From Lending to Valuations:
Chris Carmosino & Ken Frieze of Gordon Brothers Discuss Carmosino’s New Role
Featured in TSL Express
Chris Carmosino, President of Valuations, and Ken Frieze, CEO, discuss Carmosino’s appointment and the future of
Gordon Brothers’ valuations group.
Chris, how do you think your career in ABL has prepared you for this position at Gordon Brothers?
CARMOSINO: Serving in commercial banking for so many years, and, particularly, as an asset-based lender, has provided the ideal training. It certainly will help me empathize with my former colleagues in the industry and our clients’ needs and pain points.
I’ve relied on Gordon Brothers in my past life as a commercial banker, so I know what they do really well and how to build on that. At the same time, I know what the market is looking for. I think that will help me direct the group’s growth over time.
What are your short- and longer-term goals in this new position?
CARMOSINO: The first thing that we want to do is to continue the good work that’s ongoing right now in the group. We’ve got a first-class team of professionals, among the best in the industry in our valuation practice, and we’re doing a great job for our clients. We want to continue that momentum.
A major priority is to help inform the market of the breadth of our capabilities at Gordon Brothers. We have a tremendous industrial practice, but sometimes it’s overshadowed by our retail practice, given its strong reputation and industry leadership for over a century.
For example, we invest more in commercial and industrial transactions than all of our competitors combined. That hands-on institutional knowledge is unsurpassed in the industry. Our 2015 acquisition of AccuVal bolstered our industrial valuation capabilities, and sometimes I’m not sure the market fully appreciates that. Educating the market on our expertise across the whole breadth of our platform will be a major focus area.
Ken, can you tell us why you picked Chris? Why was he the perfect person for this position?
FRIEZE: We had anticipated Rick Schmitt’s retirement for a while, so it gave us a good amount of time to search for the very best new leader that we could find. That allowed us to be very picky as to who we would bring in to this key leadership role. We had a long list of possible candidates. There are a lot of people who are of high caliber and high quality in this space that could lead our valuations business, but there was always one person at the very top of my list.
Knowing Chris by reputation and how much he’s accomplished in the industry through so many leadership roles, really demonstrated to me from afar the leadership qualities that he possesses in building out a group, hiring the best talent, and really, bottom line, delivering the results. That is what we need most in this role, and that’s what Chris brings to the table more than anything else. At Citizens, Chris led their ABL group, and built it up from a nascent group to a very successful differentiated group.
It also helps that Chris has built his career in the ABL space, which is primarily who we serve with valuations. He knows clients’ needs and can understand their perspectives on how appraisals are received. He has deep knowledge of the fundamentals of asset-based lending and the role appraisals play in underwriting and managing risk. That knowledge is enhanced by the strong operations and appraisal teams that he can rely on, when necessary, as he leads them forward to build out the group further.
Chris also has tremendous relationships, as we all witnessed when he was recently honored on March 1st by National Jewish Health, which is a very prominent honor. And I know he felt slightly competitive and, not so humbly, noted that his team raised, I believe, the second highest total in the 41 year history of the event, and the most since before the great recession.
He has had such an established career, there’s just so many fact points about his leadership, accomplishments, his relationships and his reputation. These qualities made him not only an ideal leader for our appraisal group, which combined is now the largest appraisal group in the world serving the asset based lending industry, but he also can contribute much more broadly to the leadership of Gordon Brothers, itself.
Gordon Brothers’ valuations group has undergone some recent changes. How does this appointment play into that history and what’s to come?
CARMOSINO: The valuations group has grown significantly over the past several years. You’ll recall that in 2013 we acquired Emerald Technology Valuations and shortly after that we launched our own energy practice. Two years later in 2015, we acquired AccuVal.
All these specialty practices now fit under the Gordon Brothers umbrella, complementing our already very strong retail, consumer and industrial practices at Gordon Brothers. We’ve got a very rich product offering.
In addition to that targeted sector expertise, we maintain the world’s largest asset recovery database, tracking over ten million industrial transactions. By combining that data with the liquidation results of our disposition practices, our knowledge of real world recovery values is unmatched.
Looking ahead, one of our primary goals is to build on that legacy by continuing to elevate and enhance our offering. We have certainly come a long way, but there’s a lot more we can do to help our clients.
FRIEZE: I think that change is always a good part of business, and this is a great opportunity, after multiple acquisitions and a successful three-year tenure by Rick Schmitt, to get to the next level.
As proud as we are of what we’ve built, there’s much to be done. We have this wonderful platform here at Gordon Brothers where we have successful valuation businesses in the United States, Canada, Brazil, Japan, Australia, and throughout Europe. Bringing those together and coordinating them so that we can provide a global solution, offering a single point of engagement, gives customers a consolidated answer. That insight is a unique aspect that Gordon Brothers brings to the table.
What would you say are the biggest challenges that valuations professionals are facing currently and how is Gordon Brothers working to overcome them?
CARMOSINO: Managing risk through the cycle is a particularly significant area of focus and one of the biggest challenges that both the lending and the valuation community will face in the coming years. The relationship between the valuation community and our clients will become even more interdependent. Our clients’ need for information will grow, and the process will be increasingly dynamic. We will need to adjust our practice accordingly with the evolving needs of our clients to help them manage risk through the cycle.
This represents a significant challenge and also a major opportunity for our business. This is just one example of why I think it’s such an exciting time to be in the valuation space.
FRIEZE: I’ll add to that that not all appraisals are created equal. There are some very respectable appraisal shops out there, some have different approaches. I have great confidence that over the 115 years we’ve been in the business we have built the best-in-class shop that Chris will now lead forward. We have the most ASAs on staff and have more tenured analysts doing the work than other firms. We have tremendous data available to us through all of our disposition activity and all the recovery values that we track, including 10 million industrial transactions.
The reason why I proudly say those facts is that it gives us the opportunity to be fundamentally more accurate. Which I think, ultimately, will be of even greater importance as the market turns. Eventually when we enter a down cycle lenders will have to more closely review the underlying collateral that they’re lending against. In the normal course, very few appraisals actually get tested. But there will come a time when that will be more important, and when that is more important, Gordon Brothers typically gets the call because of the experience and insight that we have.