Invest Like the Best with Patrick O'Shaughnessy

Episode: Graham Weaver - Building Alpine (EP.425)

Release Date: May 27, 2025

Introduction

In episode 425 of "Invest Like the Best," host Patrick O'Shaughnessy engages in an insightful conversation with Graham Weaver, the founder of Alpine Investors. The discussion delves into Alpine's unique approach to private equity, focusing on building and scaling businesses through innovative talent strategies and systematic management practices.

Background: Graham Weaver and Alpine Investors

Graham Weaver founded Alpine Investors to address a specific market inefficiency: acquiring established businesses approximately generating $20 million in revenue whose owners, often baby boomers, are looking to retire without clear succession plans. Alpine Investors specializes in purchasing these companies and installing young, dynamic leaders—typically 28-year-old military veterans and top MBA graduates—as CEOs. This strategy leverages over 25 years of Alpine's intellectual property on effectively running established businesses.

Notable Quote:

"Alpine focuses on the thousands of $20 million or so revenue businesses whose baby boomer owners want to retire but lack succession plans."
— Graham Weaver [04:19]

Alpine's Strategy: Targeting Market Inefficiency

Alpine Investors zeroes in on businesses that are ripe for acquisition due to their owners' imminent retirement. By targeting companies that have been successfully run but lack a succession plan, Alpine fills a crucial gap in the market. This approach not only ensures a steady pipeline of acquisition opportunities but also promotes the sustainability and growth of these businesses under new leadership.

Key Points:

• Market Focus: $20 million revenue businesses seeking succession.
• Leadership Installation: Young CEOs with fresh perspectives.
• Intellectual Property: Proven methodologies for managing established firms.

Talent Development: Installing Young CEOs

Central to Alpine's model is the development and placement of young CEOs who bring energy, modern management practices, and a willingness to drive significant change. These leaders often come from military backgrounds or prestigious MBA programs, providing them with discipline, strategic thinking, and leadership skills essential for transforming acquired businesses.

Notable Quote:

"Alpine buys companies and installs 28-year-old military veterans and top MBA graduates as CEOs, leveraging 25 years of intellectual property on how young executives can successfully run established businesses."
— Patrick O'Shaughnessy [04:19]

Building the Playbook: Systematizing Success

Alpine has meticulously developed a playbook that outlines the processes and strategies required to run a successful business. This playbook includes detailed guidelines on hiring, firing, having difficult conversations, and other granular aspects of leadership. By systematizing these practices, Alpine ensures consistency and excellence across all its portfolio companies.

Notable Quote:

"We've learned that we want to just play a winnable game and we're going to have a platform where you're going to win based on your talents and hiring and firing and all those things not missing on the industries."
— Graham Weaver [35:18]

Learning from Early Deals: Successes and Failures

Graham Weaver shares his early experiences in private equity, highlighting both successful acquisitions and significant missteps. One notable failure involved investing in a slot machine business that consumed considerable resources and posed ethical concerns. Conversely, a successful investment in a label printing business with Trader Joe's as a major client underscored the importance of understanding customer stability and effective management teams.

Key Lessons:

• Customer Underwriting: Assessing the stability and resilience of client bases.
• Management Evaluation: The critical role of strong, reliable leadership teams.
• Industry Alignment: Ensuring personal alignment with the core products or services of acquired businesses.

Notable Quote:

"For us, we think that incredible leaders, CEOs, management teams are going to create amazing results."
— Graham Weaver [30:59]

Raising Capital and Differentiation

Alpine Investors has successfully raised multiple funds, consistently achieving their objective of a 5x Multiple on Invested Capital (MOIC). This success is attributed to Alpine's distinct approach of focusing on talent and systematized management rather than competing in the saturated high-quality business acquisition market. By carving out a niche in "winnable games," Alpine avoids the intense bidding wars prevalent in larger markets, thereby enhancing their value proposition to investors.

Notable Quote:

"Our objective function is MOIC. We have a specific number we put on that we're trying to do 5x on a fund."
— Graham Weaver [30:47]

The Role of Personal Growth and Executive Coaching

Personal development and executive coaching play a pivotal role in Alpine's culture. Graham Weaver emphasizes the importance of personal growth, envisioning one's life path beyond conventional fears and limitations. Alpine integrates coaching into both their internal operations and their support structures for portfolio companies, fostering an environment where leaders can thrive and innovate.

Notable Quote:

"Personal growth is understanding what that intuition is telling you and spending the space and time to really understand what it's saying and getting out of your head, which is a lot of the time confusing things."
— Graham Weaver [71:23]

Alpine's Impact and Future Outlook

Alpine Investors has made significant strides in transforming small to mid-sized businesses by embedding strong leadership and fostering growth through systematic management. With a growing portfolio and a robust training program, Alpine continues to expand its influence in the private equity landscape. Looking ahead, Graham Weaver anticipates increased difficulty in securing high-quality deals due to market saturation and rising interest rates but remains optimistic about Alpine's differentiated approach positioning them for continued success.

Notable Quote:

"We've done 5x in our last four funds. We have it marked at 5x in our last three, and the fourth one is well on its way."
— Graham Weaver [30:59]

Conclusion

Graham Weaver's conversation with Patrick O'Shaughnessy provides a comprehensive look into Alpine Investors' innovative strategies in private equity. By prioritizing talent development, systematizing management practices, and maintaining a clear objective function, Alpine has carved out a distinctive position in the market. Their commitment to personal growth and long-term success underscores the company's enduring impact on the businesses they acquire and the leaders they cultivate.

Additional Resources:

• Alpine Investors: https://www.alpineinvestors.com
• Colossus Review: A quarterly publication with in-depth profiles of industry leaders. Subscribe at https://www.joincolossus.com

This summary encapsulates the key discussions and insights from episode 425 of "Invest Like the Best," featuring Graham Weaver and his journey with Alpine Investors. For a more detailed understanding, listening to the full episode is recommended.