“At 26 I sold everything I own and moved to Latin America”
It was October 2005, I had two weeks left of work, and everything was posted for sale on Craigslist. The first guy to respond wanted my couch. After arriving, he looked around my San Francisco apartment and asked, "How much for the bed?"
I was so excited to be getting rid of two big ticket items I quickly agreed on a price and helped him load both items into his pickup. As I entered my hardwood-floor, studio apartment, my excitement suddenly turned to dismay.
Where was I going to sleep for the next two weeks?
Growing up in California with a Panamanian Mom, I had always wanted to live close to my large extended family and raise my kids in Panama.
After graduating from UCSD with a degree in Economics, I worked for Fisher Investments for a couple of years before quitting and making the move.
In Panama, I continued working in financial services until 2011 when my partner and I bought our first business and started Alternative Holdings.
We found a small, industrial sales company, with 26 employees and started AH with two guiding principles:
1. Neither of us would have an operating role in our businesses.
2. We would only take a salary, reinvesting the profits.
Initially neither of us “quit our day job”, as our salaries from AH were too small to live. To this day we continue to draw combined salaries of less than 1% of revenues.
We now have two holding companies, one focused on Panama and the other on the USA. We operate in 5 different verticals and have done 8 acquisitions.
We have never sold a business.
In Panama, we operate in restaurants, industrial sales, and business process outsourcing.
In the United States, we have a furniture retailer and a distributor of water heating products.
My partner and I personally look at every opportunity, read each CIM, and visit all potential acquisitions. We delegate the management of our operating businesses to professional CEOs. Some of them were hired post-transaction and others have been operating their businesses since day 1.
Aside from reviewing investment opportunities, each of us acts as a Managing Director. Overseeing the performance of a HoldCo and guiding its CEOs. My partner is the MD of our USA HoldCo and I oversee Panama.
We have different visions for each. We raised capital for the USA, have minority investors, and the end game is to take the company public.
In Panama, my partner and I are 50/50 partners. Our dream is to create a private business that does things the right way. Creating the best place to work in Panama, providing first-class customer experiences, and operating in a highly profitable manner.
I hope to not only instill these values in our business but also use it as a model to show others how to operate and compete in Latin America.
Since beginning 13 years ago our investment thesis has not changed:
• Buy companies we understand.
• Run by people we want to work with.
• Pay a fair price.
Once we have acquired the business, we look to:
•Maximize cash flow.
• Allocate the cash to the best available investment option.
•Compound over the long term.