The following series features interviews with Black dealmakers and trailblazers in the private equity and finance community. To help us spotlight professionals making a difference in their career pathways, please email Greg Kilpatrick at [email protected] and Gerald Thomas at [email protected].
Q: What attracted you to PE?
Philip Reeves: I was introduced to PE at Morehouse College. There was a guest professor named Richard Thaler. At the time, he was a vice chairman of Deutsche Bank. He came to Morehouse to take a select group of finance majors through a private equity-specific class and experience. He would bring in executives from some of the bigger PE firms to speak to the students.
This was my first time getting an up-close look at PE. I found it fascinating. It’s investing. It’s people. It’s dynamic. I’m intellectually curious, so the chance to go into different industries, learn about different business models and think about different geographies was incredibly interesting and appealing to me. I think these qualities are what keep me animated in this work. I love the idea of business. In PE, you get the chance to do that day in, day out.
Q: How are you working to distinguish your PE firm?
PR: We’re the only team I know of in the country that’s asking, “How do we help a company become owned by the employees who work there and know it best?” I think this is unique. If you’re a business owner today, you probably think your options for selling your business are to sell it to a competitor or a PE firm or give it to your children. We try to give them a fourth option, that you can sell it to your employees, and we can help you do it in such a way that the sale is on par with PE or a strategic buyer in terms of price, ease, timeline and other important factors. We call these “employee-led buyouts” or ELBOs.
I think what makes us hyper-unique is we only do this work with companies that have high concentrations of people of color in the workforce — one-third or greater — so that by proxy of getting ownership of that business, they’re getting a chance to close the racial wealth gap that exists in America.
Our vision is that, by helping with such transactions, we can put more companies in the hands of working folks and help reinvigorate and rebuild the middle class. We sometimes say we are putting “equity” back in PE.
Q: Why is it important for more Black professionals to pursue entrepreneurship?
PR: The power of entrepreneurship is undeniable. The ability to build value for yourself and your family is huge. That’s the American dream. Because of the work we do, we help realize that for working folks.
It’s very difficult to get ahead, particularly now. Traditionally, the way to build wealth in America is through either homeownership or business ownership, and homeownership is getting harder and harder for most folks. Business ownership is also exceptionally hard. The entrepreneurs you hear or read about have usually beaten every single odd.
For our firm, we want to find a way for someone who may not have been an entrepreneur in the traditional sense to get the benefit of entrepreneurship, i.e., the equity value of entrepreneurship by getting a stake in the business where they work. Silicon Valley firms have been sharing stock with their employees for decades and look at the wealth created there. We want to bring those same wealth-building opportunities to Main Street firms and especially to workers of color.
I think it’s fortunate for me that, with Apis & Heritage Capital, I get to use entrepreneurship and PE in ways that benefit my community and people of color more broadly and low-income workers generally. We get to take all the power of PE — the capabilities behind it and the ability to grow a business — and have those benefits accrue, not to a single owner or small set of investors, but to the employees who helped build that business in the first place. That’s a special role and job for me.
Q: How do you believe Black professionals will be able to influence the PE industry?
PR: What fascinates me about this time in PE is it seems a lot of talented professionals of color have the opportunity to get to the table. I think that’s phenomenal. As a young group of business builders, we have the opportunity to carve our own path in the industry. That’s part of why I think it’s so important to get more Black, women and other diverse leaders into the industry because they will be creating many of the new franchises.
When I speak to other emerging managers in the industry, everyone’s so collaborative. They’ll share things like who they’re using for back-office providers and thoughts around potential investor introductions. It seems like a great moment in time. It’s been proven that investors achieve stronger returns when making allocations to new managers who are generating real alpha with diversified strategies, and I hope people get a chance to build the track records they need to grow into large platforms.
Q: What is a goal your firm has set for the near future?
PR: We aspire to impact as many families as possible. The question I think about is, “Can we transfer a billion dollars of wealth into the hands of working folks?” That’s just us continuing to get better at what we do, continuing to achieve the level of returns we want and demonstrating to the capital markets that our model of investing works from a financial standpoint and has enormous wealth-building benefits for families across the country. We also hope that building strong local companies that are owned by the employees — which 40 years of data show to be more profitable, productive and resilient than peers — will be an important way for our smaller cities and rural communities to retain great anchor employers and enterprises.
About Philip Reeves
Philip Reeves is a founding partner at Apis & Heritage Capital Partners, a mezzanine debt PE fund that preserves legacies for founders, delivers impact and returns for investors, and builds wealth for workers of color using employee ownership. He is a seasoned entrepreneur and business leader with a background in business development, mergers and acquisitions, corporate finance and executive management.
Previously, Reeves partnered with 1863 Ventures, where he led an industry-agnostic program focused on scaling new majority businesses through operational improvements, sustainable sales processes, human capital best practices and financial management. His background includes serving as the manager of small business technology and innovation for the government of the District of Columbia and working in corporate development for a growing government contractor, where he was responsible for mergers and acquisitions, strategic partnerships and business development. Reeves began his career in PE at Lehman Brothers.
Reeves is the former president (curator) of the World Economic Forum’s Global Shapers Washington, D.C., hub and a Phi Beta Kappa graduate of Morehouse College.