All the Waves You Cannot See with David Grain





listen on YouTube


How do invisible waves in the sky, raw land for the digital age, hold the key to a $6-10 trillion opportunity? Today's guest unveils the secrets behind the explosive growth of data, the race in technology, and why private capital is the driving force shaping our digital future.

In this episode of the FEG Insight Bridge, Greg Dowling welcomes David Grain, CEO of Grain Management as he discusses the forces shaping our interconnected world. This discussion journeys through the dynamic landscape of the telecommunications space, exploring the evolution of cell towers to the invisible waves of spectrum and the essential role of fiber. 

Explore the intricacies of spectrum, raw land in the sky, and why it serves as the fundamental backbone of our ever-evolving communication ecosystem. David unravels a spectrum of opportunities, from cell tower investments to navigating the explosive growth of global mobile data consumption, providing a comprehensive view of the dynamic world of telecommunication investing.

Key Takeaways

  • While the U.S. market for cell towers has become less lucrative, due to increased interest, Grain identifies opportunities in spectrum licenses, especially beyond U.S borders.
  • Focused on tier two and tier three markets, Grain recognizes the outperformance of regional players in the realm of fiber networks and data centers, leveraging their agility against larger competitors that are often overshadowed in the market.
  • Driven by data explosion, AI, and an expected 8x rise in global mobile data consumption by 2030, Grain Management and similar firms are crucial in deploying $6-10 trillion for network improvements from 2020 to 2030.


Episode Chapters
0:00 Introduction
0:30 Episode Introduction
1:11 Background on David Grain and Grain Management
5:59 Evolution of Opportunity in Cell Towers
7:04 The Intricacies of Spectrum
12:35 Determining the Right Value
14:05 Carrying Costs on Invisible Waves
15:26 Buying Spectrum and Deciding Fair Market Value
16:43 Fiber, Data Centers, and Regional Dominance
21:55 Navigating the Data Explosion
27:54 Locating the Right Portfolio Bucket
30:37 Telecommunication Resources
31:54 Closing Remarks with David Grain




Greg Dowling, CFA, CAIA

Chief Investment Officer, Head of Research, FEG

Greg Dowling is Chief Investment Officer and Head of Research at FEG. Greg joined FEG in 2004 and focuses on managing the day-to-day activities of the Research department. Greg chairs the Firm’s Investment Committee, which approves all manager recommendations and provides oversight on strategic asset allocations and capital market assumptions. He also is a member of the firm’s Leadership Team and Risk Committee.

David Grain

Founder and Chief Executive Officer, Grain Management

CEO of Grain Management, David Grain, founded the private equity firm in 2007, headquartered in Washington D.C., specializing in the global Broadband industry. He led the transformation of Pinnacle Towers, later Global Signal, from bankruptcy to a successful IPO, reaching over 13,000 sites worldwide. In 2006, Global Signal was sold for $5.7 billion. Grain serves on the Board of Directors of Southern Company, New Fortress Energy, and Dell Technologies. He holds a presidential appointment, chairs the Critical Infrastructure Security and Resilience National R&D Plan, and is a member of various institutions. With an MBA from Dartmouth College, Grain is recognized for philanthropy in education, social justice, and the arts.


