Morningstar thinks small to ensure success

Matthew Galvin believes that small can be beautiful.

Over the years, Galvin has had a hand in buying, selling, operating and advising scores of golf properties, among them some of America’s best-known venues. But today, his Morningstar Golf & Hospitality has only two courses in its portfolio, and it has a full management contract at just one of them.

“Our goal is to have no more than four or five projects at a time,” said Galvin, who has more than a quarter-century’s worth of experience in the golf business. “With that number, we can be hands-on with each project.”

Morningstar doubled the size of its portfolio in late 2017, when it agreed to manage, revitalize and rebrand the struggling Wildwood Golf & Country Club. The firm will oversee renovations to Wildwood’s 100-year-old golf course, modernize its clubhouse and create new membership options to attract young families in South Jersey. When the overhaul is complete, expected this spring, Wildwood will become the Shore Club.

Morningstar’s revenues don’t come exclusively from management contracts, however. In 2017, it provided advisory services to the Concession Golf Club, in Bradenton, Fla., and to the city of Palm Coast, Fla., and it did financial analyses for a lender and a private-equity investor. Previously, it’s facilitated transactions by securing entitlements and conducting due diligence, performed agronomic and food-and-beverage assessments, outlined promotional strategies, provided financial benchmarking, and engaged in a variety of similar activities. At one time or another, it’s even worked with equestrian centers, hunt clubs and tennis facilities.

“We aren’t a management company per se,” noted Galvin, who estimates that half of Morningstar’s income nowadays comes from consulting contracts.

And in his role as a consultant, Galvin has had some plum assignments. In the wake of the savings-and-loan crisis of the late 1980s, he co-managed $1.5 billion worth of federally controlled golf and resort properties, among them a group of venues that had been owned by Landmark Land Co. More recently, the editors of the Forbes 400 hired him to determine the value of golf properties owned by the Trump Organization. In addition, he’s served as the president of the National Golf Course Owners Association.

In the early 1990s, Galvin worked as a financial analyst for American Golf Corp., which was at the time the largest owner/operator of golf properties in the United States. Later, he joined American Golf’s real estate investment trust, National Golf Properties, as an acquisitions analyst.

Galvin co-founded his own company, RDC Golf Group, in 1996. He left RDC after 17 years, but he maintains an ownership interest in two company-owned properties in New Jersey, Forsgate Country Club in Monroe Township and Shackamaxon Country Club in Scotch Plains.

Even with his small-is-better approach, Galvin is actively seeking management opportunities.

In early 2018, if all goes as planned, Morningstar will acquire Fox Hollow Golf Club, a semiprivate venue in Branchburg, N.J., in partnership with an investment group that includes Peter Hill and other senior executives of Billy Casper Golf.

When it comes to acquisitions, Fox Hollow exemplifies what Galvin is looking for: An underperforming venue, either public or private, with the potential to be a leader in its market once Morningstar completes an improvement plan 

“We look for courses and clubs that can benefit from a transformation,” he explained. “We’re looking to grow a course’s bottom line by solving problems.”

Today, Morningstar’s properties are in New Jersey and Pennsylvania, within a short drive of its office in Princeton, N.J. However, Galvin has formerly worked with several venues in Florida, and he continues to seek opportunities in the Sunshine State. He’s also looking to break into foreign markets, as he’s hoping to land a management contract on a property in England.

But Galvin is comfortable with Morningstar remaining a small firm. As far as he’s concerned, the no-man’s land in in golf management’s ecosystem is the space occupied by companies with 10 to 20 properties.

“You either have to be a boutique firm or be big,” he said. “There’s no future in being in the middle.”

With such a mindset at the top, don’t look for Morningstar to grow dramatically anytime soon.

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