Having been brought up in Montana, Mr. David Leuschen of Riverstone Holdings is fervent about skiing and ranching. It was skiing led him to Dartmouth in the 1970s. His passion for ranching has made him to spend most of his time at Switchback Ranch which is almost 160 thousand acres which he owns in his home state of Montana. Mr. Leuschen is as well an enthusiastic flyer; he recently flew the aircraft for the recent European roadshow dubbed Riverstone. Mr. Leuschen he is a very successful businessman and here he shared some of the secrets to his achievements and the tenants of the culture he has cultivated at Riverstone.
Living on the edge
Majority of individuals go through life staying within the limits. If you are undergoing through this kind of lifestyle, it means that you are not taking enough risk, which is according to Mr. Leuschen. He has experienced this mindset shift in the banking sector during his tenure at Goldman Sachs in the 80s and 90s. At Riverstone, they constantly try to revolutionize, as shown by their role in developing the Master Limited Partnership ownership development.
90% of life is just showing up
Mr. Leuschen has been living with this famous line of Wood Allen’s. He believes that one must choose a profession and stick with it and that is you spend enough time learning about a business, showing up for every transaction, the prospects will come. His crews of 45 individuals are all energy-lifer who are determined in making his business successful. He pointed out that once he established Riverstone, the first two years, he thought it was the prevalent mistake in his life, nevertheless he stuck with it and momentarily the opportunities knocked.
Build ups, not buyouts
Majority of investments in Riverstone are comprised of buildups and not buyouts. Buyouts need more of a macro view, and Mr. Leuschen says that he is not good enough to do macro. He would rather concentrate on the micro perception. He further pointed out that build ups self-correct for commodity costs, individuals and conception. He says that 90% of the time, the first policy will change as you learn more about the industry and by developing up in small fragments as you can permit that.
Never try to beat the monkey
It is not a good idea to bet on the cost of products. Riverstone strains to evade at all costs circumstances where they feel as if they have one foot on the ground and one foot on board. As an alternative, Riverstone enthusiastically hedges product risks in the majority of its transactions.
Skin in the game
Individuals in Riverstone have more than 900 million U.S. Dollars of their own funds dedicated to their investments. For this reason, they sturdily pursue having their money back in the first 2 years of each investment they involve themselves into. While doing this, they will continue holding the reminder for a long term resources appreciation. For this reason, a tremendous alignment between the GP and LP has been created, and has resulted to one of the lowermost loss ratios in the field.