Mergers and acquisitions, financial advising, fundraising — Dr. Clifford Lipscomb does just about everything as managing director of Bartow Street Capital
There's a very simple reason why Seattle-based Greenfield Advisors chose Cartersville as the site of its East Coast headquarters.
Because that's where Dr. Clifford Lipscomb wanted it.
"Our first office was in Smyrna. A couple of years later, we moved it here, and we moved it here because I live here," the 42-year-old said. "Cartersville is home. I was born and raised here and all my family's here. It just made sense to have an office here."
After completing his graduate program at Georgia Tech, he spent two years calculating gross domestic product for the United States Bureau of Economic Analysis in Washington, D.C. He then shifted to academia, where he worked as a business professor at Valdosta State University for about half a decade.
He started doing part-time work for Greenfield Advisors in 2007 and made the jump to full-time in 2009. Although he was asked to relocate to Seattle for the position, Lipscomb instead offered up "five or six good reasons" why the company should expand their operations on the other side of the country.
Clearly, Lipscomb put up a convincing argument. Today, he's still residing in Cartersville, where he serves as both vice chairman and co-managing director of Greenfield Advisors as well as the managing director of its investment bank subsidiary Bartow Street Capital — which, fittingly enough, is located inside the husk of the former Bank of America building at 102-A East Main St. in downtown Cartersville.
His parent company offers services in areas like litigation support and feasibility studies. "We serve as expert witnesses in lawsuits," he said. "And that could be lawsuits that deal with mortgage-backed securities, properties that have been environmentally contaminated and the occasional trade secret and patent infringement case."
And that includes some courtroom proceedings with incredibly high financial stakes, with not just millions but billions of dollars on the line.
"I think the biggest project in terms of financial impact has been all our work in the residential mortgage-backed securities space," he said. "We have worked on more than 50 different litigation matters in that space, and our clients have recovered well over $50 billion. Those cases are still ongoing, although they have slowed down somewhat."
The Bartow Street Capital subsidiary focuses primarily on raising capital, but Lipscomb said the boutique investment bank also assists clients in merger and acquisition transactions and provides financial advisory services.
The bank recently started a campaign to raise $150 million for Cartersville-based Horton Outdoor to expand their outdoor advertising operations — a fund with a minimum investment of $100,000 that is only open to "accredited investors," as defined by the United States Securities and Exchange Commission — and recently closed its first acquisition transaction, advising Marathon, Wisconsin-based County Materials Corp.'s acquisition of the real estate and manufacturing assets of Whitestown, Indiana-based Sanders Companies.
"Under the Bartow Street Capital umbrella, we have another one, a very recent engagement," Lipscomb said. "We are working with a company doing a retail-automotive rollup where he's assembling a bunch of automobile dealerships under one umbrella corporation — we're assisting him in looking for what's called a credit facility or a bridge loan."
That's in conjunction with Lipscomb's other investment activities — things like helping a potential hotelier in Seattle find a capital partner, locating a buyer for a 300-plus acre residential subdivision development outside of Austin, Texas, and helping a multifamily developer in Indiana find some limited partners to invest in apartment acquisitions.
"In a span of 15 minutes, I can touch two or three different projects," he said. "I can touch any number of issues related to running the firm or running a project day to day … it just depends on what fire needs to be put out at any given moment."
Lipscomb discussed the differences between raising capital for funds and companies.
"For funds, a lot of our relationships here are with wealthy family offices and some institutions, but we primarily have a focus on real estate," he said. "For individual companies, it depends on the need. We had a client not too long ago who was importing goods from China. They were looking for what's called a factoring agreement, where you borrow money based on accounts receivable. It's a little bit of a unique borrowing structure … there's a lot of folks in the Southeast who will lend on accounts receivable and invoices."
One of the things that makes Bartow Street Capital different from its competitors, Lipscomb said, is the level of "senior attention" customers receive.
"You get my time, I'm not going to put you off on a junior analyst or something like that, that you would see at a bigger investment bank," he said. "When we approach a product, we know the end product is going to be heavily scrutinized and we prepare our work to such a degree that it will withstand others' comments. That level of detail carries over to our investment banking work."
He said he would love to get involved in more merger and acquisitions activities.
"Part of it is just aligning yourself with the right people to source the deal," he said. "The other piece of it is just to make sure that you have a constant exposure to folks who might be looking for that service you can provide. That's why I spend a lot of time on the road, at conferences and just constantly increasing the network of folks so that someday, you might get a reference."
The type of financial advisory services Lipscomb provides, he said, differs from those of companies like Edward Jones, Raymond James and Wells Fargo — primarily, by placing an emphasis on business valuation.
"These are usually income-producing businesses that have demonstrated cash flows, and we'll use some version of a discounted cash flow model to come up with a value," he explained. "Now, a lot of times, what we're able to do is take what is called the income approach, and we'll match that up or marry that to the sales comparison approach and that will give us a way to bracket what we would say is the market value of either a business or a real estate asset."
Lipscomb said he'd also like to branch out into other sectors, particularly financial and property technologies — or, as they are commonly referred to within their respective industries, "fintechs" and "proptechs."
"I think it's fascinating what some companies are able to do with real estate data and some of the things we produce," he said.
As an expert with a keen eye for real estate trends, Lipscomb said the health of the market hinges on a key factor: what's the rate of wage growth compared to the rate of house price growth?
"I think you're starting to see a turn right now where there's a slight uptick in foreclosures last month ... that may be an anomaly but it may suggest an underlying issue that may be starting to rear its ugly head," he said.
Lipscomb said he's especially concerned by an "inventory gap" in what he sees as the "middle market" for housing — a situation that many analysts are already predicting to be a catalyst for another recession.
"When house price growth outstrips wage growth, housing just simply becomes unaffordable. If you bifurcate that further by price tiers, I think that's really where the story is — that's where you see where the price gap is," he said. "So how are you going to increase the housing stock to the point where that gap doesn't exist in the $100,000$-250,000 price range?"
As he goes through his daily doings, Lipscomb said he keeps the lessons of the Great Recession firmly in the back of his mind.
"With all of our work in the mortgage-backed securities space, there were some pretty special conditions that were in place that led to the financial crisis back in 2007-2008, which then resulted in all of this mortgage-backed securities work that we've seen that is just now — 10 years later — working its way through the system," he said.
"I don't want to see that happen again, but what it really comes down to is conveying to investors in mortgage-backed securities very clear, factual information in those securities prospectuses so that when an investor in the mortgage-backed securities makes a decision to invest, they're investing on the correct information."