#181: Fred DiSanto (Ancora) — Connecting Dots, Activist Investing, Mentorship, and Deal Making

Fred DiSanto (Ancora) [00:00:00]:
Connecting dots is very difficult because a lot of times people like connecting dots, and they wanna get something in return. Right? So if I refer you to somebody, and I'm gonna say, what? You know, what do I get in return? I said never never think like that. I said never ever think if you do someone a favor and connect them a dot, that might help him. It might not help you at all, but maybe help the both of them. And you just keep doing that, and you keep doing that, at some point it's gonna come back to you, and you're you're gonna get you are truly gonna get rewarded for that. So if if you if you think to do something for someone because you want something in return, don't do that. Because at the end of the day, you might get disappointed. You should be connecting a dot or doing something for somebody because that's what you want to do because it's in the best interest of everybody.

Jeffrey Stern [00:01:02]:
Let's discover what people are building in the greater Cleveland community. We are telling the stories of Northeast Ohio's entrepreneurs, builders, and those supporting them. Welcome to the Lay of the Land podcast, where we are exploring what people are building in Cleveland and throughout Northeast Ohio. I am your host, Jeffrey Stern. And today, I had the absolute pleasure of speaking with Fred DeSanto, chairman and CEO of Ancora, the Cleveland based investment firm with nearly $10,000,000,000 in assets under management and over 100 employees, where Fred has led the firm since 2006. Prior to Ancora, Fred has had an expansive investing career, most recently overseeing investment management, private banking, and trust and banking services at 5th Third Bank, which had acquired Maxus Investment Group in 2001, which previously merged with Gelfin Partners Asset Management back in 1997, where Fred served as a managing partner. Today, Fred sits on the boards of Ampco Pittsburgh Corporation, The Eastern Company, and Regional Brands Incorporated. He is the former chair of the board of regents of St.

Jeffrey Stern [00:02:13]:
Ignatius High School in Ohio City, former chair and current trustee of the Greater Cleveland Sports Commission, and current chair of the board of trustees at Case Western Reserve University, where he also earned his bachelor's and his MBA. This conversation is full of wisdom and amazing stories from Fred. We cover the influence of his competitive spirits through athletics, the business of activist investing, specifically exploring Fred's approach through the lens of Ancora's recent campaign to seat directors at Norfolk Southern in the wake of the catastrophic train derailment incident in East Palestine, Ohio. We cover the lost art of handwritten notes, lessons learned from his mentors, the power of employee ownership and incentives in driving behavior and outcomes, the importance of dot connecting, effective deal making, and so much more. I had a lot of fun here learning from Fred. So please enjoy this great conversation with Fred DiSanto after a brief message from our sponsor. Lay of the Land is brought to you by John Carroll University's Boulder College of Business, widely recognized as one of the top business schools in the region. As we've heard time and time again from entrepreneurs here on Lay of the Land, many of whom are proud alumni of John Carroll University, success in this ever changing world of business requires a dynamic and innovative mindset, deep understanding of emerging technologies and systems, strong ethics, leadership prowess, acute business acumen, all qualities nurtured through the Bohler College of Business.

Jeffrey Stern [00:03:43]:
With 4 different MBA programs of study spanning professional, online, hybrid, and 1 year flexible, the Boehler College of Business provides flexible timelines and various class structures for each MBA track, including online, in person, hybrid, and asynchronous. All to offer the most effective options for you, including the ability to participate in an elective international study tour providing unparalleled opportunities to expand your global business knowledge by networking with local companies overseas and experiencing a new culture. The career impact of a bowler MBA is formative and will help prepare you for this future of business and get more out of your career. To learn more about John Carroll University's bowler MBA programs, please go to business.jcu.edu. The Buller College of Business is fully accredited by AACSB International, the highest accreditation a college of business can have. So I'm always thinking about where the the best place to start these conversations would be. And when we first met, you had mentioned the importance of competitive spirit in driving success. So this can be, you know, a multifaceted first question here, but I'd love to unpack how you have thought about this competitive spirit, the desire to win, what winning even means in this context, how you've cultivated it, and how it's kind of permeated throughout your career and upbringing.

Fred DiSanto (Ancora) [00:05:13]:
Yeah. That's that's a that's that's a pretty good question to start with. You know, the competitive spirit, I think, just comes from me personally, come from a family of, you know, 7 kids. I was the only son, but both my mom and dad were were were athletes. My mom was a very good athlete. But, you know, playing getting involved in in, sports at an early age, I think I just became, you know, very competitive. And I think that competitiveness, that teamwork that you learn in sports you know, I played team sports. So I played, you know, football, basketball, and baseball actually through high school and college.

Fred DiSanto (Ancora) [00:05:57]:
And that ability to work within a team framework, but also but also measure your own your own success within that team. And then then, personally, maybe accepting defeat when you when you lost, but actually learning from it. But more importantly, I think it carried over in, into my career business career, and I I had one of my great mentors, Ernie Manser, who was an attorney here in town for for many years, and and, well known well known individual. You know, he was introducing me one one night at some some awards thing, and he said the one thing, you know, I love about Fred is, you know, people think he's really competitive. He said, you know, it's more fear of losing Mhmm. What gets him up in the morning. And, you know, when when I reflected on that, he he's he's right. I mean, I you know, in our business here at Ancora, it's great that we bring in wins, you know, in the door every day, but I'm worried about what's going out the back door.

Fred DiSanto (Ancora) [00:07:00]:
Right? And and that going out the back door is losing. And so I I think it's it's been it's been that competitiveness. It's been that team environment, I think, is is how how we've built our culture, how I've I've tried to work in an environment where I can I can succeed? I can measure that success. It's measurable, whether it's measurable by just the success of the business, or it's measurable by, I would say, our associates and our team members that we have. You know, are they successful? Success is not built by one person. You know, I've been fortunate. I I surround myself with a lot smarter people than I am. But if everyone doesn't participate, it's not success.

Fred DiSanto (Ancora) [00:07:43]:
And the other thing I remember giving my son some advice one day, and he said, you know, I don't know. I really don't know what I want to do. And, you know, can I be successful? I said, listen, success is measured so many different ways, You know? And I believe success is you wake up in the morning, you can't get to where you're going. That to me is success. Doesn't matter what it is. I got one of my one of my closest friends is a is a is a guy named Sean O'Toole. Might not have any meaning to you, but he's a he was a basketball coach, and now he's the AD at Gilmore. There's not a guy that I don't think is more successful than Sean because he can't wait to get where he's going.

Fred DiSanto (Ancora) [00:08:19]:
It's not measured by money. It's measured by the effect that you're having on people, the love that you have for your job, and the passion that you have for your job. So I think that competitiveness in me has has helped helped mold me, and and then hopefully, maybe has permeated down with our team here.

Jeffrey Stern [00:08:38]:
When you think about some of those things that, you know, molded your motivations and and maybe even directionally where you wanted to go, Even in some of the language you're using now, it it feels quite apparent the the influence that athletics may have had, you know, on on a lot of that. So I'd love if you could just unpack a bit, you know, that that chapter and how you've applied it to the work you're doing.

Fred DiSanto (Ancora) [00:09:02]:
Yeah. Athletics, you know, I I come from an athletic family. My mom's family was very athletic. My grandfather, doctor Vic Hepolito, you know, was a great athlete at Cleveland Heights and at Chase Western Reserve at the time, and then he actually became the physician for the for the Cleveland Browns for for many, many years until Cleveland Clinic took over for him. And my father was competitive. So, you know, I started playing at a at a young age, all the sports, and didn't have success all the time, but felt that I I worked pretty hard. Maybe wasn't the best athlete, you know, on the floor or on the field, but worked pretty hard at it and had confidence. You know, I had confidence in myself.

