Eli Manning Goes Long Private Equity

Episode 70 of The Investopedia Express with Caleb Silver (Jan. 24, 2022)

Super Bowl champion, Eli Manning, joins the show in just a little bit, but roll down the window because sentiment stinks right now in the stock market. U.S. equity markets are coming off their worst week in nearly two years and headed for more losses as we start the week. Netflix, one of the best performing stocks of the past 10 years, fell nearly 22% on Friday, its worst day since 2012. Shares of Amazon posted their worst week since 2018, and they're down 20% from all time highs. Tech stocks, as Liz Young explained to us just a few episodes ago, are super sensitive to rising interest rates, especially as their growth rates are slowing down.

This week will also bring a steady stream of earnings, including reports from some of the most valuable companies by market capitalization, with widely held stocks reporting results, including Apple, Microsoft, IBM, and Johnson and Johnson. Investors have no patience for missed earnings estimates or weak guidance. They punished Netflix last week for missing its subscriber growth targets, sending the stock down 25% in one day. Apple and Microsoft are the most widely held stocks in the world. As they go, so go the markets.

Meet Eli Manning

Eli
Image courtesy Getty Images / Brian Ach / Stringer.

Eli Manning is a former U.S. football player who quarterbacked the New York Giants to two Super Bowl championships (2008 and 2012). After retiring in 2020, Eli later became an NFL analyst for ESPN and currently hosts Eli's Places. He is also an investor and joined private equity firm Brand Velocity Partners as a partner in early January of 2022.

What's in This Episode?

Subscribe NowApple Podcasts / Spotify / Google Podcasts / PlayerFM

If I had a successful 16-year NFL career in which I won two Super Bowls, was selected to four Pro Bowls, and set every passing record possible for the New York Giants, I might be just fine with taking my talents right back home to New Orleans, playing in a few celebrity golf tournaments, endorsing some local car dealerships, and getting paid on the speaking circuit. And Eli Manning seems to be just getting started only two years out of the league. He's one of the most popular celebrity athletes out there today. He's on ESPN2 with his brother, Peyton, with their highly entertaining simulcast on Monday Night Football. He's got his own docuseries on college football. He's a huge philanthropist, an investor, and now a player in the world of private equity, and he is our special guest on the Investopedia Express this week. Welcome, Eli.

Eli:

"Thank you, Caleb. Really appreciate it."

Caleb:

"It's really a thrill to have you here. You recently hooked up with Brand Velocity Partners, which is a private equity firm here in New York. We hear a lot about celebrities and celebrity athletes getting involved in venture capital or late-stage financing. But what is it about private equity that interests you, and why Brand Velocity partners?"

Eli:

"You know, when I retired from football, I knew I wanted to get into the business world; it's something that alway interests me. I just never had the time to really do it. All my focus was on football. I knew I had such a small time to play this game, and if you didn't spend all your time doing it, it would end really before you wanted it to end. And so, when I retired, I knew I wanted to get into the business world. Really spent that year and a half just talking to different people, talking to different companies, trying to find what interests me and what field."

"And you know, I see a lot of people in the venture world, and I get it. It's exciting, and I'm definitely investing in certain things in venture and kind of getting away from some of the fixed income because you're just not getting much for your buck anymore in that field. And so in venture, you hear the stories and you hear the people, 'Hey, I got in early on this company and it's blowing up and you've made, you know, 20x' and it's exciting, but you don't always hear about the stories of the 15 other companies you invested in that didn't work out. And so, you kind of have to learn about that with private equity."

"And I think that's the great thing about BVP is that getting involved with them, learning how they they work, their core values, I've got to know them through an investment in a company called Barbecue Guys early on. And so, what I saw with them is that, you find a company that has a place in the marketplace you acquired, but then you're able to grow that company through marketing and through your experience. And so, there's this a little bit less of a downside and going the wrong way, but you still get the see companies grow and expand. And so, that's kind of just made me more comfortable and excited about that. I was a marketing major in college, so the idea of be able to grow it through the marketing and also in private equity—it's always the numbers. I mean, if we do nothing with the marketing side, you want to buy companies that are going to be successful and continue to be successful, but can you grow with that much more?"

