Russ:  This is the PKF Texas Entrepreneur’s Playbook.  I’m Russ Capper, this week’s guest host, and I’m here at the Gulf Coast Regional Family Forum with David Robinson and Dan Bassichis with Admiral Capital Group.  Welcome to the Playbook Dan, David; good to have you guys here.

David:  Thank you; absolutely, good to be here.

Dan:  Thank you.

Russ:  Tell us about Admiral Capital Group.

David:  Well Admiral Capital Group is a financial firm where we focus on private equity, real estate private equity and other opportunities but real estate is kind of our core strength.  But we’re a value add; we go out and we find office, multi-family, hotel opportunities around the country.  We have a tremendous partner in USAA that allows us to have a large footprint and we use that platform much like – I was a former basketball player and I used that platform to do community work and we use this platform to do positive things in the communities where we invest.

Russ:  Such as?

Dan:  Well when we bought a property actually here in Houston, we bought a Hilton Garden Inn, we formed a partnership with University of Houston’s Hilton College, Hilton Worldwide and the Houston Independent School District and formed Admiral Hospitality Scholars, named after my friend the Admiral, and we bring in 25 lower income a year to learn about hospitality jobs and we mentor them.  We have a hospitality camp at the University of Houston; they stay in dorms, they went to an Astros game, brought their families, tour bowling alleys, country clubs, cruise ships.  We teach them about jobs, help them get into college and then Hilton and Admiral together will pay for the college.

Russ:  Wow, so it’s a serious investment firm but with this major philanthropy component to it.

David:  Right.  And the LPs, they’re in it because we’re going to give them competitive returns.  Our returns are going to – we put them against the best in our sector but we also have this other component where as the founders and partners we look for great opportunities to make our communities better.  That’s what I’ve been doing with basketball for a long time.  Education has been my focus; we started Carver Academy, now we’ve grown to 5500 students in San Antonio and we’re going to grow really to over 10 or 11,000 kids there and sending every single child to college.  So our passion is to do great work but also do great work in the community.

Russ:  That’s fantastic.  So we’ve mentioned basketball twice now already, I’m sure our audience is going wait; I mean you had quite a career with the San Antonio Spurs.

David:  I’ve been blessed, yes; phenomenal organization obviously, the San Antonio Spurs.  I came in in 89/90 when we weren’t very good but over the last 25 years we’ve really become one of the best franchises in pro sports and I’m really proud of that association and that affiliation, but I’m also proud of what that organization has done in the community of San Antonio.  And I’ve been a little bit a part of that and so trying to carry that on to now my new business in finance.

Russ:  Really cool, Dan did you play for the Spurs too?

Dan:  Yeah, I was a fan and that’s really what makes the team important.

David:  That’s one of the important components.

Dan:  We go back to the dream team in 1992.

Russ:  Oh you do?  That’s really cool.  Well this is such a cool investment program that you guys operate and this focus on education, which you just certainly enunciated very well there, but that’s a difficult category to do successfully.  I think there’s been lots of money that’s been poured into education over the years unsuccessfully.

David:  There’s no question.  When you look at our public school systems; we pour a lot of money into them but they haven’t been the most efficient systems and that’s part of the reason charter schools have come along.  And my charter school management organization, IDEA Public Schools, it has been a really top performer in the area.

Russ:  What do you attribute that to?

David:  Well I think great leadership number one but really to continue just throughout the whole franchise from the families to the students to the teachers to the organization leaders there’s just one uniform mentality and I just believe that kind of culture and that kind of focus just brings us tremendous results.  Over the last 12 years every single child has been accepted to college.  And we’re dealing in areas where there’s large financial needs, our family’s are in South Texas, in that case half of our families are non-English as a first language families and still getting tremendous results out of those areas.

Russ:  Very impressive, and Dan your background – you were with Goldman Sachs, right?

Dan:  I was with Goldman Sachs in the real estate group and then before that I was at Duke Business School with David’s best friend from the Naval Academy which is how we came together.

Russ:  Well I was going to get to that, how did – so that was it?  I mean did it – it took a while for this thing to kind of mature into what it is today didn’t it?

David:  It does and things like this generally grow organically.  I know people look at me and they’re like you’re in finance from basketball?  That doesn’t really – but there’s a lot of steps along the way and USAA, our partner, has really been a big part of my life.  When I graduated from the Naval Academy I was an insurance client and then when I moved to San Antonio the Founder of USAA became my mentor.

Russ:  Oh wow.

David:  And so he put me on the board there of USAA Federal Savings Banks so for many years I got a chance to learn about the banking, but also about the company.  And the company is about service and loyalty and respect and those are all things that I hold very high in value.  And so when I went out to start our fund they were a natural partner, they came along side of us.  The real estate company there at USAA is phenomenal, they’ve done a tremendous job and so they were a natural partner for us.

Russ:  Really cool, but I’m curious Dan, did you always have this philanthropy vision in your future too or was this kind of a change of your direction?

Dan:  So from 2002 to 2007 I was helping David with his school The Carver Academy.  He put me on the board and the more I saw the impact David was having on those kids and those families the more engaged and passionate I got.  So 2006/2007 I started thinking about leaving Goldman to do something on my own and a lot of my free time was spending with David helping build an endowment and strategic planning and funding more scholarships and also travelling to other schools with David to think about how do we scale this up and visiting schools in New York and D.C. and Dallas and other places.

So I got to a point where I wanted to continue to build a profitable business but I wanted to help David scale up that community impact.  And he was working with one incredible school with 120 kids, but how do we take this up?  And so we started talking about a private equity business that if we grow it into a successful business and take 10% of our profits we’ll be opening schools supporting kids around the country.