Fred DiSanto (Ancora) [00:09:52]:
And the success I had, I I went to Saint Ignatius High School, which which I love, very competitive environment, 1200 well, at at the time, I think we had 1200 boys. Today, they have 1400 boys. And, you know, either you you succeed in that environment or you or you don't, and there's competition everywhere at Ignatius. It's not just basketball, football, baseball, and all the other sports. Just school is very competitive. And I do think having to compete in that environment and succeed in that environment, you know, helped me when we went to when I went to Chase. A guy named Bill Soudic recruited me, and he said, hey. You know, you'll be able to play all 3 sports here.

Fred DiSanto (Ancora) [00:10:34]:
And I'm like, in college? You know? Like, really? And I ended up playing football, basketball, and baseball at Case for 4 years, and I can remember my freshman year, we were o and 9 in football. We had the longest losing streak. I think it was, like, 23 at the time, you know, at that night. And I'm like, I'm I'm done with football. I you know, I don't wanna play football. And then new coach came in. He said, why don't you try it another year? And next thing you know, the the team goes 5 and 3, 8, 1, 9 and o, my last 3 years and had great sick great fun, great teams, great success, and I do think that work ethic that you had to do you know you know, I was doing something every day, right, for 4 years. And, someone asked me, how'd you do it? I said, I don't know.

Fred DiSanto (Ancora) [00:11:20]:
You just did it. You know? You figured out. You know? I think I'm a fairly good multitasker, and I think it it's because of that. And, you know, it it just drove to to have some success. But, again, more on the team side, you know, the the more team oriented than just individual based. So it was fun. It was fun.

Jeffrey Stern [00:11:43]:
That I'm glad it was fun. You know, you gotta gotta enjoy it.

Fred DiSanto (Ancora) [00:11:46]:
I mean, if you don't enjoy it, you shouldn't be doing it. Right?

Jeffrey Stern [00:11:48]:
I I think that's right. At at what point did you know that you wanted to become an investor?

Fred DiSanto (Ancora) [00:11:55]:
That's a great question. So my my wife's father was in the business. I remember the first stock I bought. I think it was Chi Chi's. I think it might have gone bankrupt for all I know. And, it was a Mexican restaurant. And I liked the environment. And then some of my friends got to work at McDonald and Company, and I interviewed at McDonald and Company while I was getting my master's at Caisse.

Fred DiSanto (Ancora) [00:12:17]:
And it was a really cool environment, very team driven, very competitive, extremely competitive. And, I'm getting my master's case, and and I was interning at McDonald's, and they they offered me a job in institutional sales. And I remember talking to some of my classmates, and they go, yeah. We're going to work at P&G. We're going to work here. You know? I don't know what the numbers were. I'm I'm, you know, probably in the range, you know, I go 40 or $50,000, you know, salary. And I'm like, oh, wow.

Fred DiSanto (Ancora) [00:12:47]:
That's great. They go, where are you going? I said, I'm going to work at McDonald company. And they go, how much are they paying you? I go, 1500 a month's bra. And they said, 1500 a month's draw? I go, yeah. I said, but I got I got all the upside I want. There's no cap on the upside. Eat what you kill, then you build a business. And and, I happen to learn from some great people there and traveled to the West Coast.

Fred DiSanto (Ancora) [00:13:11]:
I was on the institutional sales side, then went over to Prescott and covered some of the Ohio accounts and and still kept some of the West Coast accounts, and it was a great time. It was a great learning experience. I was lucky that I I figured out that at some point, that side of the business wasn't going to be as, I'd say, long in the tooth as as the business I'm in today, which was on the other side, managing money instead instead of selling ideas to someone. And I think the last time I mean, I was on the road, I think, maybe 90 nights my last full year doing that, and, you know, just didn't I mean, I like traveling, but I didn't like traveling that much. And so I think that that competitiveness in that environment really then transferred over to what I call the buy side, the investment management side of the business. But I'll tell you, it was a hard road, man. People look at us now and tell you, you got 10,000,000,000 under management. It was really difficult the first 5 years and took a significant pay cut to start this business from where I was at McDonald Company.

Fred DiSanto (Ancora) [00:14:19]:
I remember, and at Prescott, I remember my wife saying, what happens if it doesn't work? I said, well, if it doesn't work, it doesn't work. We'll just figure something else out. You know? But not working wasn't an alternative for me. You know? We were gonna we were gonna fight through it no matter how long it took. Had a lot of good people around us, so, you know, the team worked. There were some changes on the team, you know, along the way, but that happens.

Jeffrey Stern [00:14:43]:
Yeah. Well, knowing, you know, where where you are today as as this, you know, formidable $10,000,000,000 asset under management institution, I'd love to hear about those earlier days where perhaps, you know, you didn't foresee, you know, exactly where this would be today. Maybe you did, but I'd love to hear about at the earliest stage what the vision was like.

Fred DiSanto (Ancora) [00:15:05]:
So there was, like, 6 of us, maybe 66 or 7 of us. And, you know, we all took pay cuts, and then within 6 months, we took another pay cut, you know, because we were we were going through, you know, we weren't driving the asset growth that we needed to pay for for all the expenses. We went out and raised a little bit of money to help us fund the operation, and I remember picking up our first account. You know, it wasn't a huge account, but, man, it was it was a first account. In doing all the things that you had to do, I I will tell you, you kinda look back on those years, and and, you know, I didn't think I really missed missed something. I do remember that running the credit card bill up before I started we started this business, I had a I had bought a Jeep Grand Cherokee for my wife, paid cash for it, and 18 months into it, credit card bills were high. How am I gonna pay the credit card bills? We sold the car, sold the car. I almost got paid as much as I paid for it.

Fred DiSanto (Ancora) [00:16:11]:
And then I paid the credit cards off that were high interest rates. And then I leased a car for, like, you know, $400 a month. And and I'm like, god. I felt like I was flushed, you know, because you didn't have that that credit card overhang. But, you know, you kind of persevere through those times. I'm lucky that I had a wife that supported me in that, you know, I get it. This is what you love. This is what you're gonna do.

Fred DiSanto (Ancora) [00:16:35]:
You know? And it kinda happened really quick, the new business, you know, going out on our own. We had just just finished or about to finish building our first house in Highland Heights, and, you know, she was, how are we gonna do landscaping? And so we'll do the front yard, and, you know, no one's gonna see the backyard until we have enough money. So we'll do the front yard first, and, you know, the house looked great from the outside you know, from the from the curb. But, you know, it just kind of plugged plugged away plugged away, and every 6 months, every 9 months, every 12 months, you saw some traction that we were getting, and we started building a a better business. I had some great friends and clients along the way that helped us grow by referring us into other clients, and we did a deal with Maxis, and that was in, I wanna say, 97. We did a deal with Maxis, which they they had a great platform. We could do more with them. And then in 2000, I ended up being president at Maxis, and in 2000 sold their our that business to 5th Third, and which was a which was a great great victory.

Fred DiSanto (Ancora) [00:17:45]:
Had no idea that I thought at the time, I'm like, man, this is this is great. You know, it was a nice liquidity event and stuck around at 5th Third for a little over 4 years, and then, you know, Ancora was my old partner at Maxis never went with the deal, and he he set up a little family office, Ancora. And then when I left, we joined forces again, and I think there were 5 or 6 people at the time in 2,005. And now we're north of, I think, a 120 people and and 10,000,000,000 and kinda didn't miss a beat. You know, moved pretty quickly through that. A lot of clients just followed us, you know, over, and a lot of the talent, you know, a lot of the talent you know, I I always say our assets walk out the door every day. It's our people.

Jeffrey Stern [00:18:33]:
Mhmm.

Fred DiSanto (Ancora) [00:18:34]:
So it was fun time. Still is a fun time. You know, we're still growing. We're still building, and, you know, I'm I've taken maybe a little step back from the day to day stuff as much as I was doing and really focusing on what I love to do, which is our alternatives platform, and continue to, you know, develop relationship with clients and handle clients. To me, that's the that's the fun part of the job. So

Jeffrey Stern [00:18:57]:
Absolutely. And I'd I'd love to spend some time talking through some of those components with you. But I think as a as a seg, just to speak to Ancora more broadly, I always find a lot of meaning and intentionality behind the name of something, and and so I'd love just to start. You know, what what is Ancora?

