February 1st, 2010 | 6:00 am

Voice of Experience: Lynn Tilton, CEO, Patriarch Partners

filed under Voices of Experience

Image courtesy cnbc.com.

By Pamela Weinsaft (New York City)

Over the course of her 28-year long career, Lynn Tilton has walked a winding road from Yale to her current position as CEO of Patriarch Partners, a $7 billion investment firm.

At the age of 25, Lynn Tilton was the single mother of a 2 year old, working 100 hours a week and putting herself through business school. An overachiever from a young age, Tilton played on the national tennis circuit while growing up and went on to play tennis for Yale. Her life turned upside down when her father died during her junior year. “Until that point, I was a golden girl, a nationally ranked tennis player and Yale student. That’s where my world all unraveled and started to change.”

She continued, “The number one loss is death of a working parent because it causes the family structure to change and the children to be left behind.”

Forced into an unfamiliar adult role, she married her high school sweetheart during her junior year in college. “I was looking to grow up, help take care of my family, including my younger brother.”

Launching Pad to a Career

When it came time to graduate Yale, she was still not sure what it was she wanted to do. “All I’d ever done was play and teach tennis. So I began to ask around about what people thought were the best jobs. Everybody kept telling me that investment banking was where the best paying jobs were. So I just started interviewing at Morgan Stanley, Goldman Sachs, and other investment banks.” She was the only person from Yale hired into Morgan Stanley’s analyst program that year, an event she calls “ the launching pad to [her] career.”

Still, she said, ““My early years were difficult, dark and bumpy. I remember little.” She gave birth to her daughter during her second year at Morgan Stanley. “I may have been the first professional woman to have a child at the firm. It was not easy.” In addition, her marriage was disintegrating. “I was working, going to business school, and taking care of my daughter. Survival was the noblest of my causes.”

Going from the frying pan into the fire, Tilton left Morgan Stanley in 1983 to start her own restaurant while still attending Columbia Business School. She laughed, “Owning your own restaurant will send you right back to Wall Street.” But her time in the restaurant business allowed her to identify both her strengths and weaknesses. “I realized there that the more natural side of me is the creative side. The methodical financial side is the one I had to develop.”

Upon graduation from business school, she went to work for Goldman Sachs’ corporate finance group, focusing on IPOs, then on to Merrill Lynch to work at the merchant bank concentrating on leveraged buyouts for another couple of years. “I tried not to show that I was single mother. There wasn’t going to be any sympathy for my plight anyway,” said Tilton. “At the firm, there was no flexibility, no understanding for going home early so I missed every parent-teacher interview, every play, and every event. When I had to make a choice between being home and leaving a project in the middle, I wouldn’t leave the project. I just couldn’t afford not to be working; I just needed to work as if I wasn’t a single mother with a child at home.”

Then, an epiphany: “I realized at that point that I’d been in investment banking for nine years and wanted to do something different. In the late 80s and early 90s, the industry started to see LBOs going bad and beginning to be restructured. There was too much leverage and projections rarely rooted in reality. I started to think for the first time—not merely follow others —and I became fascinated with the investment side of business.” Her understanding of the thought process behind the deals, led to a four-year stint at Kidder Peabody doing distressed debt research, sales and proprietary trading

Building a Powerhouse

Then, once again, she went looking for a change; this time, to allow her to spend more time with her daughter. Tilton and her daughter moved to Florida in 1990 and in 1993, she planned to take a year off and travel to Southeast Asia with her daughter. “But we got as far as Hawaii before I got a great offer to work from home for Amroc Investments, the first firm that traded private paper and bank loans.”

Five years later, a group of her accounts asked her to go out on her own to start her own broker dealer and bank loan research firm. When she did, it was on her terms: “Rather than copy other firms, I decided to build a firm around banks with distressed loans in their portfolios, not around the buyers. We traded one billion in paper in our first year.” That formed the basis for the powerhouse that Patriarch is today.

“My business is about proving that making money and making the world a better place are not mutually exclusive concepts Every year, each fund has demonstrated a minimum of 25% returns on an internal rate of return basis with certain funds returning in excess of 60% in some years… But in reality I want to be remembered for how many lives I have touched . For every company saved, those people’s lives are changed.” By taking companies that others would throw away and rebuilding them, Tilton actually adds value to the world. “Because we have restructured and acquired 150 companies, 250,000 jobs have been saved that that would otherwise have been lost. This is what we at Patriarch do each day, not because it is easiest way to make money, but because I want to contribute to and change the world.”

