Advice

Take 10 With Andy Schwartz

Meet Andy Schwartz, a managing director in Investment Banking. As a seasoned banker, Andy shares the exciting things happening in his sector of coverage, his advice to those who are early in their careers and how he applied the quote “With great risk comes great reward” to the biggest challenge of his career.

1. You joined Raymond James just as the world went into lockdown due to the COVID-19 pandemic. How was it adjusting to a new platform in this time?

The early part of the COVID-19 pandemic was an opportune time to join Raymond James. Our longtime clients were looking for the advice of advisors they could trust to navigate the new and uncertain environment. We used this time to share ideas and perspectives with private equity funds, management teams and corporate clients, many of whom are current or former clients today.

2. You co-head the Commercial & Industrial Services Investment Banking group. Give us a few interesting updates in your subsectors.

The commercial and industrial services sector has remained relatively resilient despite recent macroeconomic conditions, such as rising inflation, increased interest rates, and labor and supply chain shortages. We are keeping a close eye on investor sentiment and the financial performance of companies in our sector – but, in large part, companies continue to exhibit strong revenue and earnings growth this year. The most noticeable headwind we routinely see in our sector remains the shortage of high-quality, skilled labor, which companies have been forced to adapt to for at least the past year with innovative approaches to attracting and retaining talent. Nevertheless, despite the uncertainty hanging over the market, “A assets” that have proven an ability to grow regardless of market conditions, or those providing mission-critical services that are truly nondiscretionary or nondeferrable, continue to garner significant buyer interest and trade at premium valuations.

Across each of our subsectors, there remains significant focus on environmental, social and governance (ESG) factors. More than ever, we are emphasizing in our buyer discussions and marketing materials how our clients have, and will continue to, address each of the ESG components individually, with data and specificity.

3. What excites you about your coverage space, and where do you see the potential?

Commercial and industrial services – relative to most sectors in the economy – performed incredibly well since COVID-19 began.

Certain companies in the facility services market, for instance, have exhibited tremendous growth in recent years, both organically and through consolidation strategies. Notably, we’ve observed businesses in the fire and life safety, HVAC/plumbing/refrigeration, landscaping, elevator services and industrial cleaning markets that provide recurring, small-ticket maintenance and repair work achieve outsized growth and margins. Similarly, we continue to see the residential services market as an attractive category of facility services, with private equity funds clamoring for assets in HVAC and plumbing, pest control, home repair, and renovation and restoration services in particular. In the waste and environmental services sector, there remains significant potential in both solid and specialty waste, as well as in certain aspects of recycling. And, finally, in utilities and infrastructure services, investors should continue to find opportunities to invest behind ever-changing and more stringent regulatory requirements and increased funding to upgrade and repair critical infrastructure.

4. For junior bankers, how would you best describe the path to becoming a managing director?

I have four main pieces of advice for those who are early in their investment banking careers:

• Seek to develop true sector expertise and perspective that you can share with clients and prospective clients, as well as with your colleagues. Stay current on what’s going on in your space.
• Develop a strong network with private company executives, corporate leaders and private equity investors. The relationships you build early in your career will undoubtedly benefit you in the long term.
• Be a “fly on the wall.” Sit in on as many meetings and calls as you can to observe and learn.
• Routinely provide leverage to those you work for and demonstrate you are capable of playing their role in their absence.

5. What has been the most impactful or surprising moment of your career?

The most impactful moment of my career was the global financial crisis of 2008 to 2009. I was in business school at the time and had the opportunity to observe and assess the financial markets, certain sectors, individual companies and specific managers from the outside looking in. I learned a lot about how to build and manage businesses for long-term sustainable value, as well as develop scenarios for withstanding shocks. To this day, I still use a lot of the lessons and observations I picked up during the crisis when advising clients.

6. What has been your biggest career challenge, and how did you navigate your way through it?

Making the decision to leave my former position and join Raymond James during such a volatile time was a tough decision and a big risk, but it was time for a new challenge. Raymond James offered me a tremendous opportunity to join a talented team of investment bankers with a clear vision for future growth. With great risk comes great reward, and joining the Raymond James team has been one of the more rewarding chapters in my career.

7. Tell us about your style in advising clients – what is the Andy Schwartz way?

Our clients want to know that we truly understand their businesses and sectors and will be aggressive advocates for their vision and growth strategy. We share in our clients’ excitement for their businesses and take that passion to the market. My team and I pride ourselves on developing a thorough understanding of what’s driving performance and looking around the corner for potential challenges. Similarly, our clients value our honest, transparent approach and creativity in solving issues.

8. How do you see the landscape of investment banking changing post-pandemic in relation to the commercial and industrial services sector?

The current environment is really testing companies’ ability to attract and retain talent, and that pressure seemingly isn’t subsiding for the foreseeable future. In the business services space, companies win and lose on their ability to find reliable, skilled and safe field-level personnel. As advisors, to drive value and interest in the companies we advise on, we need to continuously demonstrate how our clients differentiate in this regard. In the coming years, companies will be forced to develop new and innovative ways to alleviate this concern and scale their businesses.

9. What’s one piece of advice you’ve received in your career that has stuck with you?

Early in my career an experienced investment banking colleague gave me a sound piece of advice – ask for forgiveness, not for permission. To serve our clients most effectively – and to be most efficient with our clients’ and team members’ time – we need to make thoughtful and deliberate judgment calls. If you rely on your solid training, act with integrity and transparency and exhibit resourcefulness, you’re not likely to go wrong.

10. Lastly, tell us some non-career related fun facts about yourself!

My wife and I have three boys who have a wide variety of interests – everything from playing sports to theater and the arts. When I’m not chasing our kids around, I enjoy spending time with family and friends, traveling, going for a good run and watching University of Michigan sports.