Greg Dowling (00:06):
Welcome to the FEG Insight Bridge. This is Greg Dowling, head of research and CIO at FEG. This show spans global markets and institutional investments through conversations with some of the world's leading investments, economic and philanthropic minds, to provide insight on how institutional investors can survive and even thrive in the world of markets and finance. Our next guest on the FEG Insight Bridge is David Grain. He is the CEO of Grain Management, which has been a pioneer in the telecommunication infrastructure space. The global demand for connectivity and the explosion in data consumption is driving the need for significant investment. That includes macro trends like the 5G rollout, the internet of things, artificial intelligence, and others. Some of these dollars will be included in the government's infrastructure spending plants, but a lot will need to come from the private sector, learn about the world of cell towers, spectrum fiber data centers, and how you can potentially participate. Can you hear me now? David, welcome to the FEG Insight Bridge.
David Grain (01:14):
Greg, it's wonderful to be here. Thank you so much for having me.
Greg Dowling (01:17):
Would you mind please introducing yourself and Grain Management real quick?
David Grain (01:21):
Happy to do it. Happy to do it. My name is David Grain. I am the founder and CEO of Grain Management. A firm that I started 17 years ago in February, started it with a very small team. We have grown to about 75 professionals, 34 on the investment team, four offices, including being headquartered in Washington, DC having a growing office in New York City, a small back office in Sarasota, Florida, and a newly opened office in London. It's been a fun ride.
Greg Dowling (01:54):
During this podcast, we're going to talk about all these different fun things like spectrum and fiber and data centers, but take us back to the beginning. How did you get involved in this industry?
David Grain (02:05):
It's a little bit of serendipity. I was at Wall Street for about 15 years. I was at Morgan Stanley for the longest stint in the nineties. In the mid 1990s, I was in the high-yield group focusing on tech, media and telecom, and I came across a transaction of a company that was in the cell tower space, and it was the greatest business model I had ever seen, right? You know, the numbers change over time, but it was about $200,000 to build a tower. The first tenant would pay you $2,000 a month or 24,000 a year. The expenses against that were about 10,000 fully loaded annually for ground rent, insurance, taxes, and what have you. So it's a seven cap on levered, right? 14,000 over 200. But you could fit four tenants on those towers with no incremental cost and you could borrow 80% of the construction cost, you know, at a single digit cost of capital.
David Grain (03:00):
So the operating leverage was just through the roof. It was like 40 plus percent cash on cash yield on levered. So I found that to be really fascinating and I started to double click on that space to really understand it. What my team does now is I wrote a little white paper on the tower space, just to make sure I was thorough and understanding exactly how this worked and what the opportunities could be, what the risks may be, etc. That's really where it started. And I continued on as an operating executive after leading Morgan Stanley. First at AT&T Broadband, right? Their cable business where I ran the Northeast United States, a hybrid fiber coax network that my team built while I was there, did a few acquisitions, grew the platform into the third largest cable cluster in the United States.
David Grain (03:48):
It was acquired by Comcast, after which I was asked by a private equity firm, Fortress Investment Group to lead the operational turnaround of a company they had pushed into prepackaged chapter 11 called Pinnacle Towers. Pinnacle was about a $200 million bond investment by Fortress right around the Enron time, the SEC started to review all public companies that used their auditor to do fairness opinions, and Pinnacle popped up on that screen. So in the middle of a financing, they were investigated by the SEC Fortress, was able to push them in a pre-packaged chapter 11 as they emerged. And of course they were clean. So the SEC, cleared them after which I was hired to run the company after it emerged from bankruptcy shortly after Comcast bought AT&T Broadband. So $200 million in, I rebuilt the management team, rebuilt the business processes end to end, refinanced it during the first ever asset backed securitization in the cell tower space that's exploded that sector at this point and took the company public and then grew it very accretively. So the stock ran Fortress decided to sell the company to an industry player. It resulted in a 15x return on their money, my management team and I did very well. But then when we saw Fortress decided to take themselves public at the end of the first week of trading, each of the partners, there were four of them at Fortress, were each worth $2 billion. So I realized that we did well, but like that's different and it's really at that time that I decided to start Grain Management in 2007.
Greg Dowling (05:20):
That's great. No, that's a great story. And, and you sold to Crown Castle?
David Grain (05:24):
Sold to Crown Castle for $5.7 billion after getting control for 200, and there were some equity deals and debt transactions, but ended up being a 15x and a really terrific outcome for everybody.