Caleb:

"You are a marketing major at Ole Miss. Nice to see you be able to use your major in this part of your career, but you've been using it the whole time, marketing, obviously, your own image and all the great work you did around that. But PE, as you know, Eli, very hands on. Venture capital, you place some bets. Public investing, you place some bets and hope for the best. But in PE, it's very strategic. It's very hands on. You've read a lot of playbooks, you've studied a lot of defenses. This is sort of 'get your hands dirty; type of thing. Is that something that interests you as well, just given the way you'd like to think in the way you operate?"


Eli:

"Yeah, definitely. And I think that's how I always operated for my own marketing standpoint and doing endorsements. You want to align yourself with companies that you believe in. You use their products, you believe in their values of what kind of business they are and company. And so I think it's the same thing, for BVP and us, is looking at companies that align with our core values, align with companies that, 'Hey, we get along with the people, with the owners. We understand what they've been doing, how they treat people, and how we want to grow their company and being on the same page.'"

"And so, I think it is, like you said, getting involved, getting to know the people and giving back to the employees. And that's the one thing that attracted me to BVP is they have this Share the Gains program where 10% of our carried interest goes to the employees. And so, that resonated with me so much. Just coming from a team aspect in an organization and football—like when you win a Super Bowl, it's not just the players and coaches that get that Super Bowl ring, it's the equipment managers, it's people in the cafeterias, people who work in the training room, in the film room. All of those people get a ring. All those people are involved in that championship and get to say, 'Hey, remember when we won a championship back in 2007?' They all get the say that, and it's not just the players, it's everybody in that organization. So you want the whole company all working together, all coming together, excited about the growth and the advancement and the success of the company they're working for."

Caleb:

"That's not very usual, folks. Listeners out there, PE is usually not giving money back to employees. They're looking for ways to cut costs. So, very unusual and interesting model at BVP. And you mentioned Barbecue Boys, one of your first investments there. What brought you to that investment? It's investing in what you know, I assume you're pretty good on the grill, but also you had some friends and folks who kinda turned you on to that investment as well, right?"

Eli:

"Yeah, well, it got started just because they're a Louisiana-based company, based in Baton Rouge. We grew up in Louisiana, so it was brought to us just by a connection at BVP who knew my agent. And so, just the idea of 'This is a Louisiana company. We know the man is from Louisiana. You want you to look at this.' And so, my team and people who I've used to help me in my investing world as I was playing that I've stayed on with, looked at it, liked the idea. So all of us, my brothers, my dad, all invested in it. And then a year later, we're asked to be brand ambassadors for. And obviously, you know, it just made sense."

"And again, it's about aligning with the company that you believe in. It's barbecue grills. It's really outdoor living. And so, that's something. We grew up outside, 'Hey, the grill's on, you're cooking burgers, you're having chicken, you have friends over, you're playing pickup basketball, football in the front yard, and swimming. And you just saw that people still do that, especially now during this pandemic, is you're investing in your home."

Caleb:

"Who's out there in the celebrity athlete world that you grew up watching or you sort of admired from afar and you said, 'I kind of want to model my sort of post-playing career after what they're doing as investors?' Who's out there for you as a North Star?"

Eli:

"You know, I think it was what Steve Young has done in private equity, he kind of set the tone and really set the standard from that way, I think. Not only mentioning 49ers quarterbacks, but Joe Montana has done a great job and talked to him, and he's obviously gone more it that venture world but been successful. And so, I think those are two of them that I think have done great. And so, I think it's just really try to find something that you're passionate about, something new, and you want to work towards, you like working and learning about."

"And that's the thing for me. I enjoy learning about private equity, and a lot of it has just been, being on calls, taking notes, finding, 'Hey, how do I learn more?' You know, how can I read? Is there a fellowship? Is there some things I can get caught up to speed on some of these terms? So, I enjoy that process when I played football. I enjoy watching the film, learning about defense and that grind, so it gives me something that, 'Hey, I have a lot to learn. I'm new to this, but I need to learn the words and the meanings and the saying so I can have a better feel for what you are talking about and eventually got to bring my own knowledge to the game and be able to have a better sense of what's going on.'"

