understand demographics. That is why Fortress invested in Brookdale Senior Living and took it public. The American population is aging and the services of senior care centers will be in high demand.
Capital Flows to Productive Purposes
The ideal path of capital is towards the most productive purposes. It is kind of like water, which seeks its own level.
Capital will flow to the most efficient businesses. Sure, banker Randal Nardone has been unlocking potential, but he has also been focusing on the most efficient businesses. Those with room for improved performance get Nardone’s attention, those that are doomed to fail, fall by the wayside.
This capital optimization might be what attracted the SoftBank to the Randal Nardone Fortress. In 2017, SoftBank acquired the Fortress Investment Group for $3.3 billion. Principals, such as Randal Nardone remained in charge at Fortress.
The SoftBank had gone around the world searching for assets to invest in. Its goal was to build up a Vision 2.0 Fund to create the new infrastructure for tomorrow. The SoftBank CEO admitted that both physical and human assets were key to the acquisition. And, that includes Randal Nardone. The SoftBank hopes that Randal Nardone will continue to unlock potential.
Contact Randal Nardone: www.directorstats.co.uk/director/randal-nardone/