Deposed from the Helm at InterFirst, Elvis Mason Turns to Merchant Banking; Ex-Chairman Joins National Trend with New Firm and Prominent Backers
DALLAS--Elvis L. Mason is back in banking--in merchant banking, that is.
The deposed chairman of the InterFirst Corp. and houston businessman Randy Best have formed a Texas-based merchant banking firm backed by prominent business and political leaders.
The company, the Mason Best Co., is believed to be the first firm of its type in the Southwest. But its founding is part of a larger national trend by commercial and investment bankers to enter merchant banking activities.
"We have a good opportunity in this marketplace," Mr. Mason says. "In america, merchant banking is assuming an increasingly important role."
Mr. Mason resigned as chairman of InterFirst in January as the Dallas-based bank holding company grappled with its energy lending crisis. InterFirst, which has reported profits for the last four quarters, posted a $ 172 million loss in 1983 as several top executives of the holding company and its lead bank resigned.
For the last eight months, Mr. Mason has remained out of the business spotlight in Dallas, quietly assembling the privately owned financial institution with Mr. Best, a 41-year-old private investor from Houston. Mason Best has offices in Dallas and Houston.
The firm is backed by a powerful group of limited partners, including Robert S. Strauss, former national chairman of the Democratic Party; Trammel Crow, the giant Dallas real estate developer; Robert D. Rogers, president of Texas Industries Inc., and Arthur Temple, chairman of Temple-Inland Inc. All of them also serve on an advisory committee.
Mr. Mason also sought partners from outside the Southwest to give the firm "geographic diversity." They included Thomas C. Barry, president of Rockefeller and Co. of New York; Thomas S. Murphy, chairman of Capital Cities Communications of New York; John B. Rogers, president of the Westchase Corp. of Palm Beach, Fla.; Lester Crown, president of Henry Crown and Co. of Chicago, and Laurence A. Tisch, chairman of the Loews Corp. of New York.
Mason Best official decline to specify the amount of capital the partners have contributed.
Ted M. Ingersoll, a director of Mason Best, says the firm will take part in a variety of financial transactions and will structure financial deals for its customers, such as investing capital and launching business ventures.
Its role also calls for Mason Best to recruit management and provide financial and marketing advice. In all the deals, Mr. Ingersoll says, Mason Best will have a controlling interest, if not a majority interest.
"What you are looking for is extraordinary returns," Mr. Ingersoll says. "A good venture capital firm would look for 20% to 30% compounded return. A merchant bank would look for more than that. You really become a partner with the company you found."
Mr. Ingersoll and other executives say the merchant bank will probably maintain its equity position for two to five years. At that time, it may sell its position or merge the venture with another company.
Mr. Mason, 55, and Mr. Best have been friends for 22 years; Mr. Mason has known Mr. Best since Mr. Best was 19 and growing up in Beaumont, Tex.
"He's as close to being a born businessman as I've ever met," Mr. Mason says of Mr. Best.
While a student at Lamar University, Mr. Best founded a successful class ring manufacturing company that was sold in 1970 to the Beatrice Foods Co. Mr. Mason also attended Lamar.
It was in March that Mr. Mason and Mr. Best started sharing ideas. By early April, the two believed they had established enough common ground to seriously pursue the venture.
"Over the Easter weekend we went to Santa Fe and talked day and night," Mr. Mason says. "On Easter Sunday we shook hands and decided what we were going to do.
"The interesting thing is, if you compared what we decided that weekened with what we have here, you probably wouldn't find a 5% difference. …