Greg Dowling (05:36):
I remember hearing the story about cell towers and the investment from others, not from you. And I love going for a drive. They can be distracting, listening to music, you're daydreaming. And then I heard the story and then I kept looking at all these cell towers on the highway and you're like, wait, they've got one tenant, they got four. And it's really changed the way I drive now. But that's besides the point. Hey, so you cut your teeth on these. Is this still an opportunity? Is this something that Grain still does?
David Grain (06:03):
Yeah, absolutely. Although as you can imagine with those sorts of really attractive characteristics, there's been a lot of interest in that space. So at the time that I was running Global Signal, which is what the company was renamed, when we went public, I was buying towers at an 8 or 8.5 cap, right? And now today, I mean for you to buy a cell tower in the U.S. it would be a sub 3% underrated return. So even in a fast growing space, it's very difficult to generate the kinds of returns that I'm seeking investing in those assets here in the United States. Having said that, we do see opportunities outside of the United States, and it has been purportedly reported that Grain is partnering with BlackRock to acquire a 25% stake in a global tower platform that functions in about 26 countries. I will neither confirm nor deny that, but the news has been out there.
Greg Dowling (07:01):
Love it, trying to expand that and take that internationally. One of the other things that you do, which is somewhat unique, is spectrum, which I think is fascinating, these invisible waves that are so important for our whole telecommunication system. Maybe we can talk a little bit about spectrum, maybe start out what is spectrum and then we can talk about how you invested it.
David Grain (07:19):
Let me take a step even further back to just say that to understand the value of towers, it was a very quantitative exercise. Reviewing demographic data, population counts, population growth, average income, income growth, and a variety of traffic counts on the major highways and roads around the assets. And what we found was that if we took a look at those variables and regressed them against the growth and value appreciation of these assets, you could determine what the correlations were between those variables and that growth and value creation. And we found certain variables that had very high R squares. So we used that to help inform decisions around towers. But then I found that these same analyses and these same variables with a few tweaks actually applied to other sub-sectors within the broadband ecosystem, including fiber networks and Spectrum licenses. So our first foray into spectrum was, in 2012 and since then we've probably invested $4 or $5 billion in that space.
David Grain (08:31):
What is spectrum? Spectrum is like raw land in the sky, right? You know, raw land. There are real estate developers that develop raw land into large buildings. The equivalent is the mobile operators build networks that are really leveraging this raw land in the sky. Radio frequency spectrum is basically those licenses in the United States are basically the right to project a wireless signal at a very specific frequency, at a specific power level over a very specific geographic area. And in the United States it's carved up into 416 partial economic areas that the Federal Communications Commission issues licenses for people to project a signal. These signals, depending on whether they're low frequency or high frequency, have different propagation characteristics. Low frequency spectrum travels very long distances, penetrates buildings, right? Isn't interfered with by weather, but the signals travel very slowly and are not very high capacity, right? So if you've got a very data intensive mobile application, low frequency spectrum, you know, may not carry as much data as you need, and it certainly there would be latency associated with it.
Greg Dowling (09:51):
So I can't stream my Netflix shows on this?
David Grain (09:53):
You're not going to stream your Netflix shows. There a high frequency spectrum, which is frequently called millimeter wave spectrum. It's broken up into, you know, if you think about raw line, its acres, well this is megahertz, right? And megahertz both helps you understand the address of the frequency as well as the quantity of it. So very high frequency spectrum, the different characteristic is moves super quickly, really high capacity, but it only travels short distances. So if you thought about an application like autonomous vehicles where you need instant information, right? Somebody's walking across a road and you've got a truck that's autonomously, rolling down the highway, those signals have got to be very quick and very high capacity, but they don't travel very long distances so that you need more points of presence in the form of towers or small cells in order to run applications on such a mobile network.
David Grain (10:48):
