“We look at everything from the perspective of ‘Do any of our clients add value?’ and whether they have an authentic connection to the brand,” Wachter said. “We look for ways to supercharge the companies.”
Wachter worked with producer Jimmy Iovine and impresario Dr. Dre to create Beats, the headphones and music company that Apple bought in 2014 for $3 billion. Critical to the product’s popularity: Beats devices popping up on the head of LeBron James and his USA Basketball teammates. James and his business partner, Maverick Carter, had equity in Beats that earned them millions when Apple bought the company.
“Paul has an eye on culture and what is moving the conversation,” Carter said in an interview, noting that Main Street has a penchant for working with first-generation entrepreneurs with a natural affinity for one another. Wachter “opened my eyes to a world that was different than any I’ve ever known.”
For James and Carter, Wachter negotiated the sale of their marketing company, LRMR, to Fenway Sports Group -- Fenway Chairman Tom Werner is a longtime client -- a decade ago. The novel arrangement gave the nascent firm not only access to a bigger sales force, but came with a piece of Fenway’s ownership in Liverpool Football Club. That relationship eventually expanded to include ownership for James and Carter in Fenway’s crown jewel, the Boston Red Sox.
“Owning is the long-term play,” Werner said in an interview. “If you’re in it for the long term, that’s how it’s going to grow. They preferred getting a part of Liverpool, which they rightly believed would provide long-term upside, rather than just taking the quick money.”
Wachter also engineered the creation of Lobos, introducing the company’s founder to James, Carter and others. Big tequila fans, they agreed to not only endorse, but invest. Wachter then tapped Dia Simms, a long-time lieutenant to Sean ‘Diddy’ Combs, to become chief executive officer of Lobos.
Lobos has tripled its original revenue forecast and its tequila is now available in 33 states, Simms said in an interview. Its popularity is directly tied to Wachter “pre-curating the incredible group of humans,” Simms said. “This is a group that has a legitimate kinship with one another. It’s a bit old school.”
While Wachter has been able to steer coalitions of investors into deals in the first quarter century of the firm, the new fund gives him the firepower to more easily write checks on their behalf. Among the fund’s investors are James, Carter and Schwarzenegger, as well as well-known Wall Street stalwarts such as Apollo Global Management CEO Marc Rowan and RedBird Capital Partners CEO Gerry Cardinale.
The fund comes as valuations sink in a roiling market. The combination of accelerating ambitions and falling prices could lead to new and interesting deals.
Wachter said keeping and adding to Main Street’s roster of clients, many of whom are already rich and famous, requires delivering more than a profit.
“It’s important to us, and our clients, that we’re not just cashing the check to make a buck,” he said. “A lot of these things are fun, and it’s important that it’s fun.”
This article was provided by Bloomberg News.