Fred DiSanto (Ancora) [00:19:16]:
Ancora means once again we did, you know, head Maxis, and and the name and core means once again, and and, again, kind of brought the team back over time. You know, more of the team members maybe left 5th 3rd or retired from 5th 3rd, but then just wanted wanna go at it again, and, that that that we're at at Max's. And, so once it we thought once again, it's a unique unique name, you know, and then it stuck. You know? And I I think the reputation of Ancora is is strong. I think our people are really strong, and I do think we're not perfect, but I would I would hope that most of our clients would say that we always have their best interest at heart, not not ours, you know, not our personal interests.

Jeffrey Stern [00:20:06]:
So I I do wanna unpack the behind the scenes of how you decide to make an investment and kind of what that process looks like, and we can kind of talk holistically about it. But I thought an interesting thread to pull on would be that I know Ancora has recently been in the the news for an activist stance with Norfolk Southern, which

Fred DiSanto (Ancora) [00:20:29]:
Right.

Jeffrey Stern [00:20:29]:
Right. A name on its own may not be familiar to many, but if you kinda layer on the context of the disastrous train accident that unfolded just east of Cleveland over in East Palestine, it may ring a bell for some. But I'd love to maybe use them as an example about

Fred DiSanto (Ancora) [00:20:43]:
Sure.

Jeffrey Stern [00:20:44]:
You know, to talk about how you and Ankura's rationale and philosophy behind activist investing and what that even means.

Fred DiSanto (Ancora) [00:20:50]:
Yeah. That's that's so activists investing, you know, activists have a good connotation and sometimes a bad connotation. They think they just go in there and try to strip the company down of assets, sell them, get the stock up, and and move on. That typically has not been our our approach. Our approach is and we have a great team. In fact, Jim Chanrick runs our runs our Alts Group. But Norfolk Southern, the idea came to us, and we we did our own work. And when I say we did our own work, we dig extensively Mhmm.

Fred DiSanto (Ancora) [00:21:24]:
Extensively into the company and do a lot of work. So the way we work work an idea, if you will, we do a deep dive, and then we say, okay. What are some catalysts that we think can help move the stock forward? Norfolk Southern was a name that had gotten beaten up over time. They were the worst performing rail in the industry, and there's about there's I think there's, 66 railroads. So it's not like 5 more railroads are coming in, right, to the country. It's a finite. You know? And there's 6 of them, and they they have great track. You know? They have great geography.

Fred DiSanto (Ancora) [00:22:06]:
But if you take a look at their metrics from the margins, from the the the run times, the amount of cars that they have, the revenue per car, everything was bad versus their competitors. And then you had overlay safety, which they didn't have a good safety record, and I think you'll see that when the report comes out June on East Palestine. We say, okay. The stock had gotten beaten up. We think with the right with the right approach, with the right team, operating team, that we really believe this stock can go from I think, at the time, we we were buying it from maybe 210 to 220, and it's it's, you know, not far from from there today. We thought the stock could be a double over time, and we were gonna bring in Precision railroad scheduling. Alright? So, you know, really maximize the efficiency of the railroad and not at the expense of people or safety. And it's been a practice that a a number of rails have have done, PSR, and you've seen tremendous success.

Fred DiSanto (Ancora) [00:23:23]:
That's where I would say the beef came in with, existing management and us. And then, you know, subsequently through our our proxy fight. And a proxy fight is when we we put a whole slate up for the board. We put 7 individuals up, and we nominated a new CEO and a new chief operating officer. And our CEO, Jim Barber, you know, the ex chief operating officer at UPS. I don't have to tell you what a great company UPS is. Jim started as a driver for UPS and was in the union. And Jamie Boycek, who was a great operator for our competitors.

Fred DiSanto (Ancora) [00:24:04]:
So the fight began, and it was a fairly nasty fight Yeah. Public fight. And I will tell you, Jim Chadwick and and Connor Sweeney from our team, Connor is is probably he knows logistics as well as anybody, really drove that value proposition. What we do then is we go out, raise capital from investors. We raise capital, and then we we we then go effect change. And we really felt and and continue to feel that we won the fight in that we brought we brought 3 new board members onto their board, and the 3 members that were not reelected was the chairman of the board, chairman of governance, and chair of comp. That says a lot. And we got support from a number of different agencies, and we got support from their 2 biggest unions.

Fred DiSanto (Ancora) [00:25:02]:
So that's an ongoing investment for us. We still think there's a lot of heavy lifting that needs to get done there. We're not going away and, and believe it's a it's a great, great opportunity for investors. And I talked about it for maybe 6 or 7 minutes. This was a long process. The amount of work and time is it's 247. When you and Norfolk was our biggest was our biggest activist campaign we've ever done. I mean, it's a $50,000,000,000 market cap, and it's pretty amazing that a firm of our size was able to get 3 board seats on their board.

Jeffrey Stern [00:25:40]:
When when you think holistically about this activist approach, finding companies who've maybe lost their way and helping them find their way, I'd love to just hear your thoughts about the role and importance of the board. I feel it's somewhat of an esoteric topic. Most people maybe don't have a full grasp of, you know, what the board actually does and the influence they have. So I would just love to hear Yeah. Your thoughts on that.

Fred DiSanto (Ancora) [00:26:03]:
Well, it depends on the structure of the board, meaning that, you know, do you have really talented people that understand the business? Okay? That that's critical. And also understand governance. The board's job the board's job is to represent the shareholder. Right? The shareholders elect them.

Jeffrey Stern [00:26:25]:
Right.

Fred DiSanto (Ancora) [00:26:25]:
So the first loyalty should be to the shareholder. And what are we doing as a as a as a board that constantly takes a look at how we create value for the shareholder. Secondly, I do think it's important the board clearly understand the culture of the company and how the employees are treated. There's no company without employees. There's no company without culture. So how does the board really figure that out, and how do they hold the executive team accountable to that? And, you know, I I've sit on public boards. I sit on boards. You know, the the the CEO is held accountable.

Fred DiSanto (Ancora) [00:27:07]:
Yeah. You know, there's goals and objectives every year that he has to accomplish or she has to accomplish and the team has to accomplish. And how do you hold them accountable? And how do you measure those? And it's very easy sometimes. I'm not saying it happens all the time because there's some great boards out there. But it's very easy to get caught up in the relationship with the CEO, the relationship with the CFO, relationship with the president, and all of a sudden you become friends. And how do you hold them accountable? There's nothing wrong to having respect and having relationship with those people. You need to have a relationship with them. But you also have to understand what their strategy is, what their plan is to continue to move the company forward.

Fred DiSanto (Ancora) [00:27:54]:
And if a board doesn't debate that and try to poke holes in it, they're not doing their job. Mhmm. Some of the the Norfolk Southern board members, you know, got paid extremely well. And by the way, Norfolk had a terrible year last year. They underperformed all their their competitors, and they gave the CEO a great raise. I I don't get it. Right.

Jeffrey Stern [00:28:19]:
Well I

Fred DiSanto (Ancora) [00:28:19]:
don't get it.

Jeffrey Stern [00:28:20]:
And and when you mentioned how nasty and challenging this process can be when you do, you know, impose that accountability on the organization, I am just kinda curious, you know, from the outside, it just sounds hard, you know, the the activist approach.

Fred DiSanto (Ancora) [00:28:36]:
It's hard. It's hard. You got you gotta have thick skin.

Jeffrey Stern [00:28:40]:
Yeah.

Fred DiSanto (Ancora) [00:28:40]:
I mean, we we we did a proxy, and we had a proxy fight with a company, and they came out personally attacking me. Personally attacking me. That I didn't respect women, and I'm I was like, I don't wanna respect women. I grew up within a family of of women. My sister runs ran you know, is president of of an HVAC company that that my partner and I own. You know, my my sister's a nurse. Are you kidding me? I mean, I don't respect women, but that's the angle they took. They made it public.