And then there's the stuff in between which has some of the characteristics of high frequency, some of the characteristics of low frequency. So depending on the mobile application that people are using in a geographic area is a medley of these different licenses that are required. And what creates an opportunity for someone like Grain, who is a strategic investor in this space, but also a financial investor in this space, is that these licenses are carved up in 416 partial economic areas in Germany or India. They have national licenses, which will be very difficult for a smaller player to go in and compete in this binary way with a really big corporation like an AT&T, Verizon, what have you. However, in the United States when Spectrum is offered, particularly through government auctions, it's offered simultaneously across all 416 and predictably, the very large operators are first going to focus on the largest markets.
David Grain (11:44):
They got to defend their existing networks in New York, Los Angeles, Chicago, you know, you name it. And by the time they settle in on the price and secure those markets, they've got a very small portion of their purse left to go after the large majority of those four 16 markets. So it creates a lot of volatility and opportunity for a firm like Grain in the primary market. And then the secondary market companies like Verizon, AT&T and others, they're basically a patchwork quilt of a bunch of smaller little wireless operators that maybe owned a little spectrum here, a little spectrum there, different frequencies. So it's kind of this patchwork quilt that is constantly going through this optimization process, which all occurs in the secondary market with this buying and selling of different frequencies and different geographies.
Greg Dowling (12:35):
So is it almost like you made the analogy of a real estate investor? Are you trying to kind of find the next up and coming place that you know that one of the main carriers is going to move into or is going to need eventually? Is that how you figured out what the right value is for this?
David Grain (12:50):
Well, it's a couple fold. Number one, there's a lot of information that's available that we can access, including because we have this holistic perspective investing throughout the ecosystem, getting information from our tower business about the spectrum needs, our fiber business, our data centers, our services companies. That gives us a lot of information about what's going on at the carriers. So we have very good information on what they own in terms of spectrum. We have very good intelligence in terms of where they're growing and where they're not growing, so we can anticipate where there is going to be shorts. So we do absolutely focus on that. And because we don't run a wireless network, we're agnostic about which geography but deeply religious about making sure it's a really attractive frequency that we believe will have great liquidity in the aftermarket and great demand in the aftermarket. And then very strong price discipline based on the hundred and almost 15 auctions that have occurred in the United States over the last 30 years. There's a lot of information both from those auctions and secondary market transactions on how the prices have changed. And that helps us determine what we think the right values are.
Greg Dowling (14:05):
And so if you bought raw land, there's carrying costs, right? Like you have to pay taxes on it, you have to maybe mow it occasionally. So it's not a public nuisance. What's the carrying costs for spectrum? This invisible wave?
David Grain (14:18):
It is like the world's perfect asset from that standpoint, Greg. It's this ethereal thing, right? It's really intellectual property and there really is no maintenance cost. There's a very small annual registration fee that you have to pay. There are requirements however that over a period of time it does need to be put in service. So you can't just buy it, put it in the vault, and then sort of revisit it 25 years from now. I mean, the whole point of auctioning this spectrum and regulating the spectrum space is to improve the quality of mobile broadband service for the United States to allow us to remain economically competitive and to improve life outcomes for the different people in the far corners of the country. So there's a lot of focus that we put on that, but the carrying cost is really negligible, particularly if you don't use leverage. There've been some people that have made some mistakes where they use leverage and we're depending on transacting around their spectrum and ran into some troubles. We don't do that. We only use leverage once we have the spectrum put to work so that it's a match funded debt structure.
Greg Dowling (15:26):
Let's talk about how these are sold. These are sold at auction. You talked about having this great knowledge base. That's certainly an edge, right? What are some other moats? Can I go on my E-Trade account and buy some spectrum? Like how does it work?
David Grain (15:38):
No, no, you can't. There are specific brokers that specialize in spectrum. There's a handful of them that are out there. And then of course being an industry player for many years, we know who owns what and where. And because people recognize that we are somewhat of a clearinghouse for buying and selling of spectrum, we do get inbound phone calls saying, Hey, you know, we've got this license that we don't think we're going use. It's in fill in the blank county. Do you have an interest in it? And with all of the data analytics that we use, we can determine what fair market value is and if we think it will end up having some value. I mean isolated licenses in really small geographic locations is a little dicey just as it would be buying a strip of land in a really small community without a master plan of how you're going extract value from that. So we don't do that. We have a very tight screen when it comes to determining which markets we like and which frequencies and and what prices we think are appropriate.
