Tracy Britt Cool on Building a Mini-Berkshire Empire of Her Own
Photo by Andrew Neel on Unsplash
Tracy Britt Cool is a former Berkshire Hathaway executive who trained under Warren Buffet. Ms. Britt Cool has garnered success building her own mini-Berkshire empire. Her investment firm has successfully replicated Warrant Buffet’s business model for midsize companies.
Nearly a decade after leaving Berkshire Hathaway, the 37-year-old has made a name for herself. Ms. Britt Cool began working for Mr. Buffet when she was 25 years old. Straight out of Harvard Business School, she performed financial research and accompanied the acclaimed CEO to meetings.
Her talent was quickly recognized, and Warren Buffet served as an invaluable mentor. Five years after joining Berkshire Hathaway, Ms. Britt Cool became CEO of Pampered Chef, a kitchen tools line and subsidiary of Berkshire Hathaway. During her tenure at Berkshire, she chaired four of the conglomerate’s subsidiaries.
Britt Cool Focuses on Midsize Businesses
Citing a desire to focus on midsize businesses, she launched her own firm, called Kanbrick, in 2020. Kanbrick is a long-term investment partnership based in Chicago.
“I want to build a long-term platform and a long-term vehicle to acquire and build businesses,” she said. “There are companies that I think there’s a lot of value in helping them get to the next level, but they’re too small for Berkshire.”
While the lessons from her Berkshire days inform the way she operates, Kanbrick is distinguishable from Berkshire in two fundamental ways. The first is size. Kanbrick partners with many smaller-sized businesses Berkshire would simply pass on. The second dimension is the level of involvement with day-to-day business. Kanbrick takes a significantly more hands-on approach to assisting the small businesses in its portfolio.
“Berkshire needs multibillion-dollar acquisitions to move the needle,” she stated. “So many of the people who contact us or reach out would want to sell to Berkshire, but they’re just too small.”
Life Experiences and Training Influence Cofounder’s Perspective
Ms. Britt Cool grew up in a small, rural town in the Midwest and has a unique eye for spotting talented small businesses. She has gained perspective both from her life experiences and training at Berkshire to identify patterns.
“What I found is that most midsize companies struggle with the same things: how to hire the right people, how to develop them, how to incentivize them, how to help them to grow, how to build a strategy,” Ms. Britt Cool noted. “So what we did is we built a business system to help in those areas, and that really allowed us to create value with companies.”
A Successful Investment Strategy
Ms. Britt Cool’s investment firm typically holds stakes in businesses for longer time horizons than traditional private equity. She is cautious of following investment trends that have attracted the near-term enthusiasm of crowds. Rather, her investment firm analyzes the business fundamentals, such as the amount of cash a business is producing.
“A lot of families and founders don’t want to sell to traditional private equity. They don’t want to see their business bought and sold or chopped up or their employees fired,” Ms. Britt Cool observed. “We could provide them a longer-term home, and help them build in the right way.”
Britt Cool Knows Her Limits
One way Kanbrick keeps investment strategy successful is by finding opportunities within its areas of industry expertise. Ms. Britt Cool knows the limitations of her investment experiences. Thus, Kanbrick primarily plays in consumer, industrial, and business services. It avoids industries it is not knowledgeable of, such as real estate and biotech. In terms of geographic focus, Kanbrick looks for investment opportunities within North America.
Kanbrick is funded by a combination of its own capital and capital raised from a small group of partner-investors.
Beating the market consistently, like her mentor Warren Buffet, is hard to pull off, even for the best professional investors. Ms. Britt Cool learned several critical lessons at Berkshire from serving in a variety of operational and investment roles. But she said she finds it challenging to pin down the most important lesson.
“It’s hard to distill it down because there are so many lessons from my time at Berkshire and working closely with Warren over 10 years. I think just the power of long term, the power of finding high-quality businesses and the power of partnering with high-quality people. When those three things are done in the right way, you can build something really amazing.”