We recently welcomed Tim Scallen to the BSC team as managing partner, leading BSC Capital Partners to build our direct investing capability and expand on our momentum in investing in differentiated middle-market companies. With a focus on payer, provider, and tech verticals, our growing platform is aligned to assist management teams to augment strategies and expand their growth opportunities.
Most recently a principal at Triple Tree’s TT Capital Partners, Tim has over a decade of experience in portfolio management, fundraising, and deal execution. His sector focus has been across the healthcare tech and information analytics sectors, which is a perfect complement to BSCCP’s investing criteria.
We sat down with Tim and asked him some questions about himself and the reasons behind his decision to not only join the BSC team, but to relocate to Nashville:
Tell us a little bit about yourself and your motivation behind this career move.
I am a native of Minnesota, a graduate of Notre Dame, and have spent the last 9 years living in Minneapolis. I have spent my career in private equity and financial services and while I’ve focused on growth and middle-market stage companies in the healthcare and technology verticals for the past six years, I’ve also had the benefit of investing across multiple industries and asset classes earlier in my career.
Investing in growth and middle market stage businesses has become a real passion of mine. I’ve found that companies, as well as management teams, in these spaces tend to be incredibly resourceful, innovative, and nimble—ideal attributes for businesses that can benefit most from having a private equity partner. Additionally, you frequently find that businesses looking to raise capital in this part of the market are placing an equal, if not greater, emphasis on who they are selecting as an investment firm, not just on the headline valuation or size of the check. It’s no secret that private market investing has gotten more competitive over the last 10 years—often I see the same handful of firms competing for the same investment opportunities, so when you can compete and win a deal on your reputation and ability to add value, as opposed to just purely on price, the game changes. As an investor, this is a lot easier said than done, but it isn’t rocket science either—I joke, having spent so many years in Minnesota, that it’s applying “midwestern values” to every decision you make—doing what you say, working harder than everyone else, and treating people fairly and with respect.
In my own career, I know I’ve achieved this goal when the CEOs I work with tell me they “want” to call me when there is a problem, rather than feeling they “need” to call me with a problem. It’s a subtle, but important nuance that speaks to the depth of a partnership, and the ability to drive sustainable growth for a business. This doesn’t mean that you have to agree on everything (more often than not, you don’t!), but it does mean that, as an investor or a board member, you are willing to roll up your sleeves, dig into the details, and align with a management team on a strategy and execution plan to successfully grow a business—and then commit to that strategy as the inevitable challenges arise. Simply put, showing up to board meetings four times a year doesn’t cut it!
Doing this effectively requires a focused and disciplined investment strategy coupled with deep domain expertise and an ability to provide real-time insights. As I’ve gotten to know more of what Jeff and Jack have built at Bailey Southwell over the past 15 years, I’ve seen a number of these themes emerge, especially when talking to their former clients and existing management teams of their five portfolio investments. For me, this was a key part of deciding to join the team, and I see a very natural opportunity to successfully scale the BSC investment strategy while also elevating the overall brand reputation of the entire platform.
What is it about the Bailey Southwell platform and culture that prompted you to join the firm?
Culture is incredibly important—I’ve been fortunate, particularly early in my career, to have worked for a number of great investors and leaders who have since become mentors and friends. Their influence and guidance have been instrumental to my professional growth, and I strive every day to make sure I am continuing to give back to others’ careers.
I’ve known Jeff for many years, but only recently had an opportunity to get to know his brother Jack and the rest of the senior team at the firm. What stuck out to me was a consistent commitment to success and growth, but more importantly a sense of humility that good entrepreneurs have. As I’ve spent more time in Nashville, the reputation BSC has built speaks for itself, and I’m excited about the potential that creates to continue to build something unique. Playing the “long game” in investment banking is, unfortunately, the exception not the rule, and I’ve seen several examples where the team at BSC has continued to cultivate relationships well past the time their formal client and advisor relationship is over. The strength of this foundation will be key as we collectively work to grow the firm.
