Ken Hersh is strategic, opportunistic, persistent and, yes, lucky.
Friends, family and colleagues will tell you that you want him in your foxhole.
It’s a winning combination that has made the 57-year-old co-founder of NGP Energy Capital Management a “near billionaire.”
Hersh once secretly read a personal journal that his girlfriend inadvertently left open on her coffee table so he could get pointers on how to woo her. It worked. Ken and Julie have been married for 29 years and have a millennial son and daughter.
As an MBA student at Stanford University, Hersh wrote a cold-call letter to legendary Fort Worth investor Richard Rainwater asking for a summer job.
That would be the beginning of an enduring mentorship that led to the pioneering of the now-pervasive private equity ownership in the energy industry.
In 2016, Hersh read a brief story about esports buried in a trade weekly. He’s now the largest single shareholder of Dallas-based Team Envy, which owns gaming rights to the massively popular Overwatch and Call of Duty games for North Texas and Oklahoma.
But these days, the only reason Hersh wants to add to his fortune is so that he and Julie can give more of it away.
“The thrill and the value of working really, really hard in business just wasn’t as satisfying as my philanthropy,” he says in his family office at Old Parkland. So five years ago, Hersh began a staged departure from Dallas-based NGP to let the younger talent have their turn.
“The expression I use a lot is, ‘Every plant needs to be repotted,’ ” he says.
He completed that transition last year and is now focused on philanthropy as chairman of Hersh Family Investments and as president and CEO of the George W. Bush Presidential Center.
Don Evans, former U.S. secretary of commerce and now chairman of the board of the Bush Center, has known Hersh since they were both in the energy business in the 1980s. He recruited Hersh to the Bush Center helm in 2016.
“Ken has made the transition from success in the private sector to success at a public service organization,” Evans says. “Not everyone can do that, but Ken has done it in spades.”
Through their foundation, Ken and Julie have given away more than $30 million to North Texas mental health initiatives, leadership development, education and cultural institutions.
“When you drive around the city, you see names on freeways, names on buildings, names on cultural institutions, and those are all names that predated us,” Hersh says. “Julie and I have been blessed financially, so it’s our turn. I want to put my time towards something that is bigger than myself.”
With the world in coronavirus chaos, Hersh believes refocusing his life was prescient.
Philanthropic organizations are struggling. Their fundraising events have been canceled while the groups’ services are needed more than ever. And the nation longs for leadership — the kind that the Bush Center strives to promulgate.
“One risk in this crisis is that people come to rely on the government bailing everyone out,” Hersh says. “This country works because it is a public/private partnership. We are more a connected, committed and invested breed than exists in other places around the world. That’s the magic of this country.
“We’re going to make it through this crisis and come out with a better understanding of who we are. That’s the opportunity.”
Man without a plan
Hersh likes to think fast on his feet.
“I never have a game plan,” he says. “I enjoy the fog of the future not knowing what is going to transpire and being more in the moment.”
He grew up in Preston Hollow, raised by his mother and stepfather with two older sisters. His parents were both college economics professors. His mom, Mona Hersh Cochran, taught at Texas Woman’s University; his late stepfather, Ken Cochran, at the University of North Texas.
Their son was more into public policy and political science, which he studied at Princeton University after graduating from St. Mark’s School of Texas in 1981.
He flipped hamburgers at his neighborhood Jack in the Box, working his way up to become the store’s youngest shift manager.
Hersh’s first job after college in 1985 was as a junior investment banker at Morgan Stanley in New York. “They put me in the energy group because I was from Texas — even though I didn’t know the difference between natural gas and gasoline,” Hersh recalls. “This was trial by fire, a steep learning curve and 80-, 90-hour weeks. But it was exciting and all-encompassing. It was business boot camp.”
But Hersh also hated that the investment bankers got their money from completing the transaction, even if it was a lousy deal for the parties involved. He wanted to find investors who put their own money at risk.
So he left Morgan Stanley in the fall of 1987 to get his MBA at Stanford Business School as a path to find that.
Early the next year, he wrote a cold-call letter to Rainwater in Fort Worth, hoping to land a summer job.
“A few days later, I got a phone call. They said, ‘Hold the line for Mr. Rainwater, please.’ And I thought it was one of my friends messing with me, I really did.”
Until he heard Rainwater’s commanding voice.
Rainwater was impressed with Hersh's oil-and-gas merger work at Morgan Stanley. “He said, ‘Sounds like I need to meet you. Get on a plane and come when you can.’ ”
At Hersh’s meeting with Rainwater, the 25-year-old made an audacious pitch to the 43-year-old Wall Street wunderkind. Rainwater had paid for a consultant report on the chaotic state of the oil and gas industry. Hersh would analyze it and come up with an investment strategy to find opportunities amid the turmoil.
