Mno-Bmadsen may invest like a private equity firm, and even use all the buzzy words that PE executives do, but the tribal office, which represents the investments of the Pokagon Band of Potawatomi Indians of Michigan, doesn’t consider itself a buyout shop.
“We buy, hold and grow companies,” said Troy Clay, Mno-Bmandsen’s president and CEO. ‘That’s essentially what we do. We look for companies that are priced fairly.”
Mno-Bmadsen, pronounced “meh no-buh MOD sen,” is the non-gaming arm of the Pokagon Band of Potawatomi Indians. The federally recognized Indian tribe, located about two hours east of Chicago in Dowagiac, Michigan, is known for its casinos.
The Pokagon Band of Potawatomi owns and operates the Four Winds Casino Resort in New Buffalo, Michigan, along with two other casinos in the state and one in South Bend, Indiana.
The tribal council provides funding for Mno, Clay said. It invests in companies in services, construction, manufacturing and commercial real estate.
“Mno-Bmadsen means ‘good path’ or ‘good direction,’” said Clay, who is also a tribal citizen. “We have that in our heritage, and our values are very strong. … Everything we do is recognizing the hard work of our ancestors.”
The tribal office, Clay said, does not work with partners or employees who don’t adhere to its core principles and values.
Launched in 2012, Mno-Bmadsen has six platform investments, including Seven Generations Architecture & Engineering, D.A. Dodd, WBK Engineering, Mno-Drek, Bent Tree Market and Red Tail Properties.
Mno wants to buy companies in the construction space, he said.
The investment firm does platforms and bolt-on deals, buying companies “upwards of $25 million to $30 million,” Clay said.
It typically buys majority stakes, investing from $4 million equity to $10 million equity per deal. Mno targets companies that are “looking for a fair price” and may have succession issues, he said.
“They want someone like us to buy it because we’re going to hold onto it, hold onto the staff there,” Clay said.
Investments are determined by Clay and Julio Martinez, Mno’s CFO. (Clay is former acting treasurer of Pokagon Gaming Authority, which oversees Four Winds Casino Resort, while Martinez is the former CFO of tribes in Florida and Oregon.)
“If we find an opportunity that exceeds our parameters, we can go to the tribal council and get additional equity funding,” Clay said.
Though it sounds like private equity, Mno-Bmadsen does not have a fund and uses its balance sheet to buy, Clay said.
“We’re more like a family office,” he said. Mno-Bmadsen has also never sold one of its investments, another distinction from PE.
“The difference between us and private equity is that we are focused on holding and growing [companies],” he said.
Like PE, Mno-Bmadsen uses dividends to make back its investment, Clay said.
By 2020, Clay predicts that revenue for Mno-Bmadsen’s portfolio of companies will hit $100 million, up from $85 million in 2017.
Correction: A prior version of this story stated that Mno gets a “small amount” of funding from gaming. This is inaccurate. In fact, Mno gets its funding from the tribal council. The story has been changed.
Action Item: Email Troy Clay at email@example.com