How I Made It

Turnaround specialist turns to hedge fund

The gig: Brendan Ross, 42, is founder and chief executive of Direct Lending Investments, a La Cañada-Flintridge hedge fund that invests exclusively in small-business loans made by online lenders.

Early ambition: Ross grew up in Bethesda, Md. He studied economics and sociology at Brown University and knew early on that he wanted to be either an investment banker or a corporate management consultant — careers he thought would most quickly lead to him becoming the chief executive of a company. "That's what I wanted to be when I grew up."

C-suite: Becoming a CEO is an odd ambition — one Ross has thought a lot about, but doesn't quite know how to explain. "I think there was an element of insecurity in my drive for power. I don't know why. When you're a CEO and you have hundreds or thousands of employees, you're like a character you've created — a character that is funnier and more deserving of respect than you are. There are a lot of people who are just very impressed by you."

To Toronto: After working as a consultant for a few years, Ross ended up in Los Angeles, working for Ticketmaster. In 2005, the company's CEO asked Ross to take over ReserveAmerica, then a Ticketmaster subsidiary, which was based in Toronto. After two years, he'd helped the unprofitable company find its way into the black. But he was eager to get back to California. "Toronto is just extremely cold. My wife and I had a rule that she was only permitted to complain about the weather every other day."

Turnaround specialist: After ReserveAmerica, Ross stepped in as CEO of two L.A.-area companies, both losing money and in need of a turnaround. One sold the advertisements printed on the back of grocery store receipts, the other was a ticket sales site similar to StubHub. The thing is, being a turnaround CEO often means cutting costs and firing people. Lots of them. Usually for no fault of their own. Ross saw it as tough, necessary work, but it wore on him. "Fixing bigger messes means firing more people. I didn't want to fire 500 people here and then, in my next gig, it's like I'm qualified to fire 1,000 people. It was ultimately what I didn't want to do anymore."

Small shop: In 2008, Ross started an investment management firm, one that eventually turned into Direct Lending Investments. The firm takes money from wealthy investors and uses it to buy small-business loans made by online lenders. It's a small company — Ross has 13 employees — with a relatively simple business. "I bring in money and I rent it to small businesses. Money is the product."

Short commute: Most L.A. investment firms have offices downtown or in Century City, but not Direct Lending Investments, which is based in sleepy La Cañada-Flintridge. It's close to where Ross and many of his employees live, which is why Ross plans to keep the firm there. "A core belief of mine is that my employees and I should have short commutes. When you have a long commute, you shortchange your family and you shortchange your work. Neither of those are compromises I'm wild about seeing my employees make."

Moto man: Ross knows about long commutes. Before founding his company, he ran a firm in Santa Monica — while commuting from La Cañada. To speed up the commute, he began riding motorcycles, which quickly became a hobby. "I think it's the most fun you can have on Earth," he said. Still, he gave up riding and sold his bikes last year. "In an instant, through the fault of a patch of gravel, you can find yourself drinking through a straw. The downside just felt too great."

Quiet ride: These days, Ross drives the anti-motorcycle — an ultra-quiet Tesla. "I got rid of the motorcyles and bought a Porsche, then I decided to get a Tesla and really embrace middle age. The Porsche was too loud."

Personal: Ross lives in La Cañada-Flintridge with his wife, Jill, a hypnotherapist, and their children, 7-year-old Samson and 10-year-old Sadie. Ross once was fond of skateboarding and riding a mountain unicycle — yes, really — until he developed back problems. Now, he's a serious table-tennis player. He has a dedicated table-tennis room at home and a coach from L.A.'s Gilbert Table Tennis Center who visits three days a week. In all, Ross estimates he plays for about six hours every week. "If you want to get better at something in your 40s, you have to commit five-plus hours a week to it. Knowledge just doesn't hammer into you anymore."

james.koren@latimes.com

Twitter: @jrkoren

Copyright © 2016, Los Angeles Times
A version of this article appeared in print on January 03, 2016, in the Business section of the Los Angeles Times with the headline "Turnaround specialist's new tack - HOW I MADE IT: BRENDAN ROSS" — Today's paperToday's paper | Subscribe
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