Meet the Founder: Kevin Callahan

Kevin_N52A9761 (1)All that matters is delivering excellent investment performance and great client service — everything else is just noise.
That’s what Fairway founder Kevin Callahan got from his mentors, and that’s how he structured the firm. Fairway’s investment team members each have 15+ years of relationships that drive the firm’s deal flow, and the partners each invest a significant portion of their net worth in the funds. They eat what they cook. Just as importantly, a workplace that fosters autonomy and eschews bureaucracy lets them focus on serving their clients. Learn more about Founding Partner Kevin Callahan:

 

What is your role at the firm and why do you love what you do?

I do a little of everything at the firm. I was involved with designing the initial structure of the firm and our offerings. I work closely with our investment team and have a role on the investment committee of our ’40 Act registered fund. At my previous firms I spent a lot of time interacting with our clients which I really enjoy, so that has continued at Fairway as well.

It is important also to note what I don’t do. Specifically, I don’t get involved in the selection of individual venture capital and buyout funds. The real key to our success at Fairway is the great relationships that our investment team members have developed over several decades. Tom Gladden, Kathy Wanner and Laura Milligan invested with many of the best private equity and venture capital managers in the world during their time at Adams Street Partners and Boeing. This experience, and the relationships they developed over time, are invaluable and allow us to gain access to many quality funds and investments.

What does your firm specialize in and how long have you been in that space?

Fairway Capital Management specializes in private equity and venture capital investing. Our team members have been investing in this space for almost 30 years. Collectively we have over 100 years of experience in the business. Importantly, many of us worked together previously. Kathy joined Brinson Partners in 1993, one year before I did. Tom joined (then Adams Street Partners) in 2002, Laura worked with us at Adams Street from 2005–2008, and Lauren Bozzelli worked at Adams Street from 2007–2017.

What do you want to be known for?

In golf the fairway is a safe place to be — away from the rough and hazards. Consistently being in the fairway is also likely to lead to the best score.

Similarly, we want Fairway Capital Management to be considered “safe hands”, and good stewards of our clients’ capital. Our team members have been investing in this space for decades. That experience allows us to gain access to top-tier investors, many of whom have been investing in PE/VC for years themselves. However, we don’t want to confuse the idea of being “safe hands” with being conservative. Given the illiquidity associated with private equity and venture capital investing, investors rightfully expect higher returns than they do from other asset classes.  We want people to think of Fairway as an experienced, thoughtful private equity and venture capital investor that consistently strives to deliver great performance.

Ultimately, we want to be known as the firm that:

  1. Delivers excellent investment performance for our clients, and 
  2. Has the best possible alignment of interest with our clients. We do this by investing a large portion of our personal net worth in our funds right alongside our clients. Further, our fee schedules are heavily tilted toward performance related fees rather than management fees. The old saying in the investment management business is that you want to make sure your manager has “skin in the game.” We take this to an extreme.

Who is/was your mentor or who do you look up to in our industry?

I started in the investment management business when I joined Brinson Partners in 1994. We had a few ownership structure changes over time, but essentially I feel like I stayed in the same organization until I left Adams Street Partners at the end of 2016. I have been very fortunate to work at a couple of great firms and I learned a lot from many great investors over the years. My long history in the investment business allowed me to observe many different types of organizations and investment styles. This was very helpful as we were setting up Fairway Capital. While we were starting from scratch, we did so with the benefit of seeing for 20+ years what works well and what doesn’t, what we like and what we don’t like, etc. I think we have a unique structure that ensures that all our team members have the appropriate incentives and maximizes the likelihood that we will deliver great results for our clients. Most investment firms are focused on growth — raising assets and gaining scale. Our goal was to structure the firm in a way that rewards performance, provides great alignment with our clients while also fostering an enjoyable, rewarding work environment with plenty of autonomy and very little bureaucracy.

In terms of mentors, I think I have to go back to my first bosses at Brinson Partners, Gary Brinson and Nick Rassas. Gary was the CEO and CIO and clearly the driving force of the organization and really an investment management industry pioneer. Nick was the Head of Client Service. Gary and Nick instilled in me early on that the only things that matter in this business are delivering excellent investment performance and great client service — everything else is just noise.

IMG_3512Where do you live?
What’s a go-to spot you recommend to visitors?

We live in a western suburb of Chicago. For many years I commuted on the train to an office in Chicago. Obviously for much of the last two years we have been working remotely, so I have been working mostly from home. Just in the last few months I have started to go into the office 3–4 days a week, so it is nice to be back on the train going into the city again.

As far as go-to spots for visitors I would recommend one of the many great restaurants in Chicago, combined with a sporting event. There is nothing better than a baseball game at Wrigley Field on a nice afternoon.

What do you do when you aren’t working?

My wife and I have four children that are now grown, but for years, most of my time away from work involved some type of kids’ activity. We still like to go on family vacations and those almost always include a beach. I love to play golf, so when the weather is nice that is what I do most weekends. I am also a big sports fan, especially college football. We try to get to 1–2 Ohio State football games each year.

Where is your favorite place that you have visited? Or place you’d love to go.

We have been going to Kiawah Island, SC for vacations with our extended family for 30+ years, so that is definitely our go-to destination.

 
What is your favorite book or one you would recommend?

I try to rotate between investment-related books and others that can be on any topic. One of my daughters is constantly trying to expand my horizons with different book recommendations, which is great. Those books are typically historical or political in nature. My three most recent reads are:

“The Future of Money” by Eswar Prasad

“What it Takes” by Steve Schwarzman

“The Confidential Guide to Golf Courses” by Tom Doak

What is your favorite tv show, movie or music?

I would say music/concerts. One of the things we like to do a lot, both my wife and I and as a family, is go to concerts. That is something we definitely missed during the pandemic lockdowns. In terms of genre there is a good variety, but most would probably be considered classic (old school) rock. We are all big Bruce Springsteen fans, so he would be #1 on our list. I think my wife and I have seen the E Street Band about 20 times or so, including about 10 that included our whole family.


What is a quote that inspires you?

I love to read commentary from industry luminaries such as Warren Buffett, Howard Marks and Jamie Dimon, so I quote people like that a lot. If I have to pick one, my favorite investment-related quote is usually attributed John Templeton who said:

 “It is impossible to produce superior performance unless you do something different”

 

The investment business is very competitive, and our clients pay us fees to deliver superior investment performance. If our portfolio looks like everyone else there is no way we are going to deliver what our clients are paying us to do.

I thought of this quote a lot also as we were designing the structure of Fairway Capital. It seemed to me that most investment firms were using the same playbook, so we wanted to do something different.

Outside of work, what is something you are passionate about?

I am on the Board of The First Tee of Greater Chicago which is a fantastic organization making a big impact on a lot of kids in Chicago. The First Tee does a great job of giving kids that otherwise wouldn’t have the opportunity a chance to learn and the play the game of golf, while also teaching valuable life skills.

My wife and I support local organizations that are doing positive things for kids in Chicago, most notably UCAN and HFS Chicago Scholars.

I also like to support my alma maters, so I am on the Private Equity Advisory Council at the University of Chicago Booth School of Business. In addition, I support Ohio State University (which also helps me get football tickets).
 

In golf the fairway is safe, away from the rough and hazards, and the team at Fairway offers a strong commitment to stewardship. Consistently being in the fairway also tends to produce the best score, and we’re grateful to Fairway’s founder for sharing the secrets to his success, both at work and at play.

Learn more about Kevin Callahan, the principles and story of the firm, and the differentiators Fairway offers investor in our upcoming webinar.
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