Fred DiSanto (Ancora) [00:29:13]:
So what do we have to do? We have to go fight that. Right? So I had Scott Cowen, who at the time was president at Case University Case Western Reserve University. I chair the board there. Wrote a comment on a couple of my female board members that I sit on boards with came out in support of me. Father Tim Kosicki, that was president of the Jesuit Conference in North America, came out. And I said, you know, I don't attack someone personally. Right.

Jeffrey Stern [00:29:40]:
I

Fred DiSanto (Ancora) [00:29:40]:
mean, personally. Numbers don't lie. And what we were saying this company to do, don't they do it 18 months later? 18 months to 2 months, 2 years later, they did they did exactly what our game plan was for this company, and the shareholders won. So although we may not have won that battle, the shareholders ended up winning at that company. But it's hard. It's not easy, and and you gotta have belief in what you're investing in, but also you have to have multiple paths where you can win. And multiple paths, what we have found, if we're only saying sell the business, that's only one path to win. I don't like that.

Fred DiSanto (Ancora) [00:30:26]:
I like a path where there's a bunch of levers that you can pull. Maybe there's some balance sheet levers. Maybe there's some businesses within the business that should be sold that can free up some capital so you can reinvest in the businesses that are growing. Or maybe there is an opportunity to sell the business, but you need to have multiple paths to have a higher probability of success. And that probability of success, I believe, I firmly believe, when we are active in a situation, our probability of success goes goes up higher than just being passive because of the work that we do in those names.

Jeffrey Stern [00:31:03]:
Right. And that that is the reason to pursue it despite its elevated difficulty.

Fred DiSanto (Ancora) [00:31:11]:
Absolutely. And we have had some great relationships. You know, when people say activism, oh, you must have a terrible relationship with with the management team. No. We were out visiting a company on Friday and that we have a it's one of our largest positions. A new CEO came in there at about 7 months ago. I tell you, one of the best meetings we've had with this company in a long time and really like his strategy and really like his game plan. And we firmly believe that this stock is extremely cheap.

Fred DiSanto (Ancora) [00:31:46]:
We've owned it for a while, but we think it's cheap and walked away with that saying, we like him. We like him a lot. So it's not to go in, hold something for 6 months, and blow it out. If you can find a business, a company, and you really believe in the management team, and you think they have great one way, hell, we'd love to own it for 5 years, 6 years, 7 years. And we think Norfolk Southern is one of those names. Norfolk Southern is not a, you know, good in, but, you know, let it go up 15 or 20% or 30% and sell it. We we think there's huge opportunity here long term for this company.

Jeffrey Stern [00:32:24]:
What has been the the most memorable investment you've made? And if you could take us through that journey.

Fred DiSanto (Ancora) [00:32:30]:
Yeah. There's been a couple of really good ones. I I I can tell you early on when we we took a big position, when the world was coming to an end in 2,008, 09, 2010 Sure. We took a big position in Parkview Federal Savings, and we transformed that management team. Had a wonderful board. Umberto was on the board. Steve Calabrese was on the board. There there are some there are some really, really good good people on that board.

Fred DiSanto (Ancora) [00:33:01]:
And, you know, it was on life support. They couldn't get any federal money, you know, and they they were doling out federal money. We brought a management team in there, Bob King, who who ran 5th Third, really not only in Northeast Ohio, but in the Ohio region for 5th Third Bank out of Cincinnati. And he and I had a great relationship. He was he was Bob was he really drove the acquisition of 5th Third when they bought Max bought Maxis. And Bob and I stayed friends, and we had this opportunity and went out and raised a bunch of money when no one could raise money for a financial institution. And Bob went in there and with his team, cleaned it up, started making money, and then FNB came in and bought them. And, you know, in in less than, I think, 3 or 4, maybe 4 years, there's over a 125% return or something for our shareholders.

Fred DiSanto (Ancora) [00:33:56]:
That was a very difficult period of time, but we took a look took a look at okay. We've got a good team here. They know how to run a bank. They can get their hands dirty. They're gonna work their butts off, and that that was a great win. That that was a great win for us and for everybody involved. That that was that was a fun one. There's been a couple of others.

Fred DiSanto (Ancora) [00:34:19]:
I mean, you know, there there was one that we loved, and we were raising money, and we started buying it. Next thing you know, they announced everything, you know, and we hadn't really had engaged with them yet. And within 40 days, the stock was up 40%. We had no fight against them because they were they were doing everything we thought they were gonna do, and it was a great win. The other one that is we still we still own is a company called Ritchie Bros, And Ritchie Brothers bought we had we had a position in IAA, and IAA was think of you driving a car. Right? You got a 8 year old car. You get in an accident, and they say, this car is done. Right? This company gets it, brings it to their yard, and they have yard you know, 280 yards across the country.

Fred DiSanto (Ancora) [00:35:11]:
They'll sell it, sell that whether for parts or sell just the vehicle, and then they they kinda act as the broker. They get a transaction fee. And the stock had been been underperforming for a long time. We took a position in it, and we started to have some hard discussions with

Jeffrey Stern [00:35:31]:
them. Mhmm.

Fred DiSanto (Ancora) [00:35:32]:
And Ritchie Bros from Canada that did a lot of what they did, but in the large, you know, backhoe, you know Yeah. Material movers. Big machinery space. And they ended up buying them, but it was a it was a it was a hard fought battle on the acquisition. A lot of Ritchie Bros. Shareholders did not want them to do the deal. On the other hand, we came out and said, we think the price is a little cheap, but as we dove into Ritchie Bros, as we dove into the leadership team at Ritchie Bros, was a 100% behind it, and and we really helped get that deal done. We went on a real campaign talking to shareholders.

Fred DiSanto (Ancora) [00:36:22]:
I was on MSNBC, you know, talking about why we felt that this deal this this deal made a lot of sense. You can take a lot of cost out of the structure. You can leverage real estate, you know, where their yards are, where our yards are. And, the stock has done really well since then, and we still own it. We believe that it has a lot more runway. We've taken a little maybe maybe a little chips off the table, not much, but feel that that's a live one right now that that's really working out.

Jeffrey Stern [00:36:55]:
Yeah. Fascinating.

Fred DiSanto (Ancora) [00:36:57]:
Yeah. So and what happens is we really like this management team at Ritchie Bros. Really like the CEO, Jim Chadwick, and and the team have developed a wonderful relationship with him. And I really think, you know, what we do on on our core, you know, you know, we we we do the the normal investing for our clients. We have a dividend value team. We have a small mid cap team. We have a micro cap team. We have a fixed income team.

Fred DiSanto (Ancora) [00:37:24]:
I really think the alternative strategies is a real differentiator for, for the firm. There's not anybody doing it here in Northeast Ohio or really even in in the state of Ohio. And we've we've started to build a really good reputation in the marketplace for activism.

Jeffrey Stern [00:37:45]:
Lay of the Land is brought to you by Impact Architects and by 90. As we share the stories of entrepreneurs building incredible organizations in Cleveland and throughout Northeast Ohio, Impact Architects has helped 100 of those leaders, many of whom we have heard from as guests on this very podcast, realize their own visions and build these great organizations. I believe in Impact Architects and the people behind it so much that I have actually joined them personally in their mission to help leaders gain focus, align together, and thrive by doing what they love. If you 2 are trying to build great, Impact Architects is offering to sit down with you for a free consultation or provide a free trial through 90, the software platform that helps teams build great companies. If you are interested in learning more about partnering with Impact Architects or by leveraging 90 to power your own business, please go to ia.layoftheland.fm. The link will also be in our show notes. But you you mentioned the the the team there. One of the things that we had talked about before, both in your personal career but also within the firm itself, was the importance of this ownership mentality.

