Bradley Hudson is a partner at Jacksonville, Florida-based Forum Capital Group, a family office founded in 2012 that invests on behalf of high net-worth individuals. He is also the executive team leader for Forum Capital Seafood.
SeafoodSource: What is your background and how did you end up at Forum?
Hudson: I spent the early part of my career with different financial institutions working in investment banking and capital markets on a variety of transactions, including mergers and acquisitions, capital raises, lending, and general advisory assignments. Immediately before joining Forum, I worked at a private fund that invested in agriculture and agri-businesses on behalf of large institutional investors. Personally, I have a keen interest in the broader food supply chain and the opportunity to invest with partners and companies that feed the world. And without question, the seafood sector has the most potential.
SeafoodSource: What is Forum Capital Seafood and how did it come about?
Hudson: We tend to be industry agnostic, but typically focus on three key areas: seafood, real estate, and energy. All three require a great deal of patience and a balance of macro and micro knowledge (or the willingness to pursue this knowledge, however fleeting!). We started looking at seafood opportunities several years ago and have been very selective with our investments.
SeafoodSource: What kinds of projects is FCS working on with seafood companies? Is the focus on acquisitions, expansions, new business opportunities?
Hudson: One thing that makes Forum unique is we have the ability to consider investments in a wide range of opportunities. Unlike many private equity funds that are limited in their ability to be flexible relative to sector and investment structure, we can be highly creative: senior debt, subordinate debt, preferred equity, or a combination. We’ve provided all three over the past several years for a variety of purposes, including for growth, acquisitions, and general working capital. In 2018, we will be very selective with new investments. We put a good deal of capital to work in 2016 and 2017, so this year will be about helping our management teams focus on execution. That being said, we will consider any opportunity that is compelling.
SeafoodSource: What are the unique financing challenges faced by the seafood industry?
Hudson: There are many, but they all present unique opportunities as well. The primary challenges I see include cyclicality, fragmentation, and acceptance. First, when things are good, things are great. But when things are bad, things are terrible. You have to be a very patient investor to participate in this industry and this scares away a lot of capital providers. Second, there are few (if any) industries of this size that have supply chains that are so disjointed, regardless of the species. Companies that understand this and are good at adapting and integrating are the most successful. Third, historically our industry has done a terrible job of guiding and educating consumers about our products. There are so many good stories to tell, but we seem to have missed so many opportunities to do so.
SeafoodSource: What is the outlook like for this sector in 2018?
Hudson: Our office is very positive on the industry and the opportunities we are invested in. And I think investors and operators share this view, in general. In 2018, I believe you will continue to see consolidation in all areas of the industry. In sectors where companies can control the resource, vertical integration will be a focus for smart capital. In sectors where this is not possible (either because of regulation or high cost), companies will look to expand brand recognition, species offerings (commodity) and product offerings (value-added) to become more relevant to customers. Foreign capital will continue to enter North America, creating transition opportunities for small- to medium-size operators. Customers will continue to demand more from suppliers, so a focus on driving cost out of the supply chains will be key.
SeafoodSource: The administration of U.S. President Donald Trump has been in place for a year now. What impact, if any, has this had on your business and the opportunities for your clients?
Hudson: This is a good question and one that I think it is still too early to answer. But we certainly welcome a balanced approach to regulation that helps us remain competitive globally while also protecting the valuable resources we harvest, market, and sell.
SeafoodSource: What have you learned about the seafood industry from working with various seafood companies?
Hudson: I’ve never experienced such a hard-working and dedicated group of people. This is especially true of the companies we have investments in, but I know it holds true across the industry. The roots run deep in seafood, going back multiple generations. To really be successful, an outside investor has to understand and embrace this.
