Multi-strategy Global Capital Solutions Ft. Dan Galvanoni of DPG Investments

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Hey, we are at the Beverly Hills Super Summit with the Family Office Club. I've had the privilege to meet Dan Galvanoni. Did I say that right? Yes, sir.

Okay, good. Italian.

Good. It's a little tricky. Yeah, got to talk to Dan. Very excited for him to sit down with us and just share a little bit about his background and what he's doing. Dan founded DPG Investments. Family office in 2004. And yeah, just excited to hear more about what you guys are doing. So would you share just a little bit about how you founded DPG and maybe a little bit about your background?

So DPG does a couple of things. We're a multifamily office, more in allocating to alternatives. We're a merchant bank, and then we're also a private equity firm for special situations. Founded this company. I was an elite college basketball player, so I was always an entrepreneur and dealing with coaches and then bosses early at Lazard. I just wanted to strike out on my own. And then I obviously saw significant success with my father's success with Telzon, which we controlled 90% of the global handheld barcode reading market.

Wow.

It's easy to read about business success in books, but when you actually see it and you're on the private planes and you see, you know, the public stock splitting and acquisitions and the excitement makes you so hungry to want to do it yourself in some capacity and also makes you believe you also can do it yourself.

So you decide you want to do it through private equity in general. Is that, is that right?

Or financing? Just providing capital. Initially we started, we're doing venture capital and then we got into real estate. Now infrastructure, private credit. We've now built this specialty multistrategy business where we'll learn a business and go into it. We believe that we can bring capital to anything. So what I wanted to do was be a capital provider to anything I believe in.

Yeah.

Now that's easier said than done when you're starting. Sure. You have to get to know all investors and operators in various sectors and get the right executives and all of that. But after 23 years of working at it every day, now we're doing it pretty good. Mm-hmm.

How— so you don't hear very often that people start or found a family office How did you get your first couple of investors and then how did that turn into more? How did that grow?

So it's hard when you're young because no one really believes in you. Yeah. My father's success, I used quite a bit to get into doors with people.

Sure.

But then as I started to get to know some of the sons of these families and then I started completing deals, they started taking me more serious.

Yeah.

And then probably, you know, 8 years into my business, takes about 8 to 10 years, people will watch you.

Yeah.

Not do any business. And then they started asking me what I'm doing. And then I started doing a few blockbuster deals with guys like with the Bren family or with Sarver's group on National Yards. I told you about that, other families here. And then you start speaking at conferences and now you're, you know, you're now becoming a household name in the industry.

Yeah.

So, you know, if you got a $20 billion client, the $100 million guy would love to work with you too, right? So that's his business, his affiliations and What have you done?

Yeah.

You know, when you start building that track record, people listen to you.

Yeah. Yeah, it does. It does take time to build up a super long time.

A lot of nos. You cannot take it personal. You cannot take these nos personal.

My background, I didn't share this with you, but I was a financial advisor and it took a super long time to build a large practice, over $1 billion by the end. Wow. But it took 15 years to get there. And a lot of that growth happened towards the end. It just— it's slow grind and slow build. So for a long time. But yes, you stuck. You've been sticking with it and having some great success. So I can appreciate that.

Yeah. Not many programs will tell you how hard it is to be. Yeah. You look on the internet, you see these pictures of, you know, Bentley, all of that lifestyle. But few entrepreneurs will tell you the depth and the darkness it takes to build something big. That's right. And it's hard work, but you can get there and it's very satisfying too, actually.

Yeah.

Do it.

Yeah, that's absolutely true. Yeah, great. So you're here, you're talking at the conference, you're one of the speakers. Yes, sir. What are you guys focused on right now? What are you excited about right now? What are you allocating towards?

Well, America's changing fast. So it's changing in terms of people are moving out of states and going to different demographics.

Yeah, that's right.

You know, 10 years ago, All Asian and foreign investors wanted major city office at low cap rates. You couldn't bring them any other deals. They wanted LA, San Francisco, Chicago, New York office. Now look at it.

Yeah, decimated.

