Josh McWhorter owns McWhorter Capital Partners, a Cartersville, GA investment fund with holdings in real estate, accounting, restaurants and out of home advertising. In 2015 the firm launched Horton Outdoor which owns billboards in Georgia, Alabama and Florida. Insider asked McWhorter to talk about out of home.
Josh what’s your fund’s investing philosophy?
Like most firms we seek to deliver total return through appreciation & income. We differentiate ourselves through “why” & our flexibility. We started officially in 2013 with roughly 40 families who invested their hard earned dollars that have given me a lot of leeway and grace in terms of decision making. The whole purpose behind the mission was a calling I had to allow partners to give more through our returns. I’m a huge believer in giving personally but realized early on I could only do so much. However, if I could get likeminded people on board, together we could create a better community. We’ve been blessed thus far & pray the Lord continues to bless as He has in the past. From a flexibility standpoint, we’re still relatively small & a private company. If I personally see an opportunity that may produce less income now but offers potential appreciation down the road, it’s allowed. Likewise, if an asset produces substantial income now but doesn’t quite have appreciation potential of others, there’s a tremendous amount of support as well. Starting in Q1 2016, we put a board of directors in place for financial & operational oversight as well as direct the future of the company.
Why out of home?
We were heavy in multifamily early on. We had a great partner in Calvin Evans, Augsburg Investments, who really helped in creating great returns for shareholders. Multifamily grew exponentially more expensive very quickly. Looking for an alternative that would prove to provide income now plus potential appreciation down the road, my eyes were opened to OOH. I was led by some of the best in the business – Eric Horton, Bob Postiglione & Jeff Lewis. These three gentlemen were instrumental to whatever we have accomplished thus far. Obviously, we ended up naming the company after Eric for his invaluable contributions to the company. Since we made the decision to go all in, I can’t get enough of it. I love the business. Outside of any potential financial benefits, there’s just a lot of good people in this industry.
What are the strengths and risks of investing in out of home?
The strength is the consistent cash flow. We’ve been blessed with some great companies that see value in advertising with us. As great as the cash flow has or can be, I sincerely hope they see a tremendous return on their investment in us as advertisers. Running multiple businesses, I see advertising as much from their point of view as I do from the OOH side. There’s a finite marketing budget so each company that spends money takes a risk and everyone at Horton takes that with great responsibility. We continually look at ways we can add value to their investment with us.
From a risk perspective, the regulatory environment seems to be tightening across all spectrums of every market. That’s always a concern, but on the bright side less available locations only adds value to existing boards. Also, compared to other industries, prices are higher. The old motto of you make your money when you buy rather than sell applies ten times over here in my view. Whatever you pay, there must be a plan to increase value. You either get better or worse, no one stays the same.
What are your plans for Horton Outdoor?
As you can tell, I’m big on people. Specifically with Horton, we were able to bring in Marshall Henderson. First & foremost, he’s a quality individual who cares for our clients. We take great responsibility in hiring anyone therefore when we made the decision to go after Marshall the goal was to grow and build the infrastructure around him to make this as a success. Eric’s son, Hunter, joined us and handles all accounts we have in the NW GA territory. We absolutely couldn’t have hired someone with more potential that had such a personal attachment to this business than Hunter. Kayla Willett just joined us in Birmingham. She wants to make this a success. From an infrastructure standpoint, Kelly Hemphill assists Marshall and all sales. I haven’t met anyone that didn’t appreciate her. Deanna Berry is MCP’s COO and oversees everything Horton among other responsibilities.
Most importantly, I was able to hire my dad, Harvey McWhorter, very recently. I asked several people who I trust if I was looking for someone with financial & operational experience – a CFO/COO hybrid – who would you hire. Most responses were something to the effect of “have you ever met your father?”
With all that said, our goal is to grow but grow as intelligently as we can. We certainly don’t want to buy dots on a map, but we do like several geographical locations. Part of growing is being sure we can handle the growth and most importantly, benefit our advertisers. This is why we made a significant investment in human capital on our side this past quarter. We have to be able to service our clients. Anyone can sell ad space, but it takes a little more to develop a relationship, create a plan & generate ROI for clients.
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