Greg Dowling (16:42):
We're going to put this all together here in the end and talk about just maybe some big macro trends that you're seeing and how this all fits together. But we start with cell towers. We went to the invisible intangible asset class. Let's pivot to the other side where it is tangible and physical and maybe talk about fiber and how that kind of feeds into data centers. Which again, this is one of those things where I'd be like, well, isn't this really the domain of the big carriers? And so how do you fit in? And fiber?
David Grain (17:07):
As you can imagine, there are a number of national brands that provide service all over the country. As many of their very high value customers are concentrated in major metropolitan areas, most of their attention is going to be focused on them. So as you can imagine, although they will have a footprint in some smaller markets, it's not their highest priority, which provides room for regional more local players to come in and provide a high degree of service and then win share from those large carriers that may not be supporting those markets quite as well. That's what we like. There are a lot of people that are now investing in the quote on quote digital infrastructure space. Most of them are very large players that are focused on major metropolitan areas where there's more competition to buy the assets, more sophisticated counterparties. The businesses themselves have more competition in the marketplace. So it's harder to generate the kinds of returns that we're interested in. We have decidedly focused on tier two, tier three markets where we can buy assets much more cost effectively. We can bring our operating experience and the heft of our process to those companies to help improve them, grow them, improve their revenue mix, improve the management teams and position them to be large enough to be interesting to the people that are newcomers in this space.
Greg Dowling (18:38):
David Grain (18:38):
Now there's a lot of public support for this as well. As we see from the Inflation Reduction Act, there is a large block of capital that's really dedicated towards broadband expansion that totals about $65 billion in several programs. And the goal is, they've created a map of a lot of geographic areas that are underserved and it basically said, Hey, if you're willing to build in that area, we're willing to actually pay for you to do it. And then you can own the network and the money that we gave you to build it. It's a grant, right? Which sounds great. All right? And the $65 billion it's allocated from the federal government to states and then states will have RFPs for the different players in those markets. The smaller, more regional players like the companies we buy are best positioned to take advantage of those grant programs and provide service in those areas.
David Grain (19:35):
The problem is that all of these locations on the map are not created equal. There may be a market where someone says, Hey, you know, you can have this network for free. Would you like it? Well then the carrying cost of maintaining that network relative to what the revenue is that you can generate from the customers in that market that may not pencil out. So there's a lot of texture to the opportunity set in this space, which again is why I think it's really important to be a true industry specialist to understand where those opportunities are.
Greg Dowling (20:08):
Through Covid, I think we've all realized where a lot of education went online that these are basic services, almost like water or electricity that we need to provide. And so yes, there are a lot of places that are definitely underserved in terms of connectivity, but do you need a wire line anymore? Can't you just do like a star link? Is that the way to do this versus laying fiber?
David Grain (20:29):
So I'm speaking to you right now from a fiber connection where I have about one gigabit speed. Now my children have launched, but during Covid they were home with their fiancés. And you know, my wife's working from home, I'm working from home, we're entertaining ourselves at home, they're going to school at home, etc. And boy, it was a traffic jam. We could not have done that using a wireless network. We needed greater capacity, more reliability, lower latency, and faster speed, which right now really can't compare to fiber someday. Maybe. I mean that's the goal, 5G, 6G, etc. But at this point it's fiber to the home. Fiber to the premises is the superior technology to execute most of the applications that we're talking about. I mean, I would say one thing though, Greg, I'm sure have been around long enough to remember the great financial crisis, which dispelled the premise that hey, people will always pay their mortgage. They're always going to pay their car note because they got to drive and go to work. They're always going pay their credit card bill, they need to be able to have access to the economy. All of those things ended up being not so true during the great financial crisis. But the one thing that people did pay was the broadband bill, whether it was mobile or wired. So the new gold standard, for better or worse and hopefully for much better and much longer, is broadband communication services.
Greg Dowling (21:51):