“Richard said, ‘Write me a proposal.’ I said OK. We shook hands, and that was the end of it.
"On the plane ride home, I wrote up the proposal.”
Hersh’s big internal debate was what to charge Rainwater. Hersh figured that $5,000 paid upfront wouldn’t be too much or too little for 90 days of work.
“A week later, a FedEx guy knocks on my door and hands me an envelope. Inside is a check for $5,000. There’s no note, nothing,” Hersh recalls. “So I thought, ‘I guess I’m hired, right?’ ”
Hersh paid a graduate student $1,000 to cull reams of data and documents, used a public library and shipped dozens boxes of findings to his parents’ house in Dallas, where he holed up for the summer.
Rainwater and a small “confederacy of deal guys” — including Hersh — put together a $100 million fund to do equity ownership deals in the energy patch. The bulk of that — $97.5 million — was invested by Equitable Insurance Co. The Fort Worth contingent kicked in $2.5 million. That included $75,000 that Hersh borrowed on a line of credit. “Hard to do for someone with student debt and a modest income,” Hersh says.
“We named it Natural Gas Partners because that was what the legal documents called it and we did not want to hire a naming consultant,” Hersh says.
NGP found established independents and gave them shopping money to buy properties in the 48 states and Canada abandoned by the majors.
“They knew how to acquire properties that other people thought were trash and could turn it into their treasure,” Hersh says. “People thought we were nuts. But this model is now virtually the only way that 30-plus private equity firms allocate capital to the oil and gas industry.”
NGP grew from being a small fund to a $20 billion institutional money management firm.
Smitten at first dance
After completing his summer stint with Rainwater, Hersh went back to Stanford to finish his MBA.
Ken met Julie at a Halloween party near the campus and was instantly smitten.
Julie, who was working at a small Silicon Valley start-up, doesn’t remember much about dancing with a guy dressed as a cowboy, but she was impressed with his next move.
Ken tracked her down where she was working and called her. She was out on the factory floor. Her voicemail said to punch zero in case of an emergency. So he did.
“Ken needed a date, so I guess that was an emergency,” Julie says. “I hear on the loudspeaker, ‘Julie, call on line 2.’ I was impressed with his chutzpah. I thought, ‘That’s pretty gutsy to ask somebody out on a cold call.’ ”
Then there was that secret reading of her diary. “He didn’t admit to that until after we were engaged," she says.
They got married at the Monterey Bay Aquarium in California, and she joined Ken here.
“He promised that we’d only be in Dallas for three years,” Julie says. “This August will be our 30-year anniversary. We joke that it was a three-year renewable contract and that I must not have read the fine print — which would be typical for both of us.”
The Hershes, who recently moved into empty-nester quarters in a Turtle Creek high-rise, walk in tandem in another extraordinary way.
Her rudder for life
Despite leading what most people would consider a charmed life, Julie attempted suicide three times in 2001 before electroconvulsive therapy and a holistic approach to wellness broke the deadly cycle of her disorder.
“I turned 41 the year of the attempts,” she says. “I remember being in the psych ward waiting for ECT and watching replays of the Twin Towers being hit.”
In 2010, she wrote about her jagged journey in her unvarnished book, Struck by Living: From Depression to Hope.
“For me, there’s no secrets for the Hersh family,” she says. “I don’t think anyone in our family has any regrets that I wrote it, but it impacts them, too.”
Last year, Julie developed a talk for Bishop Dunne Catholic School called Common SENSE, which stresses the importance of sleep, exercise, nutrition, stress management and external support.
“I had previously said the same information in a Top 10 format, but felt it was too hard for people to remember, so I developed an acronym based on all the things I’d read and experienced over the past 20 years.
"There isn’t a magic solution that works for everyone. I offer my list to inspire people to discover their own wellness routine, not to dictate it or offer a solution that’s wrapped in a bow.”
Ken has been her rudder throughout it all.
“Ken’s one of the most clear-thinking people I’ve ever met,” she says while on her daily walk. “He’s a leader who’s not afraid to solicit help and expertise from those around him. Those qualities saved my life.”
Ken serves as chairman and Julie as president of the Hersh Foundation, which recently joined two dozen North Texas philanthropic funding organizations in an unprecedented alliance to keep the region’s most critically needed nonprofits on life support during the coronavirus crisis.