Jeffrey Stern [00:38:56]:
And, you know, it's a concept I hear lots of folks kind of talk loosely about and and throw around, but it's something that you've actually instituted with employee ownership within the firm. And so I'd love to hear, you know, how you thought about that, the power of incentives in driving incentives. The best behavior and outcomes and and what you believe its impact has been within the firm.

Fred DiSanto (Ancora) [00:39:17]:
That's a good segue into so a few years ago, a firm called Focus Financial Partners that has subsequently has got bought by CDNR came to us and said, hey. We'd like to we'd like to buy you. And I've been very I was very hesitant of doing another deal with someone because, you know, when someone buys you, they own you. Right? That's what you know, you buy something, you own it. So had a lot of people coming in knocking on our door. You know, we we think we have a pretty good franchise, and Focus came in and said, Listen. We work things differently. We're not gonna come in and run your business.

Fred DiSanto (Ancora) [00:39:54]:
We're not gonna change your name. You run your business. You can monetize a big chunk of your business, but the growth on that business, you're gonna be able to keep 51%, and we're gonna take 49. I'm like, really? I said, that that's interesting. And at the time, we had 80 employees, 80 or roughly around 80 employees, maybe 85. I think 35 or 40 had owned owned stock. And I would say a lot of the stock that that the individuals owned was a big piece of their net worth, you know, their nest egg. So, you know, focus came in.

Fred DiSanto (Ancora) [00:40:35]:
We hammered out a deal with them. It was long. I mean, the the the devil was in the details, and Carl Grassi and Pat Berry from McDonald Hopkins were were were heroes in that and who are our attorneys, and struck a deal where we got a liquidity event, but we can we continued to control our own destiny, which to me, that was critical of controlling your own destiny. I was not gonna go work for someone again. I I just wasn't gonna do that. Yep. And in the meantime, a number of our employees, a lot of our employees, got a liquidity event that really made a difference in their lives. And to me, that's something I'm most proud of, that it was felt by by many, many individuals at the firm that had put a lot of blood, sweat, tears in it.

Fred DiSanto (Ancora) [00:41:27]:
And we're able to to really take some significant dollars off the table and kinda say, okay. I've I've got this chunk for retirement now, and I think only 2 people have retired since then. And they were probably I know one of them was planning on retiring. So, you know, we still have the same team, predominantly the same team. We've grown the team, and I think it's it's different. When you own a piece of something, I mean, you've you've had that situation yourself. When you own a piece of something, you always go the extra mile no matter what. I mean, I I'll tell you one one quick story.

Fred DiSanto (Ancora) [00:42:07]:
This is a great it's one it's a it's one of the best stories, and and I'm actually gonna I'm gonna see this this client tonight. You've heard of Marcelli's Dairy. Right? Sure. Okay. So this is back when the markets were really bad in o eight and o nine, and financial stocks had not hit rock bottom yet, but they were getting there. And I was walking past my assistant's desk. Phone was ringing. I picked it up.

Fred DiSanto (Ancora) [00:42:39]:
I go, yeah, and Cora, and it was it was John. And I and he goes, hey, Freddie. You know, you've got National City's down to $10. I think I wanna buy some National City. I said, I'll tell you what, John. I said, personally, I wouldn't be buying National City Common. We'd be buying the preferred. You're higher up on the equity on the stack, on the creditor stack, and they're they're trading at par with each other, $10.10.

Fred DiSanto (Ancora) [00:43:05]:
I would not be buying. I'd be buying the preferred. In fact, I'd be selling the common and buying the preferred. Yeah, I think it's a safer bet. You know, I think there's less risk. And lo and behold, we do it, and the preferred goes to 25 when P&C bought them, and the common stated went down was at $2 and stayed at $2. And I truly believe it's that walking you know, I'm an owner. The phone's ringing.

Fred DiSanto (Ancora) [00:43:32]:
Picking up. Could be a client that needs something. And they have become dear friends of mine, the family, and and now I have a wonderful business relationship with them.

Jeffrey Stern [00:43:44]:
That's awesome.

Fred DiSanto (Ancora) [00:43:46]:
Yeah. I mean, you know, and, again, just not being afraid to do anything to help the business grow and succeed. And sometimes, a couple of things that I preach to our people, connecting dots is very difficult because a lot of times people like connecting dots, and they wanna get something in return. Right? Mhmm. So if I refer you to somebody and I'm gonna say, what, you know, what do I get in return? I said never never think like that. I said never ever think if you do someone a favor and connect them a dot, that might help him, might not help you at all, but maybe help the both of them, and you just keep doing that and you keep doing that, at some point it's gonna come back to you, and you're you are truly gonna get rewarded for that. So if you think to do something for someone because you want something in return, don't do that. Because at the end of the day, you might get disappointed.

Fred DiSanto (Ancora) [00:44:49]:
You should be connecting a dot or doing something for somebody because that's what you want to do because it's in the best interest of everybody.

Jeffrey Stern [00:44:56]:
Yeah.

Fred DiSanto (Ancora) [00:44:56]:
And sometimes that's hard for people to understand. If people are really selfish, they're not great dot connectors. They're just not. They don't and and they're not rainmakers. You know? People that are not selfish, that are humble, that are doing things for people because they want to do that for them and not expect anything in return. Those are people that I believe we want on our team and that you'll be successful. You know, I got a call from someone. I I can't get my my granddaughter in school.

Fred DiSanto (Ancora) [00:45:30]:
Can you help me? Sure. I'm not gonna get anything for that. We're gonna get her in school. Oh, my granddaughter's interviewing for a job at at x, y, and z. I know you know people there. Sure. I'll pick up the phone and call. You know? I'm not gonna get anything in return for that.

Fred DiSanto (Ancora) [00:45:46]:
Who cares? You're helping someone out, and at some point, it's gonna come back. I mean, to me, that's the that's the fun part of the business.

Jeffrey Stern [00:45:55]:
Yep.

Fred DiSanto (Ancora) [00:45:56]:
You know?

Jeffrey Stern [00:45:58]:
Yeah. You pay you pay it forward.

Fred DiSanto (Ancora) [00:46:00]:
You pay it forward, man. You know? And and I'm fortunate in in in in my life that that we've had some success and and, truly believe in giving back to the community, especially to the organizations and institutions that have really had an impact on our lives, our families' lives.

Jeffrey Stern [00:46:19]:
So there's a a few themes that have permeated this conversation, but there there are 2 in particular that I'd like to go a little bit deeper with you on because they they seem just to constantly come up. And one of them I would bucket as it's it's under the umbrella of the relationships that you form and and cultivate with people, but particularly the importance of mentors within your life and your your kind of perspective on mentorship generally, and then the other being deal making and just what you've learned about how to do that.

Fred DiSanto (Ancora) [00:46:52]:
Yeah. Those are 2 good questions, my friend. Well, mentors, you know, coming from a Italian Irish background. Yeah. My dad's father came over from Italy when he was 16, and my grandmother came over from Ireland when she was 18. And they met. He was the gardener and chauffeur, and and she took took care of the house in Shaker Heights. And she lived on the west side.

Fred DiSanto (Ancora) [00:47:23]:
He lived in Collinwood, and he ended up getting married. And there wasn't a lot of Irish Italians getting married, you know, back in, you know, 90 years ago. You know? And my grandfather was an extremely hard worker, so was my grandmother. And I do think, you know, that really permeated down to my father who was, you know, wanted to better himself, wanted wanted to see his family live a better lifestyle that he lived, and he worked really hard, sacrificed for that. So, you know, showing sacrifices like that extremely affected me, you know, kind of helped mold me. My mom's side of the family, her grandmother came over from Italy, and her grandpa passed, but they had and I they Ideal Macaroni Company. They had you know, it was an, you know, macaroni company that she used to sell literally from her cart.

Jeffrey Stern [00:48:17]:
Yeah.

