No Holds Barred: The TFO Q&A

Temple Fork Outfitters is one of the largest makers of fly rods on the planet, but to conventional anglers, that doesn’t mean much. FTR sits down with TFO President and CEO Frank-Paul King (“f-p”) to see if retailers and their customers should be paying attention to TFO, and why major brands in the world of fishing may be headed down a dark path.

FTR: Let’s get right to it. You came to fishing from the world of private equity investment. That word is going to trigger a snooze button with some readers, but only the ignorant ones. Right now, the fishing industry is seeing unprecedented interest from private money, whose investors are gobbling up its star brands. In your view, is this good or bad for fishing?

f-p: Let’s focus on fishing brands. There’s always been private investment in fishing product manufacturers. What changed recently is the addition of institutionally-backed private equity funds (PE) taking an increased interest in the entire outdoor recreation (OR) segment of the economy. This has occurred because these funds believe they can make more money on an investment in OR companies than they can in other industries. You might call it the “Yeti” or “Patagonia” effect, but institutional investors only recently recognized the size of the OR industry and the possibility of outsized investment returns. (It’s not a coincidence that the US Bureau of Economic Analysis recently began measuring the impact of OR on the U.S. economy.) Every successful fishing brand is a balance of passion, business acumen and moxie. And it’s this balance that I worry about with the introduction of PE investment into the industry. Fishing at every level is driven by passion-fueled enthusiasts. It is very difficult to retain this type of energy when a company’s central-focus becomes time-dependent economic investment returns.

FTR: Tell us about your background and why it gives you a unique viewpoint on private investors in fishing.

f-p: Every day I marvel at the lifetime of commitment not uncommon for folks in our industry. In contrast, I spent three decades as a private equity investor focused primarily on the energy industry — specifically investing in companies that drilled and produced oil and gas wells. This experience spanned a period of significant institutional investment in energy that was driven by the perception of outsized investment returns. These investments have dramatically reduced the cost of domestic energy — which is positive; however, we must also acknowledge the negative environmental and social consequences brought about as well. In 2009, I chose to take a 180ͦ-degree turn and focus on my passion — fishing. Since then I’ve learned that a balanced perspective is always helpful. This is particularly true as our industry faces a number of challenges and opportunities — demographical, technological, environmental, political and social. In my opinion, success will follow those companies that continue to practice a balance of passion, business acumen and moxie.

“Our fishing rods are tools, not fashion accessories.” – Frank-Paul King, President, Temple Fork Outfitters

FTR: Give us an example of that type of transaction fishing fans should be on the lookout for in the future.

f-p: Be on the lookout for brand-extending acquisitions. Unfortunately, when living, breathing companies begin to look more like investment portfolios, passion-fueled enthusiasm is at risk. There’s lots of great business reasons to combine recognized brands under one roof; however, the benefits that come from accretion of brands also naturally leads to increasing uniformity — everything can become homogenized and lose the spark of individuality that made it a star in the first place.

FTR: So, you’re saying you’ve done the opposite of what we’re seeing right now—you actually gave up private equity to focus on fishing? Why?

f-p: My prior experience was very far removed from the true day-to-day management of a company. I didn’t know how far removed until late in my career when we were involved in some startup companies. At some point my heart disconnected from investing and I made the total commitment to TFO. I’ve been involved with our company since 2009 and as president since 2016. Without question, the change has made me deeply appreciative of the struggles our industry’s dealers and manufacturers have overcome to achieve the success they enjoy.

FTR: In your view, what’s the difference between a fishing company run by fishermen and a fishing company run by investors?

f-p: Companies are generally a mix of both. For me the difference is more about where the company’s focus is on a spectrum that runs from totally passion to totally business. Every company in our industry that’s been around a while is skilled across this spectrum; however, you can usually see that they are primarily motivated by one end or the other. Over the long-term, a company’s motivation will determine everything from how it treats customers, to the creativity of new products, to its involvement more broadly in the industry. The tough part is that a healthy industry needs companies with all types of motivations because that’s where positive change comes from. With 40 to 50 million anglers in the United States alone, there are a lot of different needs to be met, and it will require lots of different types of companies to meet them.

FTR: Let’s talk about TFO. It’s a storied brand in the fly market, but why should conventional anglers care about you at all? There are a lot of quality rod companies competing for their attention.

f-p: Without question there are lots of rod brands. In my opinion, there’s a short list of quality rod manufacturers competing for retailer and consumer attention. These manufacturers offer an incredible mix of products, services and relationship types from which dealers and anglers can choose. TFO will appeal to anglers that forsake technobabble and cosmetics, instead putting a premium on the optimal balance of performance and price. Our fishing rods are tools, not fashion accessories. We always strive to deliver the highest performance fishing rod at a given retail price because we believe that this will bring more anglers into the sport. When we get people connecting with fish, they connect with nature and they join TFO in keeping our rivers, streams, lakes, and oceans in good shape for the next generation. I make this statement a lot because TFO has successfully delivered on this “performance-price” promise as a means to greater resource conservation since being founded in 1995. This promise is a deeply held commitment that everyone at TFO takes very seriously.

FTR: Flip the script: all of your products take off like lightning and a private equity firm wants to acquire your company. What’s your reaction?

f-p: Like many OR companies these days, we get this call more often than you might think. Most recently last week and my response is always the same . I try to be helpful, but we’re not interested in outside capital at this time. That’s the right answer for TFO, but it may not be for someone else.

FTR: So, you’re saying private acquisition is or isn’t a dark path to tread?

f-p: Great companies will always reflect the passions of their owner. For this reason, PE firms rightly focus on the importance of “goal alignment.” The only dark path is when various owners have various passions or divergent goals. To be sure, companies evolve and changes in ownership can dramatically alter “who” a company is — for better or worse, depending on one’s perspective.

FTR: What path do you see yourself and TFO walking for the foreseeable future?

f-p: Every day I’m amazed by the breadth and depth of our industry, it’s opportunities and challenges. At the same time, we live in a world of increasing elusion. Without hesitation our path is to focus on TFO continuing to be uniquely itself — very humble and angler-centric.