In 2006, Crown Castle International purchased Global Signal, a cell tower company in Sarasota, Florida, for $5.7 billion. CCI is the nation’s largest provider of wireless infrastructure. As a result of the sale, investors made more than 12 times their original investment, with the Global Signal team making $100 million. Former president of Global Signal, David J. Grain, led the charge during the company’s incredible four-year turnaround.
Although this was a monumental achievement, for Grain it was only the beginning. In 2007, he built Grain Management L.L.C. with $5 million of his own money, venture capital from General Catalyst Partners, and Sutter Hill Ventures. Over the next three years, Grain Management went on to acquire 50 cell towers.
Now, Grain Management (No. 7 on the BE Private Equity list with $900 million in capital under management) has grown into a powerhouse, with two funds: Grain Infrastructure I and II. The company acquires, builds, and owns wireless infrastructure assets across North America. It also holds wireless spectrum licenses and issues spectrum-backed securities. That’s why we’ve named it the 2015 black enterprise Financial Services Company of the Year.
Building Grain Management
Raising the $109 million he needed to build his business and accumulate funds took Grain almost two years–a task made no easier by the 2009 financial crisis on Wall Street. Grain, undeterred, decided to take his money-raising efforts down a nontraditional path: the academic investment community. He met with more than 180 people, including heads of foundations, colleges, and university endowments.
“The approach they take is a reasonably intellectual one. If you’re fortunate enough to attract their capital, it’s a great endorsement that, OK, you’ve passed the test and have some level of credibility,†says Grain.
Former Duke University investment manager Ed Hutchinson worked with DUMAC–a professionally staffed investment organization run by Duke–when the decision to invest in Grain Management was made. Hutchinson was as impressed with Grain as Grain was with the academic community.
“The reason we elected to back him is he’s just one of those people that, for lack of a better description, had ‘it.’ You just knew he was going to be successful and [that he] was someone you, whole-heartedly, could trust to do the right things. This was clearly demonstrated throughout his career,†says Hutchinson.
(Continued on next page)