Caleb:

"Yeah, I mean, I have a great website to recommend to you that has all these investing and finance terms for free. We've been around since 1999, so any time, Eli Manning, you want to come check out Investopedia. The door is wide open. You earned a lot of money in your playing career, and I mean you earned it—with your resilience to consecutive game streaks, the sacks, the triumphs, the Super Bowls. You also had the benefit of guidance from your dad and your brother who played in the league. But what do you wish you knew financially when you started out that you know now, now that you're retired?"

Eli:

"You know, I think I did a good job with my finances and understanding that I didn't know a whole lot about it, and that I needed to have a strong team to look after me and help me, kind of guide through through that time. It's a different deal, and all of a sudden you're 23 years old and you get that first paycheck and you're like, 'What do I do this deal with this? How do I use this the right way and get it into the right... whether it's stocks or an index fund and those things. How do I invest in the right things?'"

"And being a celebrity, and being in the spotlight, it can be good. You can get access to a lot of things, but people have access to you and you can kind of get some great opportunities and you can get some terrible opportunities, in that that I didn't know the difference between those two. And so I brought it to my team who I trusted and my guys and let them vet it. You know, it could be from a great friend of mine who gave me this idea. If my guys said, 'Hey, I don't like it,' then I told my guy, 'Hey, it's not for me. Thank you very much. Thanks for bringing it.' But you've got to be smart with that."

"And so I think it's just about understanding at that stage, when you're young, you're making money, there's money coming in, you don't have to be risky with your money. My dad used to always say, 'You can never go broke making a profit.' And a lot of it he was talking about football, just being, 'Hey, take completions, find completions. Be smart with it, and you'll take your shots.' But it's kind of coming from, 'Hey, that's where the defense told you to go. They were giving that up. So that was a smart play to take it.' So, I kind of take it the same world in investing. 'Hey, do the smart thing. Take your completions, go with the companies that you trust, that are doing things well.' Every once awhile you hit the home run, you get one that just goes great, but you're avoiding those negative ones. You're avoiding the disasters and stayed away from those that have a chance to really go the other way and go sell."

If your investment is down 25%, you need a 33% return to break even. If your investment is down 50%, you need a 100% return to break even. If your investment is down 75%, you need a 300% return to break even. As you think about our thresholds for losses, keep that math in mind. How much can you take? You can always put stop losses into your stocks, ETFs, or mutual funds, and you can always keep your eyes out for bargains to add to your watch list amid a sell-off. But know your threshold.

Caleb:

"That's at risk management that we talk about all the time, so important, and to diversify because one thing can take you down if you're not diversified across asset classes. Folks know that, but it's so hard to pay attention that when you're watching and you're having that fear of missing out, watching other people make those gains. Our listeners will remember we had Joe McLean on. He's a financial advisor to celebrity athletes. And the thing, Eli, that he said that resonated with me so much was young people, especially young people coming into money, don't know what it cost to be them. What does it cost to actually be you and be the you you want to be and determining that and becoming the CEO of your own life? So important. I want to talk a little bit more about financial literacy for pro athletes because it's a big deal. And these are, in a lot of cases, young people. You were 23, but a lot of folks are 18, 19 coming into pro leagues now or even the college athletes getting paid. What was available to you in terms of financial literacy when you started within the league, not outside, through your family and through your connections, but what was available to pro athletes then and now?"

Eli:

"Well, it's really expanded, and it has got better. What the athletes, pro athletes, and the NFL does a great job of having internships with companies that you can join for during the off season and there might be six weeks. It's not you the whole time where, 'Hey, you still got workouts.' And they work around your schedule. There's different kind of programs and initiatives you can join and go for a seminar for a long weekend or a week here or there during that off season as well. So there are a lot of great programs that kind of help you find different fields that you might want to go and do, whether it is broadcasting or whether it's business or different types of finance or real estate and where you can go kind of get that internship, learn as you're playing the game. So when you do eventually retire, you have kind of a direction or you have that idea of where you want to go."