And for me, there is also a desire to help BSC to continue to grow and expand where they are spending time. Since my background is in private equity and their backgrounds are rooted in investment banking, joining the team is a nice fit in terms of where I’ve been spending a lot of my time historically and where BSC wants to go—which is what creates an opportunity to work hard and have a lot of fun at the same time.
What drove you to pursue a career in portfolio management, fundraising, and deal execution, and more importantly, what keeps you here?
I was always fascinated by the M&A markets growing up. My dad was a corporate lawyer, so I got to see some of that firsthand as a child. My interest was solidified during my time at Notre Dame’s undergrad business school. Then, beginning my career during the financial collapse of the late 2000s was actually one of the best things that could have happened—I learned a lot of hard lessons early on as I was exposed to many challenging investment situations that, in many cases, turned out to be successes largely due to the persistence and dedication of management teams, investors, and often lenders working together to solve big problems. As the markets improved, I found that having built a reputation for being a hard worker and consistently doing the right thing was a real differentiator – and have never forgotten it.
No two days are alike in this business, and, while I’ve had a lot of long days and nights, I’ve never been bored. I love the fact that I’m able to work around smart people, see new and novel ideas every day, and be able to have a meaningful impact on how a company or an idea gets translated into reality. There’s no greater feeling than seeing the look on an entrepreneur’s face when you help them through a successful sale of their business, or when you can deliver a great financial return back to an LP.
An added benefit of focusing on healthcare is that, without a pure medical background, I am able to channel my skillsets towards businesses that have been built to help tackle some of the biggest challenges facing the US healthcare system today.
Why do you think now is a good time to bolster the firms’ PE fund strategy given the pandemic and economic uncertainty?
As someone that’s relocating across the country during a period where travel is challenging, this is a great question!
Reflecting on both my own experiences investing in the last downturn and looking at the data over the last 50 or 60 years, anytime there’s a significant period of market dislocation or uncertainty, it becomes a fantastic opportunity to invest in and financially back great companies, great ideas, and great entrepreneurs. Some of the best companies have been built during periods of turmoil – Disney was incorporated during the Great Depression, Uber was founded during the financial crisis of 2008, the list goes on…
But more importantly, and I’ll fully admit that in every period of uncertainty folks will say “this time is different,” I do feel that there are several unique elements to the challenges we’re seeing in 2020 that are going to have long-lasting impacts across many industries. The most obvious example is the ability of companies to decentralize their workforces and continue to operate in a virtual environment. A more nuanced example is how restaurants have changed operating protocols to reduce risk and improve the dining experience – QR codes for menus, streamlined payment methods, etc. The common dynamic between both of these is the use of technology to change how we go about our daily lives, and, while we are likely to see some “reversion to the mean” once the acuity of the pandemic has passed, the technology has now ‘proved’ it can work to drive real change and solve problems in ways we may have been skeptical of previously.
If you unpack this and apply it to the industries we focus on at BSC (healthcare technology, payer services, healthcare services, and tech-enabled services) we see an incredible opportunity to partner with businesses that are experiencing a ‘shortened adoption curve’ for new or novel approaches to changing service delivery, increasing automation, or reducing risk. As a result, I think now and throughout the next several years we are going to see a great time to put money to work through what we’re building at BSC Capital Partners.
How do you feel about relocating to Nashville, otherwise known as the Music City?
Nashville is a growing and vibrant town, but this is bittersweet as I leave the Midwest where I have strong roots and great family and friends. Although I won’t lie, my wife (a Texas native) is thrilled with the fact she’ll never need to deal with me complaining about having to shovel snow or deal with frozen pipes again!
As an avid boater and someone that enjoys spending time outdoors, my wife and I are looking forward to the fact that there’s a combination of great country music (which we love) as well as great mountains and outdoor activities to enjoy for more than the short three month summers that I am used to living in the Midwest.
We invite you to reach out to Tim directly to discuss opportunities in BSCCP’s areas of focus > [email protected]