“As much as we try to change the world, we’re a very, very small part of the big web,” Julie says. “You do it joyfully and hope for the best without driving yourself crazy thinking you’re the only person that can do it. That’s a hard lesson in humility.”
Brothers in business
Other than Julie, Ken says no one knows him better than David Albin, a fellow co-founder of NGP and his longtime business partner. Hersh describes this “arranged marriage” by Rainwater as the greatest gift of Hersh's professional life.
“David and I were partners for nearly 30 years and never had a stitch of paper between us,” Hersh says. “We never had a disagreement over how compensation should go, how profits or how equity should be split. Never. Our annual compensation conversation took 30 seconds, and we probably spent the first 20 seconds talking about the weather.”
Theirs was a partnership by telephone. For the first 10 years, Albin worked in Greenwich, Conn., then moved to Santa Fe, N.M., for the next 20, while Hersh worked in Dallas.
“Our personalities couldn’t be more opposite,” says Albin, who describes himself as a behind-the-scenes guy. “We fought like brothers and loved like brothers. And we suffered like brothers through the bad times and thoroughly enjoyed the good times. We appreciated what each of us brought to the table from the start.”
Albin, managing partner of Spectra Holdings LP in Santa Fe, laughs at the suggestion that Hersh is a bit starchy given the all-business persona he has cultivated at the Bush.
“Starchy would be the last word I’d use to describe Ken.”
Hersh was well-known for his wit in his past life, says Albin. He “played” to a packed audience each year in the ’90s and early 2000s as the keynote speaker at the prestigious Randall & Dewey energy conference in Houston.
One year, Hersh did a takeoff of Jack Nicholson’s Col. Nathan Jessup in A Few Good Men. Another year, he was Bill Murray’s unhinged groundskeeper, Carl Spackler, in Caddyshack.
“Everyone in the energy industry loved to hear his talk, because it would be both insightful and incredibly funny,” Albin says. “He’d bring the place down.
“I think of him first and foremost as a leader with an incredible sense of humor that kept us all fresh and on our toes. There wasn’t a day or meeting that he didn’t have me guffawing. He percolates to the top of everything he does.”
Sports nerd
Hersh looks for waves of investment opportunities. He sees a tsunami in esports.
That’s why he’s invested undisclosed millions to become the lead investor in Dallas-based Team Envy.
He admits that he doesn’t understand esports because he’s not a gamer.
“I also own shares of Facebook and Google and Amazon, and I couldn’t operate any one of those companies,” he says. “As an investor, I look for ingredients for success. A mega-trend is always helpful.”
He cites all sorts of compounding-growth statistics as evidence that he’s spot on.
But there’s another element. He’s an unabashed sports nerd.
Julie says that when he learns about any sport, he takes it “to a level of exhaustion.”
Given Hersh’s jam-packed daily agenda, it seems incongruous that his favorite escape is fly fishing.
“We have places in New Mexico and Colorado,” Hersh says. “That’s how I recharge my batteries. I could stand in a mountain stream up to my knees and cast every fly in my box all day long, catch nothing and come home and say I had a great day.”
Built to last
Hersh feels 20 years younger now that he can concentrate on the Bush Center.
After retiring from NGP, he was looking for a position that was national in scope, had a mission he believed in with people he liked.
“The Bush Center checked all three of those boxes. And it happens to be in my hometown,” he says. “There are about 85 people who work at the Bush Center. And I could take this entire team, start a company with them, and we would be wildly successful — except none of them would leave here.”
He’s intent on making the Bush Center a living organism that continues to thrive after the Bushes are gone.
“I’ve changed the vocabulary,” Hersh says. “When people support the center, they’re not giving a gift to the Bushes. They’re investing in the work inspired by the Bushes, and that’s important to them. This is classic built-to-last strategy.”
Its chairman can’t imagine the center being in better hands.
“We’re very action-oriented,” Evans says. “We want to make things happen. Ken not only buys into that vision, he drives it. We’re not a typical think tank.”
AT A GLANCE: Kenneth “Ken” Hersh
Title: Chairman Hersh Family Investments; president and CEO, George W. Bush Presidential Center
Age: 57
Grew up: Preston Hollow
Resides: Turtle Creek
Past career: Co-founder, chairman, NGP Energy Capital Management
Education: St. Mark’s School of Texas, 1981; degree in political science, Princeton University, 1985; MBA from Stanford University Graduate School of Business, 1989
Personal: Married to Julie for 29 years. They have two children, Daniel, 25, and Rachel, 23, who live and work in New York City.
Correction: An earlier version incorrectly named NGP Energy Capital Management as NGP Energy Capital Partners.