"So I think the NFL does a great job of giving guys those opportunities, and a little bit you got to be in charge of your own opportunities, in your own life, and decide what you want to do, what's important to you? But there are the options out there for you to take advantage of it, and a lot of guys are doing it and you see more guys, especially in basketball, you see that they are getting involved more in businesses and starting companies and teaming up and and getting their investments on track while they're still playing. It used to be like, 'Hey, don't let anyone see you do anything besides your job and your football.' But now there are opportunities, and it's about being smart. If you can get teamed up with the right people, there are ways to do both of them and do both well."

Caleb:

"Finding the right team, though, so important in that aspect and in every aspect of your life and career. So, let's take it back to Ole Miss. If you were in college now back at Ole Miss and you were A marketing major like you were, and now the college athletes can get paid for their likeness, what NFT would you create of yourself if you could and sell? This would be an easy one for you because you were that marketing major and you already had a celebrity profile by the time you were playing college ball."

Eli:

"I think you had to be very careful with the NILs and with the college football, and I think there are examples where if you're thinking you're gonna be a great player and you have a chance for an NFL wife, you got to be careful all the sudden taking these little deals and taking a little money here and there and being overexposed and get connected with things for some money. But all of a sudden, you get to the NFL and you wouldn't have the same opportunity with endorsements. You kind of blowing through some relations. So, it is a little scary in that sense. I think if you look at Trevor Lawrence or somebody, if they had that going and if he took some NILs and all of a sudden he might not be making the same money off the field that he is now. And so, I think it is dangerous, and you have to be careful."

"I think also for me, personally, I think as an athlete you got to earn... I see it in the NFL. You don't want to, all of a sudden, come in the NFL as a rookie and start doing tons of endorsements and being all over the place. You got to earn the respect from your teammates, from everybody, that you're doing it on the field before you can kinda do it off the field and be that face of different companies. And so, I get worried about in college, that all suddenly these guys that haven't earned it on the field and coming in and they're making money and they're in billboards, they're doing car deals and they're talking about the other stuff instead of, 'Hey, are you in your playbook? Are you amongst the team? Are you earning the respect from that left tackle? He's not getting paid anywhere, but he's protecting you as a quarterback.'"

"And so I think it's really about, at that stage in college, 'Hey, invest in yourself, believe in yourself, work on your skills to eventually, hopefully make it to the professional level, where you'll get compensated very well and have a greater opportunity for marketing deals.' But I think if you have earned it and you're a junior and you've played two years and you've been at the same program and there is an opportunity to make a little money... I think it's great to do it, but I would also probably, at best, be a little bit more conservative and not create my own NFT. But maybe, you know, get into a stock, get into an index fund, something like that."

Caleb:

"What's the best investing advice you ever received, and do you remember who gave it?"

Eli:

"You talked about it a little bit before, just with my dad. Just, 'You never go broke taking a profit.' It just resonates for so many things, and it's more than just investment, but just a way of life. in a sense. You don't bite off more than you can take, and it's about making profits and you don't have to swing for the fences, bringing in a lot of sports analogies here, but you don't have to the swing for the fences every single time. It's kind of, 'Hey, get those base hits, gets those base hits, and eventually you'll have that great connection that no hit the home run without trying to do it.' And so, I think that's really the way I've invested, just being smart, using your money the right way for me. You know, it was kind of always the idea of, 'Hey, I'm not going to touch my salary from playing football and that's what I go towards, just investing it. Get that money working, making profits. I'll try to spend off my endorsement life.' And, that's kind of my my spending money to buy the things I need and live that life. And so, I think that was the idea of just you get that money working in a positive way, making those profits. And you'll be safe."

Caleb:

"Were you actually that regimented about it, saying, 'Salary goes to investing. Endorsement money, I can do other things with that.' Did you actually have the buckets like that set up for you?" 

Eli:

"Yeah, that was the idea. That was the buckets, and that was kind of what the team thought well about it and eventually could put more endorsement money towards investments, also. And it all just kind of lumped together. So, it's just about having a plan. Just like a football, I wanted to be coached at. Every quarterback coach that I had, even in my 17th year. If we had a new one, it was, 'Hey, I want to be coached, I want to be coached up. Tell me if I'm doing something wrong. Tell me how I can get better.' It was the same conversation that I have with my team, from a marketing standpoint, from a financial standpoint, with my investments. 'Tell me if I'm spending too much. Tell me what my budget is this year.' Make sure I'm living within my means. And so that's always been a conversation, understanding what's going out versus what's coming in and understanding how to be safe with that and where we can make improvements."

