Daniel Hennessy, MBA ’81: Investing in Positive Change

Finding a passion for finance

After graduating from the Ross School of Business with his MBA in 1981, Hennessy got his start in banking at Continental Illinois National Bank. During a particularly challenging economic time, Hennessy says he was grateful for the opportunity to move to Chicago with his wife and launch his career in finance.

“For me, having this chance to learn and to be immersed in a training program at Continental Bank was enormously helpful because I'd never worked anywhere else. To put myself through undergrad at Boston College and my MBA at Michigan Ross, I worked in restaurants, painted houses, tended bar, and picked apples at an orchard, but I had never worked in an office environment,” Hennessy said.

While at Continental Bank, Hennessy was able to build on his business educational foundations outside of the classroom by learning to evaluate companies, cash flow, balance sheets, working capital, capital expenditures, gross margins, and other building blocks that inspired the passion for investing and creating value that would stick with him throughout his career. 

Hennessy went on to gain more experience at companies like Citicorp before eventually teaming up with two partners to form Code, Hennessy, and Simmons, or CHS Capital LLC. CHS Capital was a firm that managed independent leveraged buyout funds, or what are more commonly known as private equity funds.

From success to starting over

“In 1988, we started our firm, and we ultimately raised $82 million of equity. We went out and bought companies with over $500 million in revenue. It was a collection of companies, 14 or 15 of them, that we put together,” Hennessy explained. “Then we would try to improve profitability, to grow those businesses through various means. We were quite successful with that fund. And so, that led to a second fund that raised $155 million, then $300 million, and then over 1 billion dollars in 2005, one of the largest private equity funds in Chicago.”

CHS Capital became one of the 100 largest private equity firms in the United States in the early 2000s and was one of the most influential in Chicago for its entire 25-year run. Unfortunately, during and after the Great Recession, the firm and its portfolio encountered significant adversity, resulting in a decision in early 2013 to wind down the firm and divest the remaining portfolio. 

“The demise of CHS Capital allowed me the opportunity to reimagine and reinvent the next phase of my investing career,” Hennessy said. “So, in 2013, at age 55, I had to start over and formed Hennessy Capital Group, an alternative investment manager.”

Investing in sustainability

Hennessy wanted to reinvent his investing career and create an enduring platform that would thrive in all markets and under varied economic conditions. He chose to accomplish this through special purpose acquisition companies, or SPACs. A SPAC is a publicly traded company created for the sole purpose of merging with a private company. This allows the private company to go public through a merger rather than the traditional initial public offering route, which may not be an option for some companies.

The first company that Hennessy Capital merged with and brought public in 2014 was Blue Bird Corp. As an investor, director, and board member, he helped the company execute its vision of converting school bus fleets nationwide to low and zero-emission power trains. Blue Bird would go on to become a top-performing SPAC.

Throughout his career, Hennessy dedicated time and energy to supporting non-profit healthcare, conservation, and educational causes. He served on the boards of the National MS Society, the Yellowstone Park Foundation, the Ann and Robert H. Lurie Children's Hospital of Chicago, the Shedd Aquarium, and more. But his particular interest in investing in sustainable companies like Blue Bird during this new era of his career was inspired by his son, Jonathan Hennessy, MBA ’21, who is also a Michigan Ross grad.

“Jonathan decided he wanted to embark upon an investing career in climate technology. As the former co-managing director of the Wolverine Venture Fund at Ross, he took his experience there and went to San Francisco, started networking in the Bay Area, and secured an investing position at a climate tech-oriented investment fund. I'm really proud of him,” Hennessy said. “He helped me think through how to create an investment strategy and thesis to connect all the dots with my industrial sector background to climate tech, decarbonization, and energy transition. And so, I've developed a whole new appreciation, credentials, and success in climate tech investing. I'm really proud of that journey, and now that's where I am focusing most of my time, energy, and effort.”

Looking to the future

Ten years after setting out on his own to reimagine his career, Hennessy has found great success in investing in worthy causes. Hennessy Capital Group is now one of the most prolific SPAC sponsor teams in the sector, having sponsored 16 SPACs over the last decade.

His most recent success has been an upcoming merger with Namib Minerals, an established African gold producer and the largest SPAC merger to date in Africa. The company stood out to him for its potential for extracting critical metals like copper, cobalt, and lithium, which are essential to the global energy transition, and for its social investments in local communities in Zimbabwe.

“The impact of our partnership with Namib is enormous. I believe we can create thousands of jobs, reopen schools, provide comprehensive healthcare, recreation, and raise the standard of living in our mining communities,” Hennessy said. 

Hennessy credits his success to the support of his professional network and family, including his wife of 43 years, Elizabeth, six adult children, and four grandchildren, plus one on the way.

“There were some sleepless nights, for sure, but I had a lot of encouragement when I founded Hennessy Capital. David Brophy, legendary professor of finance at Michigan Ross, was especially supportive and totally grasped the transformative nature of SPACs for companies striving to access the capital markets,” Hennessy said. “Professor Noel Tichy also encouraged me to think long and hard about “human capital” and the importance of recruiting, retaining, and rewarding best-in-class performers in our organization.”

Hennessy has remained involved with Michigan Ross throughout his career. He’s served on the Alumni Board of Governors and continues to find ways to invest in and empower the next generation of business leaders in the MBA program. His donations to the school created the Daniel and Elizabeth Hennessy Endowed Scholarship Fund, and he also served as co-chair in 1991 as part of his class’ 10-year graduation reunion to create an additional endowed scholarship fund in honor of the MBA Class of 1981. 

To current MBAs and alums looking to follow a path like his in investing, he offered this advice:

“Perhaps the best advice, first spoken by Woody Allen: If 90% of success in life is showing up, the other 10% depends on what you are showing up for. “Showing up” was our north star and guiding principle when we first founded CHS Capital in 1988 and is even more relevant today. When you show up in person, good things happen.”