Rainwater

"As investors, those early deals taught us that we were really like absentee landlords. We were owners of the businesses with management. Rainwater would often say, “Whether you own 1 percent or 99 percent of the company, you work for the CEO and the management team. They are doing all the work, and you’re just the money behind them. Your job is to be a great partner and find out what you can do to help them. Don’t treat them like employees. They are the ones throwing up in the shower if they can’t make payroll. For you, it’s just one of your portfolio companies, but for each of them, it’s their life.”"

"On November 16, 1988, the deal became official. In the final version, probably some legal associate took the brackets off, and—poof—our partnership had a name: Natural Gas Partners, or NGP, as it would be called. I came to appreciate later on that not a lot of thought went into naming things in the Rainwater world. Richard thought it was a waste of money to hire naming experts. The original investment partnership was called Bass Investment Limited Partnership. And the general partner of our partnership was named G. F. W. Energy, LP. Those letters stood for Greenwich Fort Worth—the names of the cities where the partnership’s offices would be located."

"The Rainwater touch made partnering with him and the Basses attractive to many investors. Today, we would call these efforts private equity funds, but back then, they were just called partnerships. He really cultivated relationships that led to investing, not the other way around. It was impressive to see. At the time, remember, there was no private equity industry. So forming partnerships with institutional investors was one of the few ways to transact in bigger deals. In 1984, Richard and the Basses created one such partnership that ended up having particular relevance to me. The institutional partner was Equitable Life."

"It was also my first observation of the way in which Rainwater worked. He had an idea. He talked to experts. He waved his arms and cold-called people about the idea. Some of us bit and asked forward-leaning questions and he was willing to let it flow. Once it had some momentum, he rounded up partners and figured out a way to put in less money and to leverage the capital of others. The basic terms of the deal required his group to contribute only $ 2.5 million of the starting $ 100 million total. Then, Richard apportioned out the $ 2.5 million general partner stake. True to form, the opportunity to invest got walked around the office, and everyone spoke for an amount. Richard was left with only $ 800,000 to invest."

"I remember Rainwater, who rarely traveled, asking me one time why I was on the road so much. He reminded me that if we really trusted our management teams, we shouldn’t need to go check in on them—an amazingly simple yet important observation."

"He later quipped, “I knew when guys were ready to leave and strike out on their own, because deals would only make it halfway around the floor or they wouldn’t even get out of the guy’s office before the entire equity check was spoken for.” People soon developed their own capital base or group of coinvestors and could speak for deals without flashing Rainwater’s name."

"Being in Rainwater’s office was a blessing. I tried to mimic his style. Everyone who made the trek to Fort Worth would get something from him. He was present, determined to make each visitor feel like they were the center of the universe. From the first time I set foot in his office as a wet-behind-the-ears, first-year MBA student looking for a summer job, I was amazed at how respectfully he treated everyone. He was able to turn people down and have them say, “Thank you.” That was a real skill."