Caleb:

"Yeah. And you want that awareness. You got to have that awareness. OK, I got a question that only a NOLA boy would know, and I don't want to start a po' boy battle down there. But are you a Domilise's guy or a Mother's guy? Very important."

Eli:

"I'm a Domilise's guy. So, it was close to the house. It was close to my high school. You know, my junior, senior year, we got that we could leave for lunch during high school. So the drive about four minutes away and get Domilise's shrimp po' boy dressed to the nine and some Zapp's chips. And you know, it was it was pretty good living at that time. So, it's tough to get a po' boy at this moment in New Jersey. So I called my brother, Coop, yesterday, who lives in New Orleans. He was eating a po' boy at the time, so I was very jealous."

A po' boy in an iconic New Orleans sandwich. It typically consists of meat, often fried seafood or roast beef; the "fixin's" (i.e., pickles, hot sauce, lettuce, mayo, and tomatoes); and locally made French bread.

Caleb:

"Yeah, I'm salivating now thinking about it. I can't wait to get back down there and have one. Well, Eli, you know, we're a site built on our investing terms. What's your favorite investing term if you have one? And why does it mean so much to you?"

Eli:

"I guess the one that keeps popping up more and more in my new world for private equity is EBITDA. You know, it's one of those ones, a year ago, I'm sitting on some of these calls and learning about the private equity and you hear it kind of being mentioned the bunch and I was like, 'All right. I might try to write it down. How do you spell EBITDA?' Like, I don't even know what the letters are. And so trying to look on Google to type it in, to find out what it means and try to spell it correctly and understand and admit, 'What could it possibly mean?' So, it's one that comes up, and it's obviously just trying to find the ability for that company to create cash flow. But not it's not the all and deciding factor. There are definitely other things involved in the growth and the maintenance of the company that brings down that number. But it's something that comes up and just kind of a fun word to say."

Caleb:

"Certainly, and it's one of the most popular terms on Investopedia, so you're in good company there. Earnings before interest, taxes, depreciation, and amortization or earnings before everything else that you have to pay for. But that's a key metric for companies, especially public companies. It has been a real delight to talk to you. Eli Manning, you are all over the place. But our former professional football player, Super Bowl winner, philanthropist, now a private equity partner and just a delight to have you on the Express. Thanks for spending time with us."

Eli:

"Oh, sure thing, Caleb. Lot of fun."

Term of the Week: Average True Range (ATR)

It's terminology, time time for us to get smart with the investing term we need to know this week. And this week's term comes to us from Sonia in Tuscaloosa, Alabama. Sonia suggests average true range, and we like that because it's a technical analysis indicator introduced by market technician J. Welles Wilder Jr. in his book New Concepts and Technical Trading System. It measures market volatility by decomposing the entire range of an asset price for that period. The true range indicator is taken as the greatest of the following: the current high less the current low, the absolute value of the current high less the previous close, and the absolute value of the current low less the previous close.

The ATR average true range is then a moving average, generally using 14 days of the true ranges, and expanding ATR indicates increased volatility in the market. A reversal in price with an increase in ATR would indicate strength behind that move. High ATR values usually result from a sharp advance or decline and are unlikely to be sustained for an extended period. A low ATR value indicates a series of periods with small ranges, quiet days. These low ATR values are found during extended sideways price action. Thus, the lower volatility. A prolonged period of low ATR values may indicate a consolidation area and the possibility of a continuation move or a reversal.

Good suggestion, Sonia from Tuscaloosa, Alabama. We love a good technical analysis from around here. We're sending you a pair of butter soft and elegant Investopedia socks for you to wear on your next saunter down to the river walk along the banks of the Black Warrior River.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. New Orleans. "The Po-Boy."

Take the Next Step to Invest
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Service
Name
Description