Fred DiSanto (Ancora) [00:48:17]:
Okay. And grew up in Cleveland Heights, and my grandfather grew up in Cleveland Heights. And my grandmother, great grandmother, I think, instilled in my my grandfather the importance of hard work. And he went on and became a physician. And, you know, kind of they lived in different circles. Right? My my grandfather, my dad's grandfather lived in one circle. My grandfather lived in the other circle. But I will tell you the one thing that both of them showed me was they treated people the same no matter who they were or where they came from.

Fred DiSanto (Ancora) [00:48:55]:
My grandfather had Shaker Medical Center at Shaker on on Shaker Boulevard, and I'd go and visit him all the time, you know, head either head to Ignatius or, you know, head down the case. And I'd open up his closet, and there would be booze there. There'd be and he wasn't a drinker. I go, what's all this? He goes, sometimes people pay me in booze. He goes, they can't afford they can't afford anything, so they pay me in booze. And but, you know, just just wonderful people. So and my and my mother my mother sacrificed. She she was a sacrificer.

Fred DiSanto (Ancora) [00:49:29]:
Her mom died at a young age, and she came home from college and raised her siblings. So, you know, learning learning from from family, I think, gives you that foundation as mentors. Right. And then as you as you grow and you move in your career, I find there's always 1, maybe 2, if you're lucky. But my one mentor was was Ernie Manser, and Ernie Manser was a guy again. He was tough, but he was soft. He was very tough, but he was soft. And if you were his friend, you were his friend.

Fred DiSanto (Ancora) [00:50:03]:
And I remember going out when we started our first business, and he was he was very I met him through my father. He was a very good friend of my father's. Yeah. And we were looking to raise money. He said, okay, here, I'm investing in the firm. You're not only going to invest my money, but I'm going to be an equity investor. I'm like, okay. And, I go, god, this is easy.

Fred DiSanto (Ancora) [00:50:26]:
One call and get a check. You know? And I'm bad. And, little do you know, it's a lot harder than that as we all know. And, I think it was maybe 3 or 4 years later, I went back to him and gave his money back and and a really nice return. And, he goes, what's this? I go, this is the you know, you invested with us, and we're gonna buy we can buy you back now, And here's what the return is. We did a fair valuation. Took the check. He ripped it up.

Fred DiSanto (Ancora) [00:50:59]:
My oh my god. He's pissed. He want it should be more. Right? And he goes, do you think I invested in you to make a return on you? Write me a check for what I gave you, and that's all I want. To me, I get choked up about thinking about that.

Jeffrey Stern [00:51:18]:
Yeah.

Fred DiSanto (Ancora) [00:51:19]:
I mean, who does that in this day and age? Right? And I really believe and he and he was a great he referred me so many people of of his network, and he's just a wonderful guy. That that taught me a lot. It it really did. And, you know, so those people really, you know, really helped, I think, mold me who I was. I will tell you my my my wife's a very good judge of character. You know, I think the worst deals I've ever done is when she said, don't do them. I said, I'm doing them. This is a good deal.

Fred DiSanto (Ancora) [00:51:53]:
For some reason, she she can read people better than I, you know? And, and I I should listen to her more often, but, you know, I I do think that having a good partner that that is willing to take that risk with you is critical. Critical that has faith in you that that no matter what happens, you know, you'll you'll get it done. And she's been a great partner on that front. You know, when you when you talk about deal making, I made some bad deals. We've all have. I I'm probably I still make them every day, but I got lucky enough to meet a very good he's become like a brother, Carl Grassi, who who ran McDonald Hopkins and and is subsequently is just retiring. His actually, his grandfather and my grandfather came over on the boat together from Italy, and they were best friends. We did not know this when we met each other professionally.

Fred DiSanto (Ancora) [00:52:50]:
Wow. Didn't know it. And I go home. I'm talking to my father. I said, man, I met this great guy, Carl Grassi. And he goes, Carl Grassi is is his dad Ralph? I said, I don't know who his dad is, but, you know, Carl goes home. You know, he's talking to his dad. His dad goes, Desano.

Fred DiSanto (Ancora) [00:53:06]:
You know, Ferdinand, my grandfather's name was Ferdinand. Ferdinand and your grandfather were best friends. They were best man in each other's weddings. And so Carl Carl calls me. I said, I gotta tell you something. I gotta tell you something. I said, you talked to so we taught and and and literally, we became best friends, best of friends, I should say, since that point. And he became our attorney, and Carl and I have done a lot of deals together where we've bought companies, sold companies.

Fred DiSanto (Ancora) [00:53:38]:
Carl has a master's in tax, and he's a lawyer. His cup is half empty. Mine's always half full. We we're really good partners, and he's extremely, extremely bright. And he would say, did you did you read did you read the legal documents? I said, no. I didn't read them. Why not? I said, because you're reading them. I trust you.

Fred DiSanto (Ancora) [00:53:57]:
I don't need to read them. You know? I said, yeah. And I bet we've brought each other. We've done, a lot of deals, but have had some really good liquidity events over the years in businesses that we've owned for sometimes 20 years, sometimes 7 or 8 years, you know, sometimes 3 years. And having a partner that you can trust is critical, is absolutely critical when you're doing a deal. The deal is the deal. Right? I mean, I I I'm a believer. You're you're the first test anyone has to pass is, do you trust the person you're investing in, the company? And sometimes you get them wrong.

Fred DiSanto (Ancora) [00:54:40]:
You know, you get that wrong, but you gotta pass that test. And then the other thing is, whoever you're doing the deal with, do you trust them? And one of the first businesses we bought is a great business, been around a 125 years, but there were some real issues that we did not know going into it where there are 3 sets of books, you know, one for the bank, then the real ones, and then one for Carl and I. And I remember calling Carl saying, you know, we had a problem. And he goes to business. He's afraid the business is going to go under. I said, Carl, the business is going to not going to go under. We got too many clients. We got too many customers.

Fred DiSanto (Ancora) [00:55:19]:
We're in the service business. We're going to figure it out. I said, but we're upside down with the bank. We got to notify the bank. We got to make the bank right. And it was Paul Clark from PNC Bank. I don't know if you know Paul and CB and wonderful guy. Wonderful guy.

Fred DiSanto (Ancora) [00:55:36]:
And I called him. I said, Paul, we're upside down, man. What do you mean? I said, we're upside down. We had 3 sets of books over extended on our line, and you're going to get a check-in the mail to you tomorrow. He goes, excuse me? Because I've never had a call like this. I said, well, our reputations are critical, and you guys have been a good partner of ours, and we would never you would find out at some point. And since we found out, we're telling you. And they stuck with us, they stuck with us, wrote it out with us.

Fred DiSanto (Ancora) [00:56:08]:
And that business has became a wonderful business for Carl and I. And, you know, when we had to write the check, Carl says, Okay, where do I send it to? That's a sign of a great partner. That's a sign of a great partner. And so, you know, when when you do deals, we invest in private equity funds in that and we do that. I really like the people that we invest in on the private equity side, but I do have a lot more fun on private businesses that you're active in. You know what I'm saying? It's just it's more fun. It's fun to see the growth. It's fun to see the the struggles.

Jeffrey Stern [00:56:46]:
Yeah. High higher agency, higher accountability.

Fred DiSanto (Ancora) [00:56:49]:
Right. And and I love there's nothing nothing better than a great sense of urgency. You know what I'm saying?

Jeffrey Stern [00:56:56]:
Yeah.

Fred DiSanto (Ancora) [00:56:56]:
And people that, you know, sleep it, eat it every day of their lives on how they're going to be successful, because I think there's multiple multiple paths for success in every business. Right. Just like there's multiple leadership styles. I think there's some common themes in leaders, but I do think that there's a lot of different paths you can take to success and to get you there. And having a great partner like Carl has been great for outside of Ancora, And he's been great in Coring, and he he he's done every deal for us.