Russ:  Wow, impressive.  So when you talk about effective education, I can’t help but think of the challenges that I see, not business as usual challenges in education, but the digital world.  And I go into schools and we’ve interviewed people in schools, some of these progressive schools, and at the end of the day they always tell me Russ, it’s not like it was when you went to school when you had the World Book Encyclopedia and all this stuff.  And they have computers now and they can look up and learn anything on YouTube and Google.

David:  In some ways that’s phenomenal to have access.  I remember having to do papers to go to the library and get the encyclopedia out so as far as access to information that’s tremendous.  But sometimes you tend to lean too much on the technology and you think that that’s going to be the key in education and it’s not.  Sometimes you just have to take a step back and do things the old fashioned way.  And so there’s a balance there that you have to really find.

Russ:  Yeah, it does.  I mean, do you guys talk about that in your meetings with the schools and stuff?

David:  Oh absolutely, it’s a big deal.  I think the core values are never going away and so that’s really where you start, right?  You have to give a kid mission and focus and passion; those are the key things because then they can go on and learn anything and they can find their place.  Which I think is sometimes a little bit hard, in our system now kids get lost because it’s so hard to focus; our system is general and it’s hard to focus on what do you do well?  What do you do well?  What do you do well?  So I think IDEA Public Schools does well is gives those kids space to find where their talents are and accelerate them.

So I think that’s a key; you’ve got to get them the passion and the motivation.  I know for me when I go out and I talk to kids all over the country one of the challenges is and why should I stay in school?  I can sell drugs and make twice as much money as I would if I wasn’t, so why should I go to school?  So you have to show them number one why are you going to school; what’s the purpose here?  And then light the path for them, show then that you can get there.  You want to be a doctor?  I’ll show you how to get there.  You want to own a hotel or a restaurant?  I’ll show you how to get there and then I’ll open up the door with a scholarship to get you there.  So there’s a lot of pieces, questions that you have to answer for a kid who doesn’t see his way to being a lawyer or a doctor or a teacher or a restaurant owner.

Russ:  Okay, I sense a little bit of passion.

David:  Yeah, just a little bit.  I’ve been doing this for a while.  My mom and dad got me into education at an early age and it just became a passion; I wanted to learn more, learn more.  So I’ve been involved with public school systems, private schools, charter schools and so I’ve seen this thing some full circle.

Russ:  So I’m curious, you mentioned those different charter and private and public, do you have a preference?  Do you think one works better than the other?

David:  Well the public school system is obviously – you have the largest pool of kids so that’s the most important obviously.  And I think the charter schools are there to help the public schools figure things out.  How do we do this more efficiently?  How do we do this better?  So the charter schools were started as an experimental school system to help get those ideas across so I love the charter school system and that’s primarily where I’ve worked.

But all of those play a key role; private schools are important because a lot of families feel like faith is an important key and I want faith as a part of my child’s rearing because that’s going to give him the proper perspective.  When he goes out into the world and he makes money then he’ll handle that money in a more intelligent way.  So I think each group has their role and as long as there’s good collaboration and discussion it will make them all rise.

Russ:  So the Admiral Capital Group takes investors – and are they special investors?  I mean are they only people that have private equity funds to invest in this one or would you take individuals too?

Dan:  We have investors including USAA, Texas Teachers Retirement Systems which is a million and a half teachers.  We have university endowments, family offices, high net worth individuals; we also have a lot of professional athletes that have helped us.

Russ:  Well that’s where I was going, I wanted to see.

David:  What we call friends and family.

Dan:  Yeah, we have a lot of friends and family.

Russ:  Well that’s good because I think things have changed with professional athletes.  One thing they make a lot more money and hopefully they’re getting smarter about keeping it.  I mean for a while they had a bad reputation for a while right?

David:  A properly earned bad reputation.  If you look at the numbers of retied athletes and the rate at which they’re going bankrupt it really is alarming.  And so for me these are the guys that I know would be the first guys to go back into their communities and put money back into their communities.  So we’ve really taken it on as a responsibility to try to help some of these younger guys think through on the business side what do you want to do with your money.  But also on a personal side how are you going to impact the communities that have supported you and that have given you this opportunity.

So that’s one of our passions and we’re still at really an infant stage as far as that goes but we’ve dealt with a handful of athletes now and just love to see their eyes light up and see them start thinking about strategically how am I going to change the city I live in?  If I live in Dallas or I live in San Francisco, I know a lot of people; I have a great platform.  You look at the NBA or the NFL right now that is a phenomenal platform; anyone will open the door.  You can go talk to any leaders in that community you want to.  So with that type of power how am I going to be wise about convening people and gathering resources and focusing attention towards the proper things.

Russ:  Don’t you think you might even be more influential though if you went back and started playing again?

David:  Yeah, I’d love to.  Anyone that’s got a contract out there I can try to get back in shape.

Russ:  You look like you could play now.

David:  I was so blessed, I had a great career.

Russ:  And how many years now have you been gone?

David:  14 years I played and I’ve been out now since ’03 so about 14 years out – it goes fast doesn’t it?  So it’s great, I’ve seen this landscape change so much from the time I got in.  You weren’t talking about generational wealth when I came to the NBA but now you’re talking about generational wealth; your second or third contract could be a real game-changer not just for your family but for your community.  So it’s more important at this point more than ever for these guys to understand the position that they’re in and really be able to take advantage of what lies before them.

Russ:  There you go.  Well David I really appreciate that you shared your passion with us and Dan thank you being here.  Keep doing what you guys do all right?  And that wraps up my discussion with David Robinson and Daniel Bassichis.  And this has been another Thought Leader production brought to you by PKF Texas Entrepreneur’s Playbook.