Traverse City Business News By Ross Boissoneau In Issue 2019 September
Traverse City titans George Cochran, Casey Cowell and Lowell Gruman – all long-time leaders in their respective fields of finance, technology and investment banking – are launching a new bank.
The merchant bank Cochran, Cowell & Gruman (CCG) is bringing together several influencers in the tech and financial industries to provide underwriting, loan services, financial advising and fundraising services for middle market and early stage businesses.
CCG will provide direct access to co-investments in private equity, venture capital and real estate, said W. Turner Booth, co-founder and principal of CCG.
“The idea is that in Traverse City (and) northern Michigan, people don’t have access to capital,” he said, adding that CCG will help to find investors and people who can financially support entrepreneurs and businesses.
Since its principals personally co-invest in the companies it advises, CCG is focused on long-term results rather than short-term gains. “The point of it is it’s difficult to raise capital,” Cowell said, noting that it’s often the case that when the CEO of a start-up, who needs to be working, must also find funds for the company. Cowell says he believes more entrepreneurs would move to or return to northern Michigan if they had ready access to capital.
The set up of CCG is different from capital investment group Northern Michigan Angels or Cowell and Gruman’s Boomerang Catapult capital venture firm. CCG focuses on early-stage and middle-market companies that need a larger capital infusion for growth or have investors who want to exit.
Another difference is in the area they serve. CCG would like to attract investment and do business across the entire region, even downstate, Gruman said. “At Boomerang, our mission is Traverse City specific,” said Gruman. “We believe there is sufficient potential business in the broader area and region (for a merchant bank).”
Linking other regions is part of CCG’s business model, Gruman said. “We’re working with Michigan Tech in Houghton. Green Bay is less than 100 miles away. Technology and air travel make geography less of an issue,” he said, adding that CCG will typically be looking for investors and/or investments with at least some connection in or to Traverse City.
CCG is also co-sponsoring an Opportunity Zone (OZ) investment in the region. Opportunity Zones are areas designated by a provision of the congressional Tax Cuts and Jobs Act of 2017 to encourage those with capital gains to invest in low-income and undercapitalized communities.
CCG anticipates utilizing OZ investment opportunities as it moves forward in this area’s Opportunity Zone, located south of Traverse City. It currently includes businesses like Britten Banners, TentCraft, and Promethient, Inc., “all of which promote employee development and add value and jobs to our community,” Cowell said.
He also cited the former Sabin Elementary School, now being used by Traverse City Area Public Schools as its data center, and suggests others could follow, calling the area an ideal place to support new ventures which would create higher quality and better paying jobs.
CCG was founded in the winter of 2019. However, discussions about the concept had been percolating among the principals for some time. “We’re glad it’s off the ground,” said Gruman.
According to CCG principals, the lack of premier investment banks or merchant banks limits access to capital for companies that would like to grow. It’s a goal of both CCG and Boomerang Catapult to provide opportunities for entrepreneurs and highly educated finance professionals to move to this area or for those originally from the area to return.
Cochran said there is an emphasis on targeting markets outside the five-county area. “We want (companies) to relocate here and help locals attack markets outside our little piece of heaven,” he said. “We want to bring businesses that create job opportunities for those in their 20s, 30s and 40s who create a tax base.”
Cowell concurred. “Merchant banks cast a wider net,” he said.
While the group declined to identify any of the entities they are currently working with, Gruman said one current client is a large fintech – financial technology – firm, and they anticipate that in a year they will have what they say is “some really exciting companies in our investment portfolio.”
Five years from now, they say they hope to have a host of good investments, an enhanced club of co-investors, and a full staff of intelligent, energetic financial and business people making their careers in northern Michigan.
And they’re bullish on the difference CCG will make to the financial health of the region. In tandem with Boomerang Catapult, 20Fathoms and others, CCG hopes to establish Traverse City as a premier market for starting and growing businesses that drive the creation of high-paying jobs.
Cochran’s dual role as apple farmer and owner of West Bay Beach hotel aside, he says diversifying into fields such as manufacturing and technology would offer the economy of northern Michigan long-term infrastructural value. He also sees events such as the National Cherry Festival, Traverse City Film Festival or the Great Lakes Equestrian Festival as enriching the culture and introducing people to the area, but not having the desired long-term impact.
“You don’t get a lot of positive (long-term) effect from festivals,” he said. “They’re all good but they don’t build the infrastructure.”
Who’s Who at Cochran, Cowell & Gruman Merchant Bank
Several area movers and shakers have joined to form and help run Cochran, Cowell & Gruman. George Cochran has a lengthy record in finance and insurance; Casey Cowell is known for co-founding the world’s largest modem company, U.S. Robotics Inc., before becoming an investor, advisor and board member in a broad range of companies; Lowell Gruman has 30 years of senior executive management in international investment banking and serves on numerous local boards; W. Turner Booth has eight years of transactional experience as a commercial transactions attorney; Keith M. Nielson brings 18 years of experience managing Generations Management. CCG Principal Cori Chekhovskiy runs Generations Management, is an owner and board member of the parent company of Armor Express and KDH Defense Systems, and co-founded Pathway Homes. CCG Analyst Kevin Query has experience as a Realtor and in agricultural research.