Work/Life Balance: Finding Freedom

Of the industry in general, Tilton thinks it is a “difficult place” for women. “It certainly wasn’t a gentle place for women and women tended not to nurture each other. I found what was woefully missing was a sense of camaraderie among women.” She added that women are also faced with the challenge of dealing with the competing concerns of work and life. “Women always make that choice between career and children. I have many strengths, but balance is not among them. It’s hard not to feel as though you’re always giving up something in both areas. But there is no shame in making the choice to leave behind a Yale education to take care of children because you are raising the next generation.”

Still, she cautioned, “Making that choice will make it difficult to be successful and ignoring that fact or pretending it doesn’t exist is wrong. I was sad every day I left my daughter but that was the choice I made for financial reasons. When I came back to Wall Street to create Patriarch, I was already free of any financial burden. I could have retired. I had a high school-aged daughter, which gave me the freedom at that moment to be me. I built the business around that freedom, working over 20 hours a day.”

Tilton stresses that women can, and will, be successful, especially if they pay attention to the natural talents that women do have. “Part of the reason that women are sometimes not successful is that women act like men in a man’s world. In fact, as women, we are creators. When we ignore those instincts, our chances of success diminish.”

But that doesn’t mean it will be easy. Said Tilton, “The path is winding, and destiny is destiny. It is important to understand that for all people who have achieved success, it is how they reacted to their failures or dark periods in their lives that have shaped who they are. In good times we ride the wave but in bad times we have to take a good look at ourselves and make changes… I always say, the truth is cold and hard but it is also the starting point of hope and salvation. No one travels a straight path to the top.”

Making Money and Making the World a Better Place

Of the current economic crisis and what she thinks should be done about it, Tilton said, “I’ve taken a very active voice and have been using my tactical understanding to try to convince others about what needs to be done.. What I have proven over the years is that if you do provide capital with strategic and operational support it will sustain and create employment. One year ago, I took full page ads in the New York Times and Washington Post. It was a clarion call to rebuild America. I look at the US economy simply: Our biggest problem is unemployment –because the small and mid-sized companies are liquidating. So, if we want to get somewhere quickly, we need to get those companies working capital loans immediately to stem the tide of liquidations.”

Tilton has now put her money where her mouth is as well. “I’ve taken an alternative path. I have put my own money aside and hope buy assets from the FDIC where I can begin to make a difference across many companies. I’m using $200 million of my own personal money to save companies. It has become my personal mission to end joblessness in America. We need to put people to work.”

Her ongoing mission is to “make a difference from a business leadership point of view, to set an example by validating t that we can make money and make the world a better place simultaneously.” She added, “My work and who I am is one and the same; it is a reflection of who I am personally. And I’ve given up everything to commit to this personal journey.”

“In the end,” she said, “it is people standing shoulder to shoulder walking in the same direction that creates a force of nature. We can’t change things until we all start thinking about the pain and plight of others.”

17 comments

  1. Just layed off

    “It has become my personal mission to end joblessness in America. We need to put people to work.”

    All I can say is really???

  2. Just layed off 2

    I also here you…. it seems to be a lot of talk / drama / words. I had a positive return on investment and I was sent home to tell my family ” Dad no longer has a job!” she seems to forget what she bases her mission on….

  3. Nicki Gilmour

    Dont be a hater. Everyone is allowed to tell their story. The women that we profile here on theglasshammer.com have risen to the top of their industry. We aim to inspire and inform you.

  4. female and ex-Banker

    Nicki,
    To “inspire” and to “inform” us is worthless! I don’t care if they have risen to the top of their industry!
    The GlassHammer should be profiling women who ACTIVELY help other women—to hire them, to promote them and to pay them a decent wage. It should be REQUIRED that any woman your publication features should return any phone calls/emails/letters (at the very least) of women who have been laid off and are looking for work or who are looking for a better opportunity.
    Some (a lot?) of the women you profile are shameless self-promoters and they do not help other women. What’s the point of that??

  5. Nicki Gilmour

    please feel free to suggest women who you want to see profiled
    self promoting is part of personal brand as is networking

  6. Karin Lindner

    Lynn, I believe that your mission is unbelievable admirable… I can understand because I want to make a difference in the world as well! Finally someone who walks the talk!

    Isn’t it true that women should take over the world? Men have created a mess for way too long…., being caught up in their egos.

    Congratulations Lynn for making a good standing for women in a men’s world!

    One of my goals is to meet you in the near future!!! :-)

  7. Mardi

    In Minnesota companies with no more than 500 people employ about 70% of the workforce. That’s huge. In an effort to keep these people in jobs, the unemployment insurance program has offered these companies partial unemployment – they can retain people for 30 hours a week and the workers can collect unemployment insurance for the balance of their work week or find another part time job. It’s a win-win strategy – like Lynn’s, to keep people in jobs.

