Stratford Shields

Length of experience in a role is less important than continuous innovation in a job.

 

Stratford Shields has been a leader in the municipal finance industry for more than 20 years. He has served on the municipal finance industry association as Treasurer, Vice Chairman and Chairman of the Securities Industry Financial Markets Association (SIMFA) Municipal Division. He led the effort to create a voluntary ban among securities firms to eliminate the appearance of pay-to-play by prohibiting financial contributions for bond ballot elections.

Stratford has also served as a leading investment banker in the municipal finance and privatization areas including landmark transactions for entities like the Ohio State University for its $483 million 50 year concession of its parking system which was awarded “Deal of the Year” by the Bond Buyer in the category of non-traditional financing. In his municipal finance career, he has served as lead investment banker for more than $30 billion of transactions for clients including states, cities, universities, hospital systems, airports, toll roads, water and sewer entities, state revolving funds, and student loan agencies, among others. He assisted these clients with credit strategies and transaction structuring to achieve optimal financing results.

In his career, he has served as the Head of Public Finance at two major Wall Street firms including Morgan Stanley for 5 years where he led a turnaround effort that improved the firms lead managed negotiated rankings from #10 to a consistent #4. He is currently a Managing Director in the Public Finance Investment Banking group at Loop Capital Markets (a Chicago based firm) covering major clients in the Northeast and Midwest. Prior to becoming a public finance banker he worked in politics and government with his last position being President of the State Controlling Board and Deputy Director of the Ohio Office of Management and Budget.

Stratford has B.A. in History from the Ohio State University and an MA in Political Science and an MBA from Columbia University.

Where did the idea for your company come from?

When I was the Head of Public Finance at Morgan Stanley I was working with the then CFO of the Ohio State University on a bond financing transaction and the CFO mentioned to me he was interested in privatization ideas to streamline the University’s operations as well as raise money for its endowment. In looking at the assets of the University it occurred to me that the University could privatize its parking system as it was essentially the same size of the City of Pittsburgh’s parking system which was attempting to privatize its parking system. The main campus at Ohio State is essentially a little city where approximately 100,000 people visit every day. While the privatization of the Pittsburgh parking system did not ultimately occur, after about 18 months of work on the Ohio State privatization the University ultimately entered in 2012 into a 50 year concession with LAZ/QIC for an upfront payment of $483 million. The money was put into the University’s endowment to benefit student scholarships and research, among other purposes. As the then President of the University essentially said at the time of the closing of the transaction: “No one has ever cured cancer in a parking spot but with this money maybe we can.” While the City of Chicago parking system privatization initially gave parking privatizations a bad name, we took a lot of lessons learned from the Chicago one and applied it to the Ohio State one so similar problems did not (and have not) occurred. The Ohio State University parking privatization was the first major university privatization and has been followed by parking privatization transactions for a number of universities including Northeastern University, Eastern Michigan University, among others.

What does your typical day look like and how do you make it productive?

My day in the office (when I am not travelling and visiting clients) is really devoted to thinking about each of the major clients I cover and figuring out what unique and innovative financing strategies I can bring to them. The types of clients I work with are varied and including states, cities, universities, utility systems, and toll roads, among others. By working across sectors I can look at something that has occurred in one sector and see if there is application or application with a variation in another.

How do you bring ideas to life?

I bring ideas to life by talking to clients about actions they can take and the pros and cons associated with each idea. I consider it to be crucial that I explain the up and down side of any transaction particularly as it relates to something like a privatization.

What’s one trend that excites you?

Privatization with universities and major health care systems I see as a wave of the future. Many of these types of entities are willing to be innovative and look at alternative methods for service delivery and financing.

What is one habit of yours that makes you more productive as an entrepreneur?

Extreme attention to detail and always following up on an idea with a client.

What advice would you give your younger self?

Don’t get distracted by the naysayers. Grooved thinking is a killer – just because this is the way something has always been done does not mean it is the gospel.

Tell us something that’s true that almost nobody agrees with you on.

I worked in the Ohio Office of Budget and Management in the early 1990s in a senior position. One of the people I worked with would tell me that he had 25 years of experience in his position when I would suggest a change to a business practice. It took me a while to realize he had one year of experience twenty-five times – he never changed or adapted.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Get up when you are knocked down and keep moving. It’s imperative to not slow your momentum.

What is one strategy that has helped you grow your business?

Know your clients, who they are, and why they would want to do business with you. Not everyone will do business with a smaller firm – figure out who they are and just cross them off the list. Do not try to force things that you want that are just not realistic.

What is one failure you had as an entrepreneur, and how did you overcome it?

Wasting time on transactions that are never going to occur. I had to learn how to politely but realistically tell a client or a colleague to just give something up and move on.

What is one business idea that you’re willing to give away to our readers?

Buy smaller financial advisory firms in the municipal business and consolidate them. There are only three major national players in that part of the municipal market and the change in rules for municipal advisors under Dodd-Frank has made it so that most municipal entities have advisors but the market is fragmented.

What is the best $100 you recently spent? What and why?

Dinner at a classic Italian restaurant with my wife. Time away from the focus of every day business with someone who just wants to be spend time with me.

What is one piece of software or a web service that helps you be productive?

I research multiple new services each day to keep up with my clients.

What is the one book that you recommend our community should read and why?

Liar’s Poker – still a classic more than 30 years later and the ways of Wall Street.

What is your favorite quote?

Winston Churchill: Success is not final, failure is not fatal: it is the courage to continue that counts.

Key Learnings:

• Thinking outside the box to bring about the first major university privatization in the United States
• Length of experience in a role is less important than continuous innovation in a job
• Choose clients who value your ideas

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