The Color of Money is the classic 1986 Martin Scorsese-directed movie about pool hustlers starring Paul Newman and Tom Cruise. The theme of the movie is that Paul Newman as the mentor “Fast” Eddie is a pool hustler who decides to take on Tom Cruise “Vince” as a pupil, but ultimately decides he still has what it takes to compete. Flash forward to modern day ABL and you could write the script for Color of Money part 2. Today’s leaders in ABL and broader commercial finance who cut their teeth as leaders twenty years ago in the late 90’s and early 2000s are not ready to retire or stop competing. These were the 30 and 40 year old rising stars in the late 90’s and are running the industry today. The world has changed and many of these leaders feel invigorated to keep competing.
Just look around at today’s ABL power brokers and look at when they came of age. These same folks are now in their 50s and 60s and are simply having too much fun to retire or pass the reigns. They are at the top of their game, having too much fun and working with their friends. The late 1990s and early 2000s arguably produced the best ABL talent around at the dawn of the industry. Today’s modern day ABL world was formed in a matter of a few years as firms such as Foothill, Fleet, Heller and Congress, among many others, became part of modern day Wells Fargo, Bank of America and GE (prior to sale to Wells). This list goes on, but today’s leaders emerged from this generation and have now trained a generation of ABL executives who are now in their 30s and 40s and ready to take over. Whether you work at a bank or non-bank ABL this leadership dynamic persists and will continue to persist until there is a full leadership turnover. The next group of leaders will usher the industry into a new era of change.
The game has changed greatly, but the players remain the same although with more assets than ever before and probably more stress than ever before. There is a real healthy tension going between and among the folks who were at the dawn of modern day ABL when ABLs were paid for the risk compared to today. You have an entire new generation waiting to takeover who are now in their 30s and 40s and are coming of age as executives at time of industry maturation. So you have the folks who were the real entrepreneurs who trained the next group of leaders who came of age during an industry maturation process. To that end, modern day ABL whether bank or non-bank has never been harder as the risk has never been higher and the rates have never been lower. It’s making for an exciting time to be in the industry as the next twenty years should amount to an equal amount of change, but we are still in the present.
There are two sets of executives in ABL today: 1. The group that is currently in charge and who came to power 20 years ago and 2. The next generation that started under today’s leadership group. It’s no secret there is a group of executives ready to take leadership and guide the industry through the next iteration of consolidation and change. What makes this so interesting as some of this is happening now at both the bank and non-bank side so there is a mix of folks. Where we go from here is anybody’s guess, but right now today’s leaders are here to stay and guide us through what is sure to be another interesting cycle. The difference between this and other cycles is that you have an entirely new generation ready and waiting to take the reigns.
Paul Newman famously proclaimed “I’m Back” in the final scene of The Color of Money when he challenged Tom Cruise, his star pupil to a final game. Maybe he should have said, “I’m here to stay as I still got it”.
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