Phil Canfield joined GTCR in 1992. He is currently a managing director and co-head of the TMT group. Canfield holds an MBA from the University of Chicago and a BBA in finance from the University of Texas.
You gifted $20 million to the Business Honors Program at the McCombs School of Business at UT Austin.
I’ve already paid out $6 million. [It’s] a small program of the overall undergrad business school. There are 120 kids per class. I was fortunate enough to have been selected for that program when I was at UT. I really got a tremendous education [and] understanding of how companies work, their income statements, the cash flow statements and how to layer on financial modeling on top of that. That was a tremendous foundation for becoming a private equity investor.
[I] was very fortunate that I was a resident in the state, so I could go on in-state tuition. It was very affordable. It still is [but has] gone up a fair bit. [The program] is very highly regarded in Texas. Outside of Texas [lots of people haven’t] heard about it or don’t understand how strong the program is. Part of the gift is to provide scholarship and help [the school] compete for the very best students across the nation.
How did the undergrad program prepare you for business school?
I went to the University of Chicago business school, which had an incredibly flexible program. It had lots of accounting and finance. I went straight to taking advanced accounting, M&A accounting, tax, classes in law school, structuring an M&A transaction, and classes in labor law. If I hadn’t had that business-honors program, I would’ve had to spend my first year in accounting. I was able to get into higher level classes, given I already spent five years in investment banking and GTCR.
Many PE executives are making donations like this. What’s the reasoning behind it?
They understand the impact in their life that education had on their opportunities. They’re investors at heart. When you are looking at making a gift, it’s hard not to think about it from an investment perspective. How will you make the most impact, get the most bang for buck? Think about the life a student will have led [because of education] and how it impacts them and family, and the community around them. It’s hard to imagine a better ROI around your philanthropic dollars.
I’m told business school is no longer a feeder for PE. Do you agree?
Different firms have different approaches. Right now, the private equity business is growing so rapidly and becoming such a large part of the overall investment community that there is a real dearth of talent. Because of that, a lot of firms are saying once you find a good person, you don’t want to let them go. … They don’t want to lose two years of productivity while they’re in b-school and not working for us. I would view that as a bit shortsighted.
There is tremendous value [gained] going to graduate business school. There’s value in networking and meeting people…you meet people that ran or worked in parts of businesses that are similar to parts of business you are in. Having their perspective, and understanding what it’s like to sit in their shoes, this makes people better investors in long run.
So business school is still worth the effort?
Yes, absolutely. Every time you have a bull market — which we’ve had for so long — every time that’s happened, this trend has [occurred] where people think “maybe I’ll skip.” … I saw it in the late 1990s, I saw it [from] 2006 to 2008, and now. People have paid so much. The bigger cost isn’t the tuition of business school, it’s the lost income from not working. I do in the long run think you make it back for sure.
Action Item: Contact Phil Canfield at +1 312-382-2200