That's a great point and some good technical detail. I want to kind of put this all together, right? Like why invest in this? Tell us the backstory or the kind of the headlines, the explosion of data and communications and you mentioned 5G and then 6G and China's rolling out 5G. Like how does this all fit together and why is this important?
David Grain (22:09):
Data is much more available, much more digestible, much more transportable than it ever has been. And that spawns new applications that end up being more data intensive. I mean, the big buzz word is artificial intelligence, right? Generative ai, which consumes a tremendous amount of computing power and data analytics, etc. So the pipe, it says though you have a highway around the world and that all of a sudden you're increasing the demand for those pipes by a factor of 12. You got to build in front of that. So I look at the macro trends that include global mobile data consumption, which is expected to increase 8x between 2020 and 2030. And also the amount of capital that is expected to be deployed to improve the quality of networks globally, which will be somewhere in the $6-10 trillion range over the course of that same 2020 to 2030.
David Grain (23:10):
All of that can't come from the balance sheets of the carriers and cable companies and digital players, etc. Private capital, there is a home for private capital in that. But the opportunity set is so large that if you are a global solutions provider, which is what we consider ourselves, we can look for low hanging fruit, wait for other things to ripen before we go after them. And again, the real key is to have the visibility of everything that's going on out there and to have the algorithmic approach to evaluate the opportunities in front of me.
Greg Dowling (23:41):
Yeah, it's amazing how just some of the data has exploded. Like I've heard there's been more data created in the last 20 years than from that point to beginning of time. It's just amazing. And you mentioned autonomous vehicles, we're still working on quantum computing. There's all these things and you're kind of at the nexus of that.
David Grain (24:00):
I look at this space as the being the arms dealers, right? There'll be winners and losers that are combating in the marketplace for customers, but at the end of the day, this is really the sort of core of what's going to drive this whole process. And we want to invest in that core.
Greg Dowling (24:16):
And you have that perch, right, to talk about some of the commercial and technological macro changes. You also have another perch that I think is interesting. So you've helped that sat on a number of different committees trying to better inform the government on what they need to do. Now, I might get this wrong, but I believe you chaired the Critical Infrastructure Security and Resilience National Investment Plan R & D. Did I get that right?
David Grain (24:42):
That is correct. I was very fortunate to be a presidential appointee to the National Infrastructure Advisory Council several years ago, around 2010, 2011. And in my role within that organization, I did chair that study to make sure that we were well-informed about what the risks and the preparation that might be required to the extent that we see a national threat or breakdown in our infrastructure, particularly our technology infrastructure.
Greg Dowling (25:11):
When I think about infrastructure, I think about all the potholes on my roads, the bridge that needs to be replaced in our hometown here. What does it look like for data infrastructure? Do we have some of those same issues? And what is the public and private needs to protect this?
David Grain (25:29):
It looks a little different, right? There's been steady investment in this space, maybe not in all areas, not all geographic areas, but in the very advanced portions of the country, we're kind of like right on it. And the real question is how do we spread that to be ubiquitous across the entire country? And again, that's the same things we're talking about. It's the fiber, it's the cell towers, it's the spectrum licenses, it's the data centers and all of the services that's support the growth of those networks and those components over time. There are risks, obviously there's a lot of conversation about artificial intelligence and the regulatory and ethical questions and risks that we may have, similar to specific applications like autonomous vehicles. Do autonomous vehicles make a decision when something bad is about to happen and a decision needs to be made as to whether a vehicle stops, whether it sort of runs through something or what have you and the impact on our human existence. So the networks, the infrastructure, they're solid. They need to be expanded. And I think we don't even know yet all of the potential uses. So we got to get there fast because if we don't, it's going to slow down the economic progress of different portions of the American society.
Greg Dowling (26:49):
Kind of frightening, you hear about all these cyber-attacks that are going on. Some are state sponsored, some are not. But you know, even just the basic infrastructure, we've seen and like what would happen or if China cuts the network cables to Taiwan and we had these same issues right there. They're underground or undersea cables, right? That are very, very important. So part of that is not just what you can see, it's the stuff you can't see.
David Grain (27:12):
