From music man to financial expert

McGowan Capital Group founder exemplifies the power of positivity

BY ROB SWENSON

Kurt Loudenback credits Gene McGowan for saving his company and helping turn it into a successful business. Loudenback is the president and CEO of Grand Prairie Foods, a food production and distribution company in Sioux Falls, S.D., that did more than $22 million in business in 2014.

“It’s not an understatement to say that we wouldn’t exist today if Gene McGowan hadn’t been there for us. We were literally on the verge of bankruptcy as a result of our startup struggles,” Loudenback says.

McGowan, a prominent investment executive in Sioux Falls, runs his own private equity firm — McGowan Capital Group — and led a group that invested early in Grand Prairie to help the company get its footing and grow. He is also a college dropout and an accomplished pianist who once made his living playing in bars.

“He started with virtually nothing and has worked his way up in a very positive manner,” says Dale Froehlich, a longtime friend and business associate. “It’s just remarkable. He’s one of the pillars of the Sioux Falls business community.”

McGowan is 78 but looks younger. He typically begins work days at 6:30 a.m. in a gym and keeps a busy schedule, even when he and his wife, Susan, take winter vacations at their condominium in Venice, Fla. Despite his age and success, he has no plans to stop working. “I’d rather think like a rookie than a has-been,” he says. “We’re just going to keep going, keep learning.”

A Lakefield, Minn., native, McGowan attended St. Thomas University in St. Paul for a year before joining the U.S. Navy. He played music and directed military bands during his 20 years of service, including 18 months of training at the Navy School of Music. He retired from the military in 1975 and moved to Sioux Falls, which was the largest city near his hometown area near Worthington, Minn.

During his early days in Sioux Falls, McGowan was a single father raising six children, aged 3 to 17. To support his family, he sold residential real estate sales during the day and played piano at night. His life changed dramatically for the better, he says, when he met Susan Henkin, who at the time was a prominent newswoman on local TV. A mutual friend introduced them and she says she found him to be a fascinating man with a twinkling smile who seemed happiest when he was playing music. She was not put off by the fact that he was struggling to raise a half-dozen children. He needed a little convincing to get married eight months after they met, she says. “I didn’t.” They married in 1978.

Susan took control of the household, encouraged him to pursue his dreams and helped him launch a financial career, McGowan says. Without her, he says, he’d probably be playing the piano in dive bars.

He’s played the piano since third grade. He still occasionally plays at public events and at private parties. But investing is his life, he says.

Educational Challenges

In his youth, McGowan suffered the symptoms of Attention Deficit Hyperactivity Disorder. Difficulty staying focused caused him problems in school. He was “invited to leave” two private schools before returning to his hometown to complete high school.

“I was very eager to go out and set the world on fire. I wasn’t sure why I had to go through this,” he says. “I didn’t fit in the harness very well.”

He gave college a try, but at the same time he worked in a brewery and played the piano at a bar. He was asked to leave a rooming house near campus for violating curfew.

He joined the Navy in December 1955 and got accepted in the Navy music program for the piano and the trumpet. The structured environment of military service proved to be a great fit. He got promoted 12 times and retired from military service as a lieutenant. He also got to play music and conduct bands around the world for the enjoyment of military personnel and foreign audiences.

He had an especially memorable day after being transferred back to Washington, D.C., to serve on the faculty of the School of Music. He and a friend were performing in train cars that were transporting dignitaries to and from Philadelphia for the annual Army-Navy football game. McGowan was playing an accordion and his friend was on the guitar.

President John F. Kennedy, a former Navy officer, was riding in one of the cars. McGowan and his friend were standing in the background when the president turned to them and said, “Let’s hear from the Navy.” The request for a song caught them off guard, but they responded with a Mexican cowboy song, and people started singing along.

McGowan hadn’t realized it, but the Mexican ambassador to the United States was among the dignitaries with the president. After the performance, as McGowan recalls, Kennedy turned to the ambassador and said: “Mr. Ambassador, when you return to your country, be sure to tell your people what we are singing up here.”

The president and his brother, Robert, who was the U.S. attorney general, signed McGowan’s train ticket — creating a keepsake that he still owns.

McGowan has a college degree now, too. He recently was awarded an honorary bachelor’s degree in entrepreneurship and music from South Dakota State University. SDSU President David Chicoine recommended the degree, and the heads of the economics and music departments at SDSU, the Faculty Senate and South Dakota Board of Regents supported the recommendation.

“People were very impressed with his credentials and accomplishments,” SDSU Provost Laurie Nichols says.

Business Successes

McGowan credits his wife for getting him started in financial services. An executive with Merrill Lynch contacted Susan to see if she would