MASH grad hit it big in NYC, likes saving firms

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story by: Mike Clevela
The Nashua Telegraph, 9/22/10

MILFORD – Rob Finlay doesn’t have a private office. He could have one; he’s the boss and certainly he could afford it, along with all sorts of boss-like accoutrements.

Photo by Bob Hammerstrom Rob Finlay has no corner office. With co-worker Don Monfried looking on behind, Finlay works and plays alongside everybody else at his Milford offices, but is on the go much of the time.

But Finlay prefers to sit at a normal desk with a normal chair with the people who work for him.

“The whole mentality of the big boss sitting there in the corner office, stuff like that, that’s not us,” he said in an interview at R.J. Finlay & Co., on Armory Road in Milford. “I work at a desk and I sit right next to another guy and the whole office is open. I don’t believe in offices, I don’t believe in walls. I want to hear from everybody.”

A few years ago, Finlay returned to New Hampshire after a lengthy odyssey that began when he graduated from Milford Area Senior High School in 1988. His journey took him to Wall Street and hot deals; to North Carolina and a new and successful idea; then back to the state he and his wife and three children are happy to call home.

Since then, this former Amherst resident, barely 40, has managed to buy nine companies in the Northeast and keep somewhere between 400 and 500 people employed in a down economy through his work at R.J. Finlay, a real estate investment firm.

Big city, big deals

After Finlay graduated from MASH – a few years before Amherst and Mont Vernon left to form Souhegan High School and MASH became Milford High – he went to the College of Boca Raton in Florida.

“I sort of continued the streak of fun that I had in high school,” he said, chuckling, “and ended up with my first year probably not (being) the best outcome for a kid from New Hampshire.”

Finlay’s parents called him home to attend what was then New Hampshire College, now Southern New Hampshire University. He got a four-year degree in three years, working full time for his dad in real estate and for a construction company.

When he graduated, he left the state again.

“At that time, I was gung ho about getting out of New Hampshire,” Finlay said. “Most of my young life had been spent in New Hampshire and at that time, I didn’t see New Hampshire for all it was worth, so I wanted to get down to the big city.”

He went to Edison, N.J. – not the big city – to work for Atlantic National Bank, handling real estate and commercial deals, but after a year, with a severe downturn in the New Hampshire real estate market, his dad needed some help, so around 1995, back he came to work in property management.

It turned out to be a good move because that’s how he met his wife, Karin, who was working for his dad.

“My mom was the one who actually hired her,” Finlay recalled. “My mom’s favorite quote is, ‘Boy, if I had known I was interviewing for a daughter-in-law, I would have asked more questions.’”

They married in what Finlay calls “a match made in heaven,” and a few years later, with Karin pregnant, he felt it was time to leave New Hampshire again. This time, he made it to the big city – New York and Wall Street with Lehman Brothers.

“Ever since I was a young child, plus being a product of the ’80s and ’90s, it was the Wall Street mentality,” he said. “The big deals, just to be part of something that seemed so sophisticated, so special, that I didn’t have a part of in New Hampshire – it was something I just knew I wanted to do.”

His background kept him out of mergers and acquisitions and in real estate, an initial disappointment that, he said, turned out to be a good situation, and not too long after joining Lehman Brothers, he was recruited by Credit Suisse First Boston.

“For a kid from New Hampshire without a Harvard MBA, just a guy from a very small school, this was hitting the lottery,” said Finlay. “It was just unbelievable. I’m probably six, eight months out of New Hampshire, and I’m on the top floor. It was just amazing.”

Today, he calls it an education, “not only professionally, but socially,” and a confidence builder.

He was in New York at one of the hottest times for Wall Street.

“It was fantastic,” he recalled. “We would work all night long. We’d go and have big dinners after a big closing. Just celebrate. It was an unrealistic lifestyle, but it was unbelievable; an eye-opening experience.”

Ah, but it was a bit tough on Karin, home in New Jersey with their child.

“I was commuting,” Finlay said. “I’d come back home at 2 or 3 o’clock in the morning and shower and change and go back at 5, so it was an all-encompassing lifestyle.”

A new beginning

The firm had to make some cuts after a financial crisis and Finlay was one of those to go, which is how he ended up in Charlotte, N.C., working for Deutsche Bank.

“They were starting up a group in Charlotte so I figured it would be a good transition,” Finlay said. “At that time I had two kids and my wife (who grew up in Vermont) sort of missed the country. My brother was working in Charlotte, so I had a family relationship down there. So, I went.”

It was a different world from an apartment in New Jersey. In Charlotte, they lived in a neighborhood with a backyard and lots of families with kids. Karin, he said, liked it.

“Unfortunately for me, it wasn’t the big city,” Finlay said. “It wasn’t the big deals. It was very different than I could ever imagine and I missed it. All my guys were still back up in New York, all the deals were still being done, all the excitement, the trading … all that stuff. I knew pretty quick (Charlotte) wasn’t going to be a long-term situation.”

So, eventually he announced to Karin that he thought it was time to head back north, back to New York.

Finlay laughed at the memory of her response.

“She said, ‘Well, you can go back to New York, but I’m staying here. Either find a different job or plan to commute because I’m not leaving.’”

He did her one better: He started his own company and called it Commercial Defeasance, LLC, a name that might speak volumes to people in the financial sector but absolute zero to most of the nation.

“I left my job on a Friday and started my company on Monday,” he said. “I worked all weekend on my business plan.”

What the company did, in a nutshell, was provide the substitute collateral needed when bonds are about to be paid off, money that needs to be placed in escrow so that the bond obligations could be fulfilled.

