Patrick Walsh (investor)

Patrick Walsh (born December 26, 1975) is an entrepreneur and investor in the United States. He is the founder and CEO of PW Partners, LLC, an investment management firm. Walsh is also the Chairman and Chief Executive of Town Sports International, a holding company that trades on the NASDAQ under the symbol CLUB.[1] Walsh is also a member of the Board of Directors of BJ's Restaurants[2] and Del Taco Restaurants.[3]

Early life and education

Walsh was born in San Diego, California, the eldest of three brothers. His father was in the U.S. Navy and his mother was a school teacher.

Patrick Walsh the 2018 EY Entrepreneur of the Year award winner in the New York region.

The Walsh family left California and moved to Boston, Massachusetts in 1977 and Walsh grew up in Foxboro, Massachusetts, the home of the New England Patriots. Walsh remains a die-hard Patriots fan to this day.[4] Walsh studied economics at Wesleyan University and played football and baseball[5][6] until he suffered a severe back injury playing football. He transferred to Boston College after his freshman year and graduated with a degree in accounting. After graduation, he earned the Chartered Financial Analyst designation.[7]

Early in his career, Walsh rejected the academic efficient-market theory and adhered instead to a philosophy of value investing. Walsh enrolled in the Value Investing Executive Program at Columbia Business School to study under Professor Bruce Greenwald, who carried on the teachings (albeit evolved) of Benjamin Graham, the father of value investing.[7]

Early business career

Walsh worked from 1998 to 2004 at Prudential Capital Group and Prudential Securities in real estate private equity and equity research; from 2004 to 2008 at Deutsche Bank as an investment banker and at a private hedge fund based in Chicago from 2008 to 2011.[7][8]

Walsh formed the predecessor to PW Partners, LLC in October 2011. During Walsh's tenure in the hedge fund industry and at PW Partners he practiced corporate activism while investing in Denny's,[9] Red Robin Gourmet Burgers,[10] Great Wolf Resorts,[7] Famous Dave's,[11] BJ's Restaurants[12] and Del Taco Restaurants.[13] A 2014 article in Restaurant Finance Monitor stated that "each of the chains with which he has become involved have thrived on Wall Street in his wake."[14]

Walsh invested in Town Sports International and claimed that the fitness business had been his worst investment.[7]

Town Sports International Holdings

In June 2015 Walsh was named Chairman of the Board of Town Sports International Holdings. The Company was burning $5 million a month and was in the midst of 17 consecutive quarters of same-store sales declines. The Company was burdened with $300 million of debt that could not be repaid with the current levels of cash flow. This led Moody's rating agency to describe Town's capital structure as "untenable" and they downgraded the debt to a "Caa2" rating. The stock price declined to 92 cents per share while the Company's debt traded down to 36 cents on the dollar.[15] In September 2016 Walsh became Chief Executive Officer.[1] While industry experts predicted bankruptcy or a sale,[16] Walsh vowed to Town's shareholders that he would never give up.[17] After 17 consecutive quarters of declines in same store sales the company then posted 5 consecutive quarters of same-store sales increases and the stock price increased more than 1,000% to $11 per share in 2018.

Town Sports International started to make acquisitions in September 2017 acquiring the Lucille Roberts brand, an all woman's fitness chain.[18] In December 2017, Town acquired the luxury brand TMPL [19] and in early 2018 the Company acquired Total Woman, an all woman's fitness chain based in California.[20] Since taking over as CEO Walsh has overseen acquisitions of more than 30 clubs.[21]

Walsh's writings include his annual letters to shareholders.[22]

In May 2018 Walsh was chosen as an Ernst & Young Entrepreneur of the Year Awards 2018 New York Finalist.[23] On June 12, 2018 Walsh was selected as the winner.[24]

References

  1. 1 2 "Town Sports Names Patrick Walsh CEO, Consolidates COO Role". Club Industry. 2017-05-04. Retrieved 2018-05-11.
  2. ↑ "Patrick Walsh | Board Member | BJ's Restaurants, Inc". BJ's Restaurants, Inc. Retrieved 2018-05-31.
  3. ↑ "Del Taco Restaurants, Inc. - Corporate Governance - Board of Directors". investor.deltaco.com. Retrieved 2018-05-31.
  4. ↑ Clubs, Boston Sports. "Get Your Mind Right with Boston Sports Clubs and Gronk Fitness". www.prnewswire.com. Retrieved 2018-05-17.
  5. ↑ "Pat Walsh". Wesleyan Athletics. Retrieved 2018-05-11.
  6. ↑ "Pat Walsh". Wesleyan Athletics. Retrieved 2018-05-11.
  7. 1 2 3 4 5 Gara, Antoine. "Meet Patrick Walsh, The Do-It-Yourself Hedge Fund Activist You've Never Heard Of". Forbes. Retrieved 2018-05-07.
  8. ↑ McCarthy, Erin (2014-04-22). "BJ's Restaurants, Shareholders Come to Board Agreement". Wall Street Journal. ISSN 0099-9660. Retrieved 2018-05-11.
  9. ↑ Dealbook. "Denny's Slams Investors Leading Proxy Fight". DealBook. Retrieved 2018-05-15.
  10. ↑ "Oak Street Capital Management, LLC Addresses the Board of Red Robin Gourmet Burgers". Retrieved 2018-05-15.
  11. ↑ "Finally, Board Diversity at Famous Dave's - Restaurant Industry Insight and Analysis - July 2015". www.restfinance.com. Retrieved 2018-05-15.
  12. ↑ Quast, Jon. "Activist Investing Won't Save This Company". The Motley Fool. Retrieved 2018-05-15.
  13. ↑ "Del Taco Restaurants, Inc. - Corporate Governance - Board of Directors". investor.deltaco.com. Retrieved 2018-05-15.
  14. ↑ "Activist Bug Bites BJ's Restaurants - Restaurant Industry Insight and Analysis - March 2014". www.restfinance.com. Retrieved 2018-05-15.
  15. ↑ "Moody's downgrades Town Sports' CFR to Caa2; outlook negative". Moodys.com. 2016-02-16. Retrieved 2018-06-14.
  16. ↑ "NYSC owner seeks a sale, but all's not gym-dandy". New York Post. 2015-03-07. Retrieved 2018-05-11.
  17. ↑ "Letter from the Chairman 2015".
  18. ↑ "Town Sports International to Acquire Lucille Roberts Health Club Business". Club Industry. 2017-07-14. Retrieved 2018-05-07.
  19. ↑ "Building a "TMPL" to Fitness with Town Sports International". Cheddar. Retrieved 2018-05-07.
  20. ↑ Partners, Riordan, Lewis & Haden | Equity. "RLH Equity Partners portfolio company, Total Woman, acquired by Town Sports International". www.prnewswire.com. Retrieved 2018-05-07.
  21. ↑ "Town Sports International Reports $8 Million Increase in Q1 2018 Revenue". Club Industry. 2018-04-30. Retrieved 2018-05-11.
  22. ↑ "Letters From the Chairman | Town Sports International Holdings, Inc". Town Sports International Holdings, Inc. Retrieved 2018-05-15.
  23. ↑ "Meet the 2018 Finalists".
  24. ↑ EY. "EY Announces Winners for the Entrepreneur Of The Year® 2018 New York Award". www.prnewswire.com. Retrieved 2018-06-13.
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