the main points
Tracy Britt Cole has been busy acquiring mid-sized companies — companies that are too small for her old boss Warren Buffett at Berkshire Hathaway — and now she wants to build a close-knit community for these small companies. The 39-year-old investor went into business on her own in 2020 after working for Buffett for a decade. Her private equity firm, Canbrick, based in Charlotte and Nashville, noting her background in Kansas and promoting businesses “brick by brick,” focuses on companies with $5 million to $50 million in earnings before interest and taxes, in industries ranging from consumer to industrial. To business services. Cool is a co-founder with partner Brian Humphrey. Kanbrick hasn't said how much money it has under management, though earlier this month it announced raising $220 million in new capital. Cool's investment criteria look very similar to Buffett's, except on a much smaller scale: family or institutional ownership, with a competitive advantage and a long time horizon. In contrast to the Berkshire CEO's laissez-faire approach to running his companies, Cole is more hands-on, guiding the company's leaders through hiring and strategy development. “We want to be the trusted home for mid-sized companies,” Cole said in an interview. “There are accelerators for startups. But there aren't really many for mid-sized companies. CEOs and owners who really want to take their company to the next level often struggle to find the resources.” That's why she started a special community program where twice a year she brings together five outside executives to identify roadblocks and fine-tune their business strategies. The eight-week program already has 30 graduates and participants include the CEOs of Elite Roofing Supply, Ring Concierge and Evoc Medical. Kanbrick has not invested in any of the companies included in the program and there is no expectation of any investment as Cool stresses that medium-sized companies are usually not capital constrained. “We share a personal business system that we use at our companies. We dive with them into the topics they have and the issues they face in their business, and then we bring in guest speakers from outside. We share resources,” she said. The Buffett Effect Cole famously got a job with Buffett as his financial assistant by sending a letter to the “Oracle of Omaha” after graduating from Harvard Business School. She quickly moved up the ladder in the group and became CEO of Pampered Chef and served as president of Benjamin Moore and Oriental Trading Company, among other holdings. The move to eventually leave Berkshire came as a surprise to outsiders given that executives at the group tend to stay on forever. Cole declined to comment on her relationship with Buffett or her experience at Berkshire. However, Buffett, one of the world's biggest dealmakers with vast amounts of cash, has clearly left a mark on Cool in terms of its investment philosophy. Cole also writes an annual letter to her partners, discussing not only Canbreak's business but also the broader market environment. Kanbrick's largest deal is the purchase of JM Test Systems, a third-generation family business in Western Pennsylvania that calibrates industrial equipment for accuracy and safety. Cole declined to reveal the details of the deal. “It's the perfect acquisition for Kanbrick because they're a family that really wants to be involved, wants to continue to grow the company and really see the growth profile, but they want a partner that will help them take the business to the next level,” he said.
