5 Questions With Facilitator Capital Funds’ John Reinke –

There are a number of buyout shops discussing succession plans today. At Facilitator Capital, you had that issue thrust upon you with the passing of Bob Zobel. What challenges came about from his passing?

We had to take a step back. We still have some good and experienced partners here; nobody with the depth as Bob, although [Gustavus] Taylor has been in the industry for 27 years. We decided to fill in the bench rather than go out and find another senior partner. We have a very close and cohesive team, so we didn’t want to bring in somebody that already has their own operating philosophy. We took the approach that the rest of us would have to step up and step forward.

How has the culture changed?

Bob passed in 2002, and at the same time there seemed to be a lot of change occurring in the private equity industry itself. We were already beginning to address this change, and we were becoming more proactive in working with our portfolio companies and management teams. This may have been expedited by Bob’s passing… Being in our segment [in the lower middle market], we needed to develop more of a focused operating approach and bring in more resources, such as an operations expertise or global sourcing strategy. That’s not to say that this directly corresponded with Bob’s passing, but his death did coincide with the culture shift that was occurring at the time.

Did Bob Zobel’s passing result in any pause in deal activity?

We only did a few deals after he had passed, basically in the follow-on arena. The one thing that we did need to address was the communication with our investors. Many of our limited partners were brought in by Bob. We had to communicate to those investors and others what the plan was going to be. We were as open and forthright as possible, because we wanted them to know what was happening… The investors have been very supportive.

Now Facilitator is nearing the end of its investment cycle. How will your strategy change in regards to fundraising?

As an SBIC, we deal with a lot of banks as investors so from that perspective there are some perks with this strategy. We intend to go back to the cornerstone investors and head back into the market from there. We may end up being more institutional in the future. We had a few institutions in the last fund but also had a lot of individuals.

Facilitator is based in Milwaukee. Aside from the strategic reasons, why is Milwaukee a good location for the pros at Facilitator?

We all have athletic and sportsman type of backgrounds, so we enjoy the fact that we’re close to the hunting and fishing in the area, and we’re all fans of the [Milwaukee] Brewers and the [Milwaukee] Bucks, and Lambeau isn’t too far away. Plus, we’re all very family-oriented, and Milwaukee is one of those “big” little cities. It’s a fairly short drive from the city to a comfortable location with some wooded surroundings, which is nice for raising families.