Jeffrey Stern [00:57:34]:
Well, running with that idea of success, you know, you had mentioned at the beginning that it's tied to this ability to get where you are going. And so I'd love to just ask, you know, where where are you going? And, you know, what what what does it look like when you've when you've got there?

Fred DiSanto (Ancora) [00:57:50]:
My wife would would like me to say, I'm trying to get to neutral, you know, but where am I going? I my son works here at Encore. He was in New York for 6 6 or 7 years. He was working for Bank of New York Mellon, and he's a relationship manager here. I love bringing him into deals with me now so he can learn learn from some of the bad mistakes that that I have made. You know, someone said, are you going to slow down? I don't I don't know if it's a slowdown or if it's a reposition. And the reposition would be I think we have very talented people here at Ancora. John Micklec, John Bartels, Brian Spear, you know, Britney, Matt, that are very talented people. And if I have to babysit people, it's not a good use of my time.

Fred DiSanto (Ancora) [00:58:45]:
So by by, I think bringing a really good management team in here, leadership team, a leadership team in here, it allows me to do more things that I really love to do. So it's not that I'm going to slow down. It's that I'm just kind of repositioning to where I really want to spend my time on. And and I I I'll take more time off and do more things. Like, this year, you know, I never thought I'd be going to Africa. I'm going to Africa June 25th with my wife, Anna Sorvary. I would never thought in my wildest dreams I'd be going to to Africa, but we're gonna do it. And and I'm spending a little bit more time in Florida, which I really like.

Fred DiSanto (Ancora) [00:59:26]:
Still work there, but, again, just just kinda relooking at probably, not having to have so much pressure on making sure that Ankura is successful because we've got so many talented people here. We're doing we're doing all the right things, and We're going to continue to grow the firm and continue to add and continue to have success. And then, you know, I would say I do like helping people. And it's it's kind of sounds a little bit of a cliche, but, you know, someone calls and says, hey. I'm looking for a new job. I just got laid off. Is there anything you can help me with? I love meeting with people, good people that we can help. I get as much fun out of that as as anything.

Fred DiSanto (Ancora) [01:00:14]:
I will tell you one thing, and I've I've this is one thing I've preached here. The art of saying thank you and the art of writing a note to somebody has been lost. And

Jeffrey Stern [01:00:29]:
I laugh only because my mom was just telling me about this today.

Fred DiSanto (Ancora) [01:00:33]:
Really? Because I've I've told I I told my son that, and I said, TJ, here's what I'm gonna tell you. When he first got here, I said, everybody you meet, you write a handwritten note to him. It doesn't have to be long. Just just say, hey, Bob. Can't thank you enough for spending some time with me as I as I'm trying to build my career. Appreciate all the advice and help and and look forward to continuing the relationship. That's when when you get your mail, do you open up a bill first, or do you open up something that's personally labeled in your name?

Jeffrey Stern [01:01:05]:
Of course. The the personal ones.

Fred DiSanto (Ancora) [01:01:07]:
The personal ones. And I said, that art is lost. You know, a text message. Hey. Thanks for meeting today. Okay. Great. You know, it'd be nice if I got a note.

Fred DiSanto (Ancora) [01:01:17]:
What what happens is what happens is with a note, you know that person took time to say, hey. Thanks.

Jeffrey Stern [01:01:27]:
Yeah. No. And and increasingly, that matters because everything is is this vying for your time and attention. And if you can't get

Fred DiSanto (Ancora) [01:01:34]:
247 247. I I remember this is a little bit different, but I remember one of my Carl's first first deals we did. We meet with this guy and he and his partner. I go, how much money you paid yourselves? They go, like, 36,000. I said, 36,000. I said, bump it up to 50. And Carl's like, you know, I could see him go, like, the hell you doing? Right? We're we're we're only in I don't know. Now I wanna say only.

Fred DiSanto (Ancora) [01:02:01]:
I think we invested, like, a 150,000, alright, in this business. It was really growth capital.

Jeffrey Stern [01:02:07]:
Yep.

Fred DiSanto (Ancora) [01:02:07]:
And and Carl goes so they leave the room, and Carl goes, what are you doing? I go, Carl, when they start getting the check that is a $50,000 salary, they never wanna go backwards. And I said, we didn't invest in this business for $24. Alright? So about a year later, the guy calls calls us calls me. He says, you know, I haven't seen as many referrals from you as I thought I'd get. And I said, you know what, Mike? Out of sight, out of mind. He goes, what do you mean? I said, if I don't hear from you from every month, I said, you know, we're on the board. Maybe write us a check for $200 a month. I said, so when I open that envelope and there's $200 in there, I'm gonna say, what did I do for this $200? I said, I'm gonna think, hey, did you talk to this person? Hey, go call this person.

Fred DiSanto (Ancora) [01:03:00]:
And I will tell you that little thing that, you know, that personal touch, that once a once a month that grew that business from 3 or 400,000 to, I think, 7 or 8,000,000, and then they ended up selling it to a, you know, a tech company or something. And because of social media and because of the phone that's 247, the personalized touch has been lost. You know? Pick up the phone and call somebody. Hey. How are you doing? You know? You know? And and that I love your mom because she's absolutely right. The art of a thank you has been lost. My wife is diligent about that. If we go out to dinner with someone and say they happen to pick up dinner, she writes them a personal note.

Fred DiSanto (Ancora) [01:03:46]:
You know? And and I'll tell you what what what happens is those individuals that you write the note to or receive the note, I should say, are, like, phenomenal. I mean, if you get it's like getting that that email that, you know, 1 of 5,000 people are getting. You're like, how this isn't special to me. You know? But you get that note and say

Jeffrey Stern [01:04:15]:
You you remember.

Fred DiSanto (Ancora) [01:04:16]:
Yep. You know, what a great thank you. I can't take you enough thank you enough for meeting with me, for spending time with me. So and I'm so neurotic. I'm so crazy about this. I keep them all right there. Anyone that writes me a handwritten note, boom, I put it I I keep it. I don't throw it out.

Fred DiSanto (Ancora) [01:04:35]:
Because I think it's, you know, I think it's that important. You know? And and, you know, maybe when I'm gone and and I have grandkids, they may read about, hey. This guy wasn't as bad a guy as I thought.

Jeffrey Stern [01:04:49]:
You know? That's awesome.

Fred DiSanto (Ancora) [01:04:51]:
But it's, you know, it's you can really work hard, right, and do all the right things. And I always tell everyone it's the little things that differentiate you from somebody else. It's just the little things.

Jeffrey Stern [01:05:04]:
The little things matter?

Fred DiSanto (Ancora) [01:05:05]:
You know, like I said, you know, investment management, there's some great firms here in Northeast Ohio. There's some great competitors of ours. Good people. Really good people. You know, how do you differentiate yourself? Trust. Right? You know, I always tell our people, if if they can't call you on a Sunday morning at 9 o'clock, then you're not the right person for them. I tell the client that. If you if you don't think you can call me at 9 o'clock in the morning, I'm probably not we're probably not the right firm for you.

Fred DiSanto (Ancora) [01:05:36]:
You know? And investing someone's money, you can't get much more personal that they're entrusting you with their money.

Jeffrey Stern [01:05:44]:
Yep.

Fred DiSanto (Ancora) [01:05:45]:
You know? It's not like you're giving someone money. Right? You're entrusting them and being able to to to add value and being able to build that relationship. And that's in anything, though. Right? I mean, you know, you gotta be able to build relationships. I mean, I don't wanna say anything because there are you know, you you can have a great technology that people are gonna want. They could care less if you're close to them. Right? You know? But in our business, and at least in the service oriented business, it's it's critical. And even the private equity business, it's all about relationships.

Jeffrey Stern [01:06:20]:
It's all about the people.

