Thirty years ago, Nub Turner led the long-shot leveraged buyout that saved downtown’s last factory. Now his son Matt is backing bubble tea and tech start-ups.
Matt Turner says his business relationship with his father, Amherst “Nub” Turner, is based on “functional conflict.” Nub quickly dissents: “We don’t disagree on anything,” he insists.
Matt is president and CEO of the Amherst Fund, a private equity investment company his father started in 1998. Matt stepped into the business when Nub dialed back his involvement and started wintering in Florida in 2004.
“If we disagree on anything, it’s positives and negatives of analysis,” Matt explains. “If we were always to agree on everything, we’d make a lot of mistakes.”
The Turners arrived in the investment world in very different ways. Nub graduated from U-M in 1961 with a bachelor’s in English and dreams of becoming a poet. He wound up as sales manager of Chrysler’s Introl parts division.
In 1980, pummeled by Michigan’s infamous “double dip” recession, Chrysler announced plans to sell the Introl factory in downtown Ann Arbor. As King-Seeley, it was long the city’s largest private employer, but by then it was down to seventy or so workers making a single, dated product: a speed governor for diesel truck engines.
Nub Turner managed to borrow $7.5 million to buy the plant, which he renamed GT Products. Many such “leveraged buyouts” end up in bankrupcty, because heavy debt loads leave no margin for error. But with the help of Rudy Bergsma, a King-Seeley engineer Nub lured out of retirement, GT developed an improved gas tank vent valve that, by the mid-1990s, had found its way into most cars built in America. Long after every other downtown factory had closed, GT Products was humming, with a workforce of nearly 200 people.
Then, in 1998, the Cleveland-based Eaton Corporation purchased GT in what Nub calls “a very profitable sale.” The proceeds, the amount of which he won’t disclose, provided the genesis of the Amherst Fund.
Eaton kept GT’s products, but sold the factory building in 2004. Remodeled and expanded, it’s now one of downtown’s most desirable addresses, the Liberty Lofts condominium.
When Nub sold GT Products, his son was about as far from the Ann Arbor business world as possible. Matt Turner earned his bachelor’s in economics at U-M in 1995 and went into the automotive industry, where he made friends in the racing world. He raced in Daytona, China, and Britain before signing a three-year contract as a driver for Porsche. After only a year, Porsche opted out of the agreement on September 11, 2001. “That’s when I knew I didn’t need to be a racing car driver,” Matt says. “I wanted to go join the Marines, I wanted to join the FBI, I wanted to go kick some ass.”
Although he applied to work at several embassies in Europe (and turned down an offer to be Zimbabwe strongman Robert Mugabe’s driver), Matt ended up studying business. He earned an MBA from Webster University Vienna and a master’s in finance from the International University of Monaco before returning to take the reins of the Amherst Fund.
Nub says the difference between his approach and Matt’s reflects a changed business world. “Back then a lot of business was transacted on letters and contracts,” Nub says. “[An English degree] is a good background for anyone. It still can be. But now that the world is spinning in the rotation it’s going into, you’d need to get an MBA like Matt did on top of that.”
The generation gap between the Turners also manifests itself in the changing nature of the thirty-two entities the fund has invested in since its inception. In the fund’s early years, Nub invested in a number of manufacturing enterprises (including circuit board manufacturer Lectronics, now Saline Lectronics) and some educational projects (such as an experiential learning program called Experiencia). “The ideal investment for me personally, because of my past experience, would be to get involved in a company that makes a widget, like GT Products,” Nub says. “It wouldn’t have to be automotive, but I would have a better feel for something like that.”
These days the fund’s focus has shifted toward retail and tech start-ups. Under Matt’s tenure the fund invested in bubble tea chain Bubble Island, which the fund’s vice president of operations, David Lin, founded in 2002. Lin originally met Matt while raising money for Bubble Island, and interned with the fund before taking a staff position in 2008.
In 2011 Lin founded what has become the fund’s star investment: FlockTag, a digital customer loyalty card that dispenses promotions to repeat customers for any of numerous participating businesses. FlockTag drew national attention earlier this year when it raised $1 million–half of it from the Amherst Fund. “I don’t think I would have been able to come up with the idea of FlockTag if I had not been here and exposed to all the deals I’ve seen here,” Lin says. “There’s such a diverse scope of work that you get exposed to.”
Matt says the fund had to shift away from the kind of “tangible, manufacturing background” his father comes from. “The more entrepreneurial we become, the more capital is needed,” he says. “No one’s going to go and build a huge manufacturing plant [as a start-up]. It’s going to be in software and other things that need people.”
The Turners seem to be on the same page about economic theory but not about broadcasting their views on it. When Nub asserts that he and his son are “free- xADmarketplace capitalists” and “conservatives” who “believe in small government,” Matt quietly interjects: “You’re not really supposed to talk about these things.” Nub laughs heartily. “Matt gets nervous when I go into my free market capitalist exchange,” he says.
Despite their differences, there’s an undercurrent of mutual respect between the Turners. Matt says he hopes for the Amherst Fund to continue “through xADgenerations”–although it’ll be a while before his sixteen-month-old son Hale will be able to decide whether to go into the business.
For his part, Nub seems pleased with the changing of the guard. “Matt had the right background and the right experience, so he was a fairly easy choice,” he says. “I didn’t want to be involved. You can only buy so many bonds or equities before you get bored to death.”