Of the myriad ways the asset-based lending sector has evolved in the last 30 years, one of the most important has been in terms of the actual assets being lent against and the types of companies receiving financing. Managing director Cameron Cook oversees business valuations and intangible asset appraisals for Gordon Brothers in North America and has been at the forefront of this evolution, helping to expand how lenders and their partners evaluate opportunities in unique and emerging industries as well as industries that are based more on intangible assets.
From his perspective on the valuation side, Cook has also spent the bulk of his career shifting the perception of this part of the business by providing more than just sterile financial metrics.
“We are not just data crunchers,” Cook says. “We truly have to be engaged in the process and want to understand the business or the intangible asset that we are appraising.”
Natural Extension
Although Cook has been in the valuation game for most of his career, including the majority of the last two decades, his professional experience has opened his eyes to multiple perspectives, making him even more effective in his current role.
A native of Wisconsin, Cook earned his undergraduate degree and MBA from the University of Wisconsin in the late 1980s. He then got his actual start in the finance world as an intern in international equities analysis for Deutsche Bank in Frankfurt, Germany, where he says he whet his appetite for the valuation world.
After the five-month program in Germany, Cook returned to the United States to work as a field examiner for Bank One (which is now part of Chase). After three years with the bank, he took on a financial controller role with a manufacturer of industrial generator sets. During his valuation career, Cook has worked with many manufacturers, so having this firsthand knowledge has been vital.
“I’ve always enjoyed seeing how things are done and I have a mechanical engineering interest as well, so I love seeing the manufacturing side of things,” Cook says, noting that his work at Gordon Brothers often involves clients in the manufacturing sector.
Cook’s next step toward the valuation world came in 1995 when he became a senior internal auditor for Audit Force. Then, in 1998, he joined AccuVal Associates, which would later be acquired by Gordon Brothers. Since 1998, other than a three-year stint as manager of business valuation at Wipfli, a regional CPA firm in Milwaukee, Cook has been entirely focused on performing business valuations and intangible asset appraisals for Gordon Brothers, although he still keeps lessons from his past positions in mind.
“All the different experiences I’ve had with various firms have provided some form of benefit in my current role,” Cook says. “My current role is a natural extension of my past experiences.”
Unique Assets
Cook knows the perfunctory aspects of valuation backward and forward, whether it be putting together information requests or performing complex intangible asset analysis for lending support. However, Cook also knows that a spreadsheet can’t provide all the information a lender might need to approve financing.
“The big thing is to really understand the company and what makes it tick,” Cook says. “You need to know that company as thoroughly as we can, sometimes in a matter of a couple of weeks. We have to understand the story behind that financial information.”
During Cook’s career, getting to know companies has become more difficult, especially as the universe of businesses he sees continues to expand, and clientele coming from more sources such as private equity, hedge funds, technology transfer departments at universities and banks of all types. This has led to the valuation of companies doing such varied things as producing oil sands to manufacturing wearable technology.
“When you’re working with a startup or disruptive type of business model … we might be valuing that type of company before it even has a full production facility,” Cook says, specifically referencing some of the types of emerging technology he evaluates.
As new types of industries have become more commonplace, so too have more intangible assets such as brands and other intellectual property. While these assets are not entirely new to the asset-based lending world, they have only really been adopted in the last decade or so.
“The asset-based lending world is more accepting of some of the intangible asset classes and hard-to-value assets as well,” Cook says. “Back in the day, it was not common to consider an intangible asset as a potential source of collateral for a loan. Now it is.”
Cook has distinguished himself as a disruptor in the ABL industry by being one of the first leaders in the sector to incorporate these “hard-to-value” assets types into valuations.
“I like the fact that I’ve been exposed to and involved in the intangible asset appraisal profession,” Cook says. “Some business valuation practitioners and professionals don’t engage in brand valuation, or conduct patent portfolio and contract valuations. Those unique classes of assets can be key to unlocking additional liquidity for companies.”
Future Evaluation
Cook expects to see a continued expansion of lending on intangible assets in the future to other parts of the globe such as Latin America, Australia and Europe. He says establishing a global standard for intangible asset valuation will be critical to building this future.
Regardless of where someone is performing a valuation or what asset or business type they are examining, Cook preaches the importance of listening to and learning from clients and subject companies to comprehensively understand their businesses and their needs.
“Business and asset valuation has been central to Gordon Brothers’ work for nearly 120 years,” Cook says. “And it will continue to play a vital role in delivering the insight and support our clients need to confidently assess risk, whether it involves tangible and intangible assets. I’m excited for the future of the firm and the valuation industry.”