Fred DiSanto (Ancora) [01:06:22]:
It's all about people. I mean, I I am telling you, we bought we bought a business from a guy. My partners were a guy named George Wasmer and and Tom Sullivan and Carl Grassi. Tom Sullivan's really took RPM, and now his you know, Tom is RPM is a great, great public company here in Northeast Ohio. George Wazmer had a great business. And we went, and there was a guy that George knew, 80 85 years old. This guy wasn't looking for the last buck. He wanted to sell it to people that he thought were gonna take care of his people.

Fred DiSanto (Ancora) [01:06:57]:
And at the end of the day, he really didn't own it. The shares were already to his kids, and his kids didn't want anything to do with the business. So it's really, what are we gonna do with the business? What are we gonna do with the people? And to me, that is a huge differentiator than anything that you do. And if if someone's, you know, me me me me, it's a turnoff. Right? I mean, I mean, I know what you're, you know, what you're doing now, what you're gonna be doing now. I mean, if you go to an entrepreneur and it's only about him, I I really wouldn't wanna invest with the guy. And he might have the greatest widget in the world. Right? But, yeah, I don't know.

Fred DiSanto (Ancora) [01:07:34]:
I mean, there's there's a lot of there's a lot of deals out there chasing money today as you know, And it's and I really believe it's about the people. So

Jeffrey Stern [01:07:44]:
Wow. Amazing. So much so much fun stuff there. So you you had mentioned Northeast Ohio, and I would love just to hear at a high level how you would characterize the role that Cleveland has played as part of your and Ancora story.

Fred DiSanto (Ancora) [01:08:02]:
Critical. You know, I'm born and bred here. I think Cleveland is a great. Northeast Ohio is a is a a great community where you can build relationships. And I even think people from the outside that come here say, man, I love Northeast Ohio. I mean, you know, the friendships and the relationships you can build. I do think that both Case Western Reserve University and Ignatius has played an integral role for me in Northeast Ohio. Yep.

Fred DiSanto (Ancora) [01:08:32]:
I was much more active at Ignatius than I am today, but I'm very active at at cases as sure sure that the board of the trustees. But I think that that, genuinely, people want to help people here.

Jeffrey Stern [01:08:46]:
Yes.

Fred DiSanto (Ancora) [01:08:47]:
I genuinely believe that. And I think it I I I do hear sometimes, you know, Cleveland can't fund startups. Well, I mean, we help land energy. I mean, I I can go through a number of of of startups that that we've invested in and helped raise money for. I do think working in an environment in Northeast Ohio, it might be a little easier to connect dots than it is in New York City, and I think it's easier to build relationships. And I've been lucky, you know, all my sisters, one are here in town. Most of their families are in town, and the network that you can build is great. And I I don't know if I'm not saying I couldn't have, but I don't know if I, you know, transplanted myself in Cincinnati that if I could do if I could have done the same thing that I've done here in Northeast Ohio.

Fred DiSanto (Ancora) [01:09:44]:
I I really don't. That's why we we love giving back to Northeastern Ohio charities and and causes. You know, we're big believers in Catholic education. We we support Catholic education, but, also, I think, you know, CASE, I think even really some of these these great organizations like Life Act. I mean, off the charts, what they do and how many people that they, how many lives they touch. And, you know, I go to Florida a lot, but I always say, where do you live? I live in Cleveland. You know? Yep. You know? And, and and I and I I do think that Midwestern that Midwestern style here, it's more friendly.

Fred DiSanto (Ancora) [01:10:29]:
I believe that. And I think it's it's very friendly coming into when when when you come into Northeast Ohio from somewhere else. I mean, you know, Bob King has become a good friend. His first lunch, we were at the Downtown Partners or something on real estate. It was it was their event. We Yeah. We happened to just sit next to each other, talking, and, you know, I'm moving in from Toledo. Oh, great.

Fred DiSanto (Ancora) [01:10:53]:
You know, what are you doing? Work for 5th Third Bank, running and running. Ah, that's wonderful. You know, because I'm thinking about joining a club in, and I said, oh, what what club? He tells you the club. I said, you should really join this club. It's great for it'll be great for your business. You're gonna meet all the right people. From that point forward, we've stayed friends. I mean, good friends, you know? And it just happens that way, you know, in in Northeast Ohio.

Fred DiSanto (Ancora) [01:11:18]:
You know, you talk to Eric Koehler, who came in from Minnesota, you know, University of Minnesota. He loves Northeast Ohio. Just loves it. And, you know, okay. The winners are great, but so what? Go with my drink quickly. And you can go right down the line, and, I mean, look at yourself. Right? I mean, it's good to go home. It's good to, you know, see friends and see family, but you love Northeast Ohio.

Jeffrey Stern [01:11:45]:
I do, genuinely Yeah. For for many of of the reasons you've, I think, eloquently pointed out just now. Yeah. The it's a special place. Well, that's kind of a a perfect segue to our our traditional closing question then, which is for a hidden gem of Cleveland and Northeast Ohio, something that other folks may not know about, but perhaps they should.

Fred DiSanto (Ancora) [01:12:08]:
No. That's my favorite restaurant, I'm telling you, is a hidden gem.

Jeffrey Stern [01:12:14]:
May maybe you don't wanna share it then. I don't know.

Fred DiSanto (Ancora) [01:12:16]:
No. No. I I you know, my my wife and I, I will tell you, we we live in Gates Mills. We've been there for about 5 years now. I think that the the village of Gates Mills is one of the hidden gems in Northeast Ohio. There's a great little restaurant there called Sours Sours that, you know, the the husband and wife are there every night, and it's Cleveland. You know what I'm saying? It's they welcome you. It is it is a hidden it I I I'm telling you, it is a hidden gem.

Fred DiSanto (Ancora) [01:12:45]:
And I I also think I I do think and it's not hidden, but I love going down to Little Italy, man. The people down there, my son lives there. And since he's since he's been living there, we go down a lot more than we used to. But there are so many good places to go to. The people are so friendly, and the food is is fantastic. Those are my 2 go to spots.

Jeffrey Stern [01:13:14]:
Yeah. Amazing. Those are those are awesome. Hopefully, we, you know, we don't inundate them with people now. But

Fred DiSanto (Ancora) [01:13:22]:
That's okay. They won't mind. Yeah.

Jeffrey Stern [01:13:27]:
Well, Fred, I just I just wanna thank you so much for for taking the time to come on today and and share some of these amazing stories.

Fred DiSanto (Ancora) [01:13:35]:
It it was fun, and and I love learning a lot about you when we first talked. I think, you know, you're you're you're a little hidden gem. I'll I'm telling you. Exactly. In this in this, in in our in our region, you're making a name for yourself, and I I I love I love what you're gonna do in your next chapter. I think that's really cool. And, keep doing this because I think the more people can learn about people in Northeast Ohio, I think it's gonna attract more talent here.

Jeffrey Stern [01:14:01]:
Well, thank you. That that does mean quite a lot. So I appreciate that.

Fred DiSanto (Ancora) [01:14:05]:
Alright, pal.

Jeffrey Stern [01:14:06]:
If folks had anything they wanted to follow-up with you about, what would be the best way?

Fred DiSanto (Ancora) [01:14:10]:
Email me. Fdesataway@core.net.

Jeffrey Stern [01:14:14]:
Awesome.

Fred DiSanto (Ancora) [01:14:14]:
Alright. And then I'll try to get back as soon as I can. Cool.

Jeffrey Stern [01:14:19]:
Alright. Thank you. Thank you again, Fred.

Fred DiSanto (Ancora) [01:14:20]:
Gotcha. Bye bye.

Jeffrey Stern [01:14:23]:
Bye. That's all for this week. Thank you for listening. We'd love to hear your thoughts on today's show. So if you have any feedback, please send over an email to jeffrey@layoftheland.fm, or find us on Twitter at podlayoftheland or atsternfe, j e f e. If you or someone you know would make a good guest for our show, please reach out as well and let us know. And if you enjoy the podcast, please subscribe and leave a review on iTunes or on your preferred podcast player. Your support goes a long way to help us spread the word and continue to bring the Cleveland founders and builders we love having on the show.