It's the stuff you can't see. But Greg, I have to tell you, there's, there's a lot of redundancy. You know, when you think about the wireless carriers, how they build their networks, you know, number one, they seek a certain level of nines of reliability and typically they have redundant routes so that if there is a break, which invariably there's, there's always something that goes wrong, but they can very quickly patch and reroute traffic. So we got a lot of escape routes. It's probably a little bit different than say our electric system or our water system or what have you, where they're probably less redundancy. I think we're in pretty good shape from that standpoint.
Greg Dowling (27:46):
All right, you made me feel good. All right. At least one thing is potentially safe. So that's good. Hey, we're talking earlier about why this is such an innovative and expansive area for investment and, and why it's important. But where does it go? Is this like specialized private equity? Is this a real asset or is there inflation protection? Where would an investor put this in their portfolio?
David Grain (28:07):
Since I started the firm, people have invested with me from their infrastructure buckets, their real estate buckets, their real assets buckets, and even their natural resources bucket around the spectrum investments and the private equity bucket of course. I try not to tell people where to put us. And frankly, this is one of the reasons why I started the firm, really focused on academic endowments because the people I was interacting with, it was less about, Hey, let me see where this fits and then I'll decide if I want to do the work. They just found the area interesting. They could see the macro trends that underpinned the investment thesis. So they wanted to really bottom that out. And then their view is, we'll figure out where to put it. We just like it. So I consider myself a telecom investor. It just so happens that the GP LP structure is the most appropriate capital structure for the investments that I make. But my primary focus is on being an expert at investing in telecommunications assets and companies.
Greg Dowling (29:08):
So just to paraphrase, you don't care where it goes as long as you put it somewhere?
David Grain (29:14):
Yeah, and that we generate the kinds of returns that you expect because look, both my parents were public servants. My dad was a U.S. Postal employee, started a trucking business on the side. My mother was a school teacher and they sent seven of us to college, most of us to grad school on a postman's pension and whatever else they saved along the way. And, that's really hard to do in the United States today. So having sat in addition to the National Infrastructure Advisory Council, I also sat on the board and was the chairman of the investment committee for Mass PRIM way back in the early 2000s, and then sat on the investment advisory council for the Florida State Board of Administration and chaired at Investment Advisory Council as well many years later. And there's nothing more important than the mission securing the retirements and futures of public employees, retirement, the academic missions of the institutions. We manage money for the foundations that we manage money for. The mission matter and I take it very personally.
Greg Dowling (30:16):
That's well said, and also well backed up by all of the different institutions that you've been involved with. I could probably spend the next 15 minutes talking about all the different things that you've done, it's quite impressive. And that's also very impressive about your parents. I have two in college and boy, it's a struggle. Can't imagine seven. If people want to get smarter on this whole space, where can they go? Are there books to read or you mentioned that you'd written white papers. How can people better understand this?
David Grain (30:45):
Whenever we are interested in a sub-sector within the communication space, we typically begin doing research for a couple of years, 18 months, 24 months, come up with a thesis, and then we hire one of the large consulting firms to help accelerate our process of determining the appropriate underwriting metrics, total addressable market, etc. So we write a white paper, we've summarized all those white papers in primers within our data room because we take such a holistic perspective on this space. That's probably a pretty good place to start, is our data room. It's hard to open up the newspaper today and not read something that is related to our space. We just try to sort of bring it all in one place through our data room. And of course, there's research reports. All of the analysts are covering this space now. And New Street is a terrific consulting firm that has research reports, but also the big consulting firms, McKinsey, BCG, and others. They're all writing about this space. The information's out there. There's a handful of books, some I agree with, some I don't.
Greg Dowling (31:51):
You kind of mentioned a few areas where you've volunteered in the past. Any you want to give a shoutout to, any other institutions that you're involved with? There's a lot. What's been the most rewarding in terms of giving back?
David Grain (32:02):
