IrishCentral asked Bluff Point Associates Co-Founder Thomas E. McInerney for some career advice for young Irish executives.
McInerney has had an interesting and varied career that started out in banking and spanned information systems, aviation, entrepreneur and private equity. He retired from private equity giant Welsh, Carson, Anderson & Stowe after 24 years where he ended up as a senior partner. He is the co-founder of Bluff Point Associates with his wife Paula and is a major philanthropist.
Thomas McInerney’s career began as a junior employee in Citicorp Bank where he spent five years. While he was working there he attended night school to get his BA from St. John’s, where he has served as Chairman of the Board of Trustees since 2006. McInerney has also been awarded the University Gold Medal, the highest alumni award from St. John's.
“When I was at Citicorp Bank my week was like this: 5 days in the bank, going to St. John’s at night, 3-4 nights per week?? Also had a sideline mail order business that sold historical medals with my father-in-law. I was on a busy treadmill; we had a small baby as well at this time.”
McInerney left Citicorp to work in American Airlines where he spent one year. By his own admission this wasn’t a great fit for him, it was a very bureaucratic organization. Following this he joined the American Stock Exchange where he worked for five years ending up as Senior Vice President Operations and Technology.
Following this he moved to ADP, the largest payroll processing company in the US, where he served as President of the Brokerage Services Division and as Group Vice President of ADP’s Financial Industry Services. According to McInerney, ADP was like a boot-camp for guys who went on to manage at a senior level in other companies. He stresses none of this was part of a grand plan that he had for his career, each move was rather serendipitous. At this stage he was 46 and had reached a very senior level and was working as an operations guy.
“I had a grand vision to be successful, I ended up as the number 3 guy in ADP, but I wanted to do something myself, to start something.” So with a few people he founded Dama Telecommunications Corp. He spent 4 years building that company. “Starting my own company was really educational. I learned so much while raising venture capital, both good and bad.”
In 1986 McInerney joined Welsh, Carson, Anderson & Stowe a private equity firm that invests large amounts in more mature businesses. Welsh Carson invested in computer services/information services and healthcare companies. “I spent 24 years with the firm, ended up as a senior partner and at the end of 2010 retired and started investing some of my family’s wealth in earlier stage investments.”
He co-founded Bluff Point Associates with his wife Paula and, to date, they have invested in 17 companies, three of which have been sold in the last three years.
“I take a holistic approach to investing in a company. Why this company, what are its strengths and weaknesses? Is their application better than the competition? What is the size of the market? Management team counts the most, you need people who will figure it out. Basically I look for a great application and great management.”
At Bluff Point McInerney and his team look at investments in companies with between $5 and $20 million in annual revenue operating in the information services, financial services or the healthcare space. This is a big change from his private equity days where typical companies would have between $50 – 700 million in annual revenue. His current investments are on a smaller scale.
What are some things to look out for?
McInerney believes voice recognition is a technology to watch out for as it develops – anything that makes getting data into systems easier and more efficient as this is a hugely time consuming process. This is an interesting space. Social media is a rapidly growing and volatile sector with big winners and big losers occurring every month. McInerney also believes that the IT or technology industry is somewhat immune to cycles unlike hotel, travel or manufacturing industries.
What are the US Competitive Advantages:
The US built this "can do" attitude like no other place on earth, according to McInerney. Coupled with this is a superb education system here, hundreds of very high quality institutions. “People all over the world send their kids to the US to be educated.”
On the issue of immigration he is practical and succinct.“We need to make sure we remain a welcoming home to immigrants, especially those with skills we need. Perhaps some of our immigration laws could be relaxed, particularly for skilled immigrants.”
McInerney concludes by saying, “The basic economy in the US is still the largest and most developed in the world. It’s going to stay that way for the foreseeable future. Per capita this is the most vibrant economy. Even if China’s total economy outgrows the US over time, its per capita income has a lot of catching up to do before hitting US numbers.”