“It was a little bizarre,” Finlay said, “one of those little things that nobody ever thinks of. At the time, nobody was doing it, and it really filled a need it the market.”

He was 30, and it was early in the year 2000.

“At that time, we had three kids, probably two dogs, a house, a mortgage, and I don’t know what possessed me,” he said. “And I know I’ve changed because right now, I couldn’t imagine doing what I did: I mortgaged everything I possibly could mortgage, I sold (the family) cars, I got rid of every 401(k), everything was gone, including health insurance. It was a really big deal; it all went into the company.”

At first, it was almost as tough as commuting to Wall Street because he was pretty much the whole deal, trying to market not only his company, but the concept of Commercial Defeasance.

“I had to travel almost every day,” he said, “but fortunately, we started to see success.”

The company completed its first transaction in June 2000. In 2001, it did between 30 and 40 deals, then 500 in 2002.

“By 2006, we were doing 1,500 transactions and over a billion and a half dollars,” Finlay said.

But all the work, all the worry, took its toll and he decided to sell.

“In six years, it was like I spent 30,” he said. “It was like I aged 30 years in the process. Every worry, everything was on me, as well as all the marketing, all the travel.”

He had good people, but it was still his baby, which made it hard to sell.

“It was a very difficult decision,” Finlay recalled. “When you grow something from your house and it’s an idea and it matures, you have a very close personal bond with it. It was a lot of emotional struggle and you have all your worth in one little basket.”

After the sale, Finlay found himself at 36 with a pile of money and no idea what he was going to do with the rest of his life. He had taken up racing, driving Daytona prototypes and started (and still has) a company called Finlay Motorsports, but he felt he was a little too old to make this a career.

So he and his wife decided to come home.

“We had the choice to live anywhere in the world that we wanted to,” he said, but both of them decided New Hampshire was the place to raise their families. “She’s actually from Vermont but she went to school in New Hampshire, so I let her consider New Hampshire her home.”

Home again

They weren’t quite sure where to go, but Finlay recalled his days in the mid-’90s, working in construction. He would commute from Manchester to Swanzey.

“By the time I got to Peterborough, I (would be) out of coffee, so I had to go to Peterborough. I always liked Peterborough and my wife liked the Monadnock area,” he said.

They saw an ad for a home and went to see it but, said Finlay, again chuckling (he does that a lot; during the entire interview he seemed to be having a wonderful time recalling all of this), the Realtor quickly had their number.

“The broker saw us coming a mile away, with a bunch of kids who weren’t really familiar with snow,” he said.

When they got to the house, there were hot chocolate, cookies and sleds out back.

“We came in and it’s snowing and it’s wonderful,” he said. “When you live in Charlotte, the coldest it gets is 65 degrees. So much for my negotiations when the kids are saying, ‘We want it, we want it,’ and my wife is saying, ‘We want it,’ so that was it.”

Soon Finlay started looking for something to do.

Initially, he did some small deals, made some investments, nothing major, he said.

“Then a few years ago, once we saw the market collapse, we saw companies that were solid companies, that employed good people, skilled craftsmen, businesses that had fallen on tough times because of the market and other forces. We made the decision to go back to what we really know – real estate and construction – and start to acquire these businesses that are leaders of industry, that employ good people, and get them back to work and continue a tradition of building a product that you can’t replicate – brick, slate. These are skilled craftsmen that are building this stuff.”

And that’s what he’s been doing for the past few years – buying relatively small firms in the Northeast that have fallen upon hard times.

“If I can put people back to work, it truly is something that means a lot to me,” Finlay said.

He owns Morin Brick of Auburn, Maine; Keiser Industries of Oxford, Maine; and Vermont Natural Colored Stone, among others.

Morin, the first that he bought, had let 50 people go.

“We bought it and brought them all back to work,” Finlay said. “The plant is running today and we’re making brick.”

But that wasn’t enough for a guy who said he feels its important to give something back to his state.

He started The Finlay Foundation, run by Karin, a nonprofit devoted to improving the quality of life for New Hampshire residents by assisting children and families in need and promoting cultural and educational initiatives. Among the latter was a gift to the Wilton Public and Gregg Free Library.

“The foundation loves to be a part of being able to help in areas where we can educate people,” said Karin Finlay, the foundation’s president. “We still believe that libraries are a very important part of growing up in a community.”

The Wilton library was asked to raise money that would be matched by the foundation. A fund drive raised more than $10,000 and the foundation matched $10,000 of that.

Finlay has also started a monthly magazine called The New Hampshire Troubadour that runs stories of “extraordinary people, places, history and culture” of the state. It is distributed to residents, libraries and schools statewide for free and has no advertisements.

It is all, Finlay said, because of his love for New Hampshire.

As successful as he has been, Finlay’s hopes for his four children are more philosophical than financial.

“I’m a strong believer in doing what makes you happy,” Finlay said. “If you’re not happy, it’s not worth it.”

And Finlay certainly seems happy. Dressed casually, he leans back in his chair, smiles a lot and chuckles often. But he’s no Pollyanna. He knows how different things are for him now.

“Do I miss doing big transactions? Sure. But I was just a piece of that transaction,” he said. “To be able to walk around and say (to employees of his nine companies), look, we made this, we’re part of this economy, that’s something that gives me satisfaction.”

“I will take this lifestyle right now, and it is far superior to any life that I had before,” Finlay said. “If you’re doing a $100 million transaction in New York, that’s just a couple people. But you can buy a slate company in Vermont and put people back to work, that’s satisfaction.”

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