Gone. So we're looking in these new growth markets. There's significant distress. American lower middle market entrepreneurs are under pressure. The guys with the $50 million companies and deals below. They need capital. They need access to capital. Yeah, they're under pressure. Commercial real estate's being killed. We're very heavy in that and we're just trying to save American entrepreneurs. I mean, it's, you know, a lot of this stuff is created by the government. I mean, all of the bloodbath in the office space would have never happened without people shutting down, not going to work. So sure, some of this stuff's been manufactured and we want to be able to get people into new capital structures and get Tired money out.

Do you look at other real estate anymore? I know you're—

Everything. We look at everything.

Okay.

Every real estate, every type of operating company, especially finance, infrastructure. We look at all of that software. Software. We don't know that stuff as well. We'll look at software. We want to get into that. We want to get to healthcare. I mean, it's just getting so big now. It's half of our economy, you know?

Yeah.

I want to start getting into these other sectors, but we've been, you know, a hard asset player. Anything that something goes wrong, we can grab. Yeah, something.

Now, do you guys— are you a sponsor for a deal? Do you co-GP on deals with other sponsors? How do you get into real estate deals?

So we don't sponsor anything directly. I only work with world-class or strong regional operating partners who've been doing something successfully for a certain amount of time.

Yeah.

And then we'll either co-GP with them and allocate capital or allocate capital as an LP. Or we'll do a merchant banking arrangement with them for some type of programmatic capital arrangement. And, you know, private capital is hard to find. It's not like going to a bank, you know? So we'll structure it for them, and depending on what they need or where they're at, we'll get a different arrangement. We're flexible and we're very creative with each counterparty.

Yeah. You mentioned private credit. I mean, we think there's a great opportunity and a lot of appetite for private credit right now. Is that something you're—

I say it's the fastest-growing asset class, private credit and infrastructure. Absolutely.

Certainly here at this conference, I'm hearing a lot of people who didn't have private credit that are now starting to offer it. So yeah, there's—

I think banks are holding $800 trillion in debt and then private credit funds are holding $1.8 trillion in debt.

Wow.

They're 4 times the size of our banking sector now. I haven't heard that number, but That's how big the—

I know—

ecosphere has become of private equity providing loans.

Yeah, sure.

It's a great business. Great. It's a great business. Yep.

So in terms of if someone were to bring a deal to you, what are you interested in? Is it— do you look primarily at areas that you already have a presence? Do you look at— look for higher returns?

We've always tried to be open-minded. We've never wanted to be a group that says we only invest in California and multifamily. We always wanted to listen.

So you want to be opportunistic, opportunistic.

If it's got returns, we're going to listen. If we don't— if it's dentistry roll-ups or something we've never even done, or manufacturing of, you know, tractor equipment, we'll learn it if it makes money. And yeah, and learn on the fly and then be able to deliver capital.

Yeah, great.

So we're always learning and we, you know, we're always wanting to get new sectors that that is scarce, capital scarce, and be able to be the provider.

Do your investors come to you for that or do they give you sort of a mandate of here's what we like, can you find it?

Yes, we have various investors, various strategies, and some of the vanilla real estate strategies. We have 20 various buckets that we know what they want and that's what we're doing.

Yeah.

Some of these mandates that we're going in with entrepreneurial capital, we're doing that with ultra high net worth families or billionaire families or very rich families. We're doing that on the fly. They're kind of creating these products and it's really as good as a salesman you are.

Sure.

So what we— instead of telling the market how we invest, we want to hear from them. What do they need?

Yeah.

What do you need? And then we'll listen to them and then we'll say, well, does this work or does this work? We'll suggest things. And that's how we kind of look at it because we think Wall Street's kind of got its nose up. They're too good for people and then they don't even listen.

Sure.

So I listen to what the guy actually needs. I'll tell them what they do. I only invest like this.

That's what we offer.

Yes, but sometimes maybe they need a little bit different. We could tweak it, but you're close.

Yeah.

If you listen to the guy. So we try to listen and we want to be more of a blue-collar firm, you know, in terms of treating people with respect. Yeah.

I love it. Dan, I appreciate it. I appreciate the time.

I appreciate you.

Yeah.

God bless you, my friend. You too. Thank you.