    A couple of years ago I was interviewing unemployed people for a study and we happened to notice that many of the older workers didn’t have current skills. People who don’t have current skills will be laid off first. The second half of the solution is to help these people find quick cheap training to upgrade their skills. Public school Continuing Education programs are a great source for these kinds of classes, costing less than community colleges.

  8. Mktngmvn

    Nicki, Don’t stop posting these profiles.
    I think that these profiles have to be viewed from a loftier perspective: these successful women got where they are by adopting industry best practices. These profiles are important because we readers get to see what they did that worked. Male or female – best business practices are best business practices.

    We all need to step out of ourselves – especially in this turbulent environment. A fresh, unfiltered perspective can often uncover opportunities that we did not see before because we were distracted by a personal challenge or just plain bitter.
    Peter Drucker said, “When it rains manna from heaven, some put up umbrellas. Others grab a big spoon.

  9. OrdinaryWoman

    The profile is ok. I would like to see more profiles of women in middle management with degrees from non-ivy league universities – less the exception, more the rule. And I would like to hear more about the challenges faced by these women and how they overcame them.

  10. SIngle Working Mom

    I appreciate Lynne’s candor about the challenges of a single, working Mom. While on Wall Street I often had to opt for work over school events, until I started my own business. I find it frustrating that after they have made it, many women claim they always put their children first.

  11. Sarah

    Sorry, this woman is deluded. She hasn’t saved jobs. She merely bought companies that already had workers. And she hasn’t done a good job of saving them. Take Snelling, it’s she bought it and ran it into the ground. It’s difficult to believe that her funds have had such good returns. In fact, I don’t believe it. There are no checks and balances on what she does and there is only one person in authority at her firm. Who knows whether the numbers she’s putting out are real?

  12. Pamela

    I’m failing to see why people are posting comments degrading and demeaning this woman who has obviously worked her behind off and who sacrificed a personal life and watching her child grow to build a top notch organization from the bottom up. Lynn didn’t complain about this, but merely informed us of her climb up America’s corporate ladder.
    She is by no means perfect, and doesn’t claim to be, but everything written in this profile cannot be fabricated…there has to be some truth to her history, so step back, be logical, and emotionless if necessary to get you to stop being envious to the point of degrading a WOMAN who deserves recognition for her accomplishments!
    One person cannot save everyone, so those of you complaining that she should give you a job, you should ask yourself if you are qualified to work for Lynn.
    We live in a man’s world, so women, when there’s a woman who achieves something huge like starting up a high grade investment firm, we should applaud and encourage one another. There’s always going to be someone you don’t like and someone who doesn’t like you for no reason other than b/c of envy & jealousy…stop and ask yourself why you are SO negatively affected by other woman…are your reasons reasonable?
    My unsolicited advice to you is get over yourself, get off your behind, educate yourself, put in the hours, sweat & stress and accomplish something remarkable that will make this website and other publications want to do a piece on you!

  13. Will

    I truly admire Lynn and have had the opportunity to speak with her personally. She is as geniune in person as she is in this article. No nonsense, she works at least 10 – 15 hour days to maintain her position. She is willing to offer advise to those she encounters.
    I have deep admiration for all single moms who struggle and make something of themselves and yet still find in themselves to give to others and worry about the problems they are facing. Many get to the top and completely forget about everyone else.
    As many others have stated no one is perfect but it is important to look at the good qualities and achievements and use them as inspiration for our own personal growth.
    I wish her and everyone else nothing but the best but always try to help others.
    Will

  14. Marco

    What did Patriarch do to Snelling. It looks fine to me.

  15. Frustrated

    Has anyone looked at the companies which Patriarch Partners has “restructured”? How many jobs were actually “saved”? How many of them are making money? How many suppliers to these companies lost millions of dollars as the result of the restructures and ended up laying off employees? How are 180, Ark 1, American LaFrance, and MD Helicopters, to name a few, doing? Seems strange to me that all of these companies were “saved” by Patriarch and yet they remain unable to pay their creditors.

  16. Guest

    I am surprised and dismayed that you would use Lynn Tilton as a hero for women. She cares little about the working people and more about how wealthy she can get. I think there are plenty of successful women you should have looked at who are truly making a difference in the world before considering such a volatile and destructive woman who enjoys hearing herself talk more than listening to the needs of others.

  17. Guest

    She sent my job to Mexico. Thanks Lynn