With the US Open concluding on Sunday, the thoughts of many investors have turned to tennis. One of them is Orlando Bravo, founder and managing partner of private equity firm Thoma Bravo.
Generally acclaimed as one of the top-two private equity players in the software space (along with Vista Equity Partners), Thoma Bravo has more than $130 billion of assets under management.
In addition to his investing success, Orlando Bravo, 53, was an accomplished tennis player, ranking as high as No. 40 in the nation among 15- to 16-year-olds. At the age of 15, he roomed at the Nick Bollettieri Tennis Academy with Jim Courier, who went on to win four Grand Slam tournaments.
Bravo finished his tennis career playing on the team at Brown University. And he was able to apply the lessons he learned through tennis to his work. We recently caught up with Bravo to discuss the connections between playing tennis and investing. Here are his thoughts.
II: How would you compare playing high-level tennis with private equity investing?
Bravo: They’re extremely similar. When you play tennis, it’s not over until the last point. And when you have two equally matched players, it’s often going to be a long battle. It’s very hard to close, even if you’re way ahead.
Investing in a company is also a long, tough process. You can have an agreement, but with all the competition, it’s not over until the money is wired. It’s just as hard to get closure.
Problem-solving is another similarity. In tennis, you go after your opponent’s weakness, and they do the same. Trying to solve and dance around the problems is comparable to when you buy a company and try to solve business problems in a creative way. How do you bring about sales growth and customer retention?
One annoying commonality: Once you win a tennis match, you know that to keep going you’ll have to start over again. When you execute a great deal in private equity, you get to celebrate for about 30 seconds. You will be judged on the next one.
You get used to punishment in both endeavors. Tennis is really brutal on your brain. There are ups and downs during a point, a match, a tournament. In investing, there will also be problems to solve. Tennis trains you well for that.
II: In what ways did playing competitive tennis prepare you for your current job?
Bravo: In every way. First, there’s the work ethic: being on the court for six hours a day, with physical and mental strain, doing the same thing over and over. That mentality makes it easy to be in the office until 3 a.m. working on a deal, which is par for the course.
Staying humble also is important. In tennis, you can be the No. 1 seed in a tournament, but you still have to beat the guy in the first round. It’s the same in investing. If you think you’re great because of past success, you better be careful.
II: Does having to use your body in addition to your mind make tennis harder than investing?
Bravo: Yes, tennis is a lot harder, though maybe some of that for me is that investing has come easier. I recently watched some matches at a [minor league tennis] event where my son was participating. I was in awe of what the players were doing mentally and physically.
Another thing: Investors have the wind at their back from the U.S. economy, technology, and innovation. You’re winning at the start. If you just held the S&P 500 over the past 30 years, you’re 7 percent ahead [per year, excluding dividends]. In tennis, there is no advantage like that.
II: Is your tennis playing style — some call it grinding — like your investing style?
Yes, my colleague Holden Spaht, who played tennis at Dartmouth College, points out that for most tennis competitors, the style they play is similar to what they’re like off the court. In my case, I was consistent and really played the right shots. I didn’t have a big weapon.
My investment style is like that. We’re not flashy, looking for a 100 times return or investing in the next Tesla. We’re consistent in looking for a company that fits our strategy. That’s proven leaders in enterprise software, where we can turn companies from growth innovation into a growth business — from break-even to best in class.
II: How do you think top tennis players might fare at investing — say Roger Federer, Rafael Nadal, and Novak Djokovic?
Bravo: They would be awesome, and probably already are. It would be fun watching Nadal running around an investment committee meeting yelling “Vamos!” [That’s Nadal’s catchphrase on the court (Spanish for “Let’s go!”).]
All three guys are very thoughtful, well-trained, disciplined people. They have a lot more than athletic ability. Their creativity would translate well to investing.
II: Did you learn any lessons from being Jim Courier’s roommate that apply to your work?
Bravo: Yes. Jim was the hardest worker and extremely competitive. He was incredibly smart, did well at school. He was intellectually curious and always learning.
And he was always a very good person, treating everybody well, whether it was someone losing in the first round or winning tournaments. Good people attract other good people to work with them. What I learned from Jim was absolutely foundational for my work.