Oh boy. When Global Signal went public, it was obviously a very meaningful event for our family and our family line. We were living in Florida at the time. There was a local high school that had predominantly less advantaged young people in that high school and got a chance to get to meet the principal and understand what they were doing. So we started something called the Grain Scholars Program. Since we started that in 2004, we've helped 500 plus students get to college by covering the cost of their SAT and ACT prep courses, bringing instructors in to sort of help them demystify how to be successful on those exams, help them with small things, right? I didn't think it was a big deal, but the application fees were like $35 to $50 per school. I mean they couldn't afford the $35 or $50.
David Grain (32:55):
So we funded those as many of our scholars were admitted to schools, many of them were up north and some fine schools in Florida. And the first preference was, Hey, they want to apply to a school in Florida. It's like, well, you know, there's a big world out there. So, you know, if you can get into Dartmouth or Duke or Smith College or Brown or what have you, you may want to give that a good look. Many of them went north to those schools, but they didn't have a winter coat even, right? So we would help them. I had to help them understand, there's no such thing as bad weather, just bad clothing. Here's a certificate for LL Bean. Get yourself some good boots and a good coat. And also college tour trips. We funded years and years of young people going to go visit schools throughout the country.
David Grain (33:39):
And I would say that's the most satisfying. During the holidays, we usually have a little reunion over lunch at a local spot here in Florida and we'll have 40 or 50 of the scholars that will come back. We've got a couple of PhDs. Medicine was a big thing for the generation, so a lot of doctors, sadly no one that wanted to go to Wall Street or be in private equity or even in telecom, but they're doing great things to the world. And it's just wonderful to see these young people who were sophomores in high school in 2004, and now they're adults with families and have improved their lives. So that's probably the most satisfying among other things that we do.
Greg Dowling (34:17):
Oh, that's awesome. What a great story. So with your time, you make money and then you also volunteer it. There's probably a little bit left. Like what do you do for fun? Any fun hobbies?
David Grain (34:27):
Much is given, much is expected. And you know, I'm a deeply faithful person and I'm reasonably bright. I work exceptionally hard, but I know a lot of really smart, hardworking people that haven't been as blessed as I have. So it's an obligation. But look, my daughter just got married, I love spending time with she and her husband. He played basketball at Duke University and now coaches in the NBA. So supporting them. And my wife and I have been married for 30 years, so helping them understand what some of the keys were to that, getting to this point. I'm a golfer, so I play golf when I have some time. I just enjoy the outdoors, whether it's hunting or fishing or playing golf.
Greg Dowling (35:05):
Well, thank you so much for your time. We are so much smarter about this both physical and invisible world of telecommunication. So thank you very much, David.
David Grain (35:14):
Greg, it's been a pleasure. Really appreciate it. I'm thankful to you and all my friends at FEG. Look forward to continuing our wonderful relationship.
Greg Dowling (35:23):
If you are interested in more information on the topic, please go to our website where we will have a list of relevant FEG publications. And don't forget to subscribe to our event communications at so they don't miss the next episode. Please keep in mind that this information is intended to be general education that needs to be framed within the unique risk and return objectives of each client. Therefore, nobody should consider these FEG recommendations. This podcast was prepared by FEG. Neither the information nor any opinion expressed in this podcast constitutes an offer or an invitation to make an offer to buy or sell any securities. The views or opinions expressed by guest speakers are solely their own and do not necessarily represent the views or opinions of FEG.

This was prepared by FEG (also known as Fund Evaluation Group, LLC), a federally registered investment adviser under the Investment Advisers Act of 1940, as amended, providing non-discretionary and discretionary investment advice to its clients on an individual basis. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Fund Evaluation Group, LLC, Form ADV Part 2A & 2B can be obtained by written request directly to: Fund Evaluation Group, LLC, 201 East Fifth Street, Suite 1600, Cincinnati, OH 45202, Attention: Compliance Department. Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities. The information herein was obtained from various sources. FEG does not guarantee the accuracy or completeness of such information provided by third parties. The information is given as of the date indicated and believed to be reliable. FEG assumes no obligation to update this information, or to advise on further developments relating to it. Past performance is not an indicator or guarantee of future results. Diversification or Asset Allocation does not assure or guarantee better performance and cannot eliminate the risk of investment loss. The views or opinions expressed by guest speakers are solely their own and do not represent the views or opinions of Fund Evaluation Group, LLC.


Join other institutional investors receiving FEG’s updates, including market perspectives, white papers,
podcast episodes, and event invitations.


Subscribe Now