In a landmark move highlighting the increasing focus on diversity and inclusion within the financial sector, UBS, a global financial services giant, has forged a strategic partnership with Madison Street Capital, a prominent Black-owned investment firm. This collaboration signals a significant step towards expanding wealth-building opportunities within minority communities, a long-underserved segment of the market.
Madison Street Capital, under the leadership of CEO Charles Botchway, emphasizes delivering “Wall Street quality services to Main Street businesses.” This partnership with UBS promises to amplify that mission, providing enhanced resources and reach. Botchway envisions substantial growth potential from this alliance, ultimately leading to greater capacity to serve underserved communities.
UBS, with its roots dating back to 1862 Switzerland, stands as a financial powerhouse, managing the wealth of a significant portion of the world’s billionaires and boasting nearly $4.2 trillion in invested assets. As a member of the “bulge bracket” of elite global investment banks, UBS traditionally caters to large corporations and financial institutions, typically engaging with companies valued at $200 million or more, according to UBS executive Leora Zach.
However, recognizing the broader economic landscape, UBS strategically partners with approximately 25 boutique investment firms to serve clients who do not meet this high threshold. This partner program allows UBS to extend its reach and offer a wider range of services. When UBS refers clients to these partners, the firm receives a 20 percent referral fee, creating a mutually beneficial ecosystem.
The partnership with Madison Street Capital, finalized late last year, marks a historic moment for UBS. Madison Street Capital, based in Chicago, specializes in mergers and acquisitions and capital raising for growing small- to middle-market businesses. This collaboration is particularly timely as it aligns with the increasing demand from entrepreneurs using UBS’s wealth management services who are seeking to sell or expand their businesses, as Botchway explains.
Leora Zach emphasized the significance of this partnership, noting it as UBS’s first collaboration with a Black-owned firm in its near 160-year history. This decision reflects a conscious effort by UBS to address diversity within its operations, spurred by the global calls for racial equality. UBS has been actively seeking to diversify its workforce and partnerships across gender, LGBTQ+ initiatives, and diverse ethnic backgrounds.
Madison Street Capital operates within the lower-to-middle market, focusing on businesses valued between $10 million and $500 million. This segment is often overlooked by larger investment firms, but Zach highlighted Madison Street Capital’s enthusiasm for this market segment as a key factor in the partnership. This focus significantly broadens UBS’s platform, allowing them to cater to a wider spectrum of businesses.
Beyond their aligned market focus and strong skill set, Madison Street Capital brings “an important angle of diversity” to UBS’s platform, as Zach stated. This diversity aspect is a crucial element for UBS as they continue to expand and diversify their partner network.
The partnership negotiations commenced in October, with UBS undertaking a rigorous two-month vetting process of Madison Street Capital. This due diligence included extensive meetings and interviews, culminating in the partnership agreement in late December. Zach underscored that the primary criterion for UBS’s partners is their ability to effectively serve their clients, emphasizing the importance of “the right caliber of skills to execute business.” Furthermore, UBS actively seeks partners who will also reciprocate by referring business back to UBS.
The foundation of this partnership rests on a shared commitment to client service. Botchway credited UBS executives Jonathan Hodge and Mark Wilkins in wealth management for initiating the connection between Madison Street Capital and UBS’s New York team. These conversations revolved around expanding wealth creation opportunities within African-American and other underserved communities, aligning perfectly with Madison Street Capital’s core mission.
Jonathan Hodge articulated the shared vision, stating, “I think as a community, we can do a better job. And this is an example of how we can.” He reflected on the historical tendency for minorities in corporate institutions to remain quiet, but emphasized the need to move beyond that and actively create opportunities. Hodge and Wilkins represent a new generation within UBS driving the push for greater diversity and inclusion.
The synergy between UBS and Madison Street Capital was also fostered by the existing relationship between Hodge and Walter Whitehead, a leading financial advisor at Madison Street. Their long-standing professional and personal relationship, including shared brainstorming on wealth building within the Black community, naturally led to the idea of integrating Madison Street into UBS’s platform.
Hodge expressed satisfaction in seeing incremental progress towards greater inclusivity, emphasizing that this partnership is not merely about “checking a box.” The true measure of success, he stated, lies in generating tangible business opportunities and creating mutual benefit.
Charles Botchway’s vision for Madison Street Capital, since its inception in 2010, was to establish a comprehensive mergers and acquisitions firm catering to small- to medium-sized businesses. He recognized a significant gap in the market, noting that these businesses are often “not big enough to attract the attention of Wall Street banks.”
Botchway highlighted the vast number of burgeoning entrepreneurs who have built momentum and achieved success in the $5-$15 million revenue range, but require additional capital to reach their full potential. Madison Street Capital aims to bridge this gap.
While many investment firms prioritize larger deals due to higher returns for similar effort, Madison Street Capital strategically focuses on the lower and middle markets, recognizing their critical role in the U.S. economy. Botchway emphasized that this sector is “what makes America work” and “employs more people than any other sector of the economy,” yet often receives the least attention from major financial institutions.
As a native of Ghana, Botchway is deeply committed to making a global impact, dividing his time between supporting communities in West Africa and leading Madison Street Capital’s initiatives in the U.S. Madison Street Capital has established an office in Ghana, providing high-paying jobs for young professionals and facilitating capital for local business expansion, fostering generational wealth creation.
Botchway underscored the “mushrooming effect” of supporting these businesses, leading to improved wages and higher quality employment within these communities. This partnership between UBS and Madison Street Capital represents a powerful step towards amplifying this positive impact, fostering inclusive growth and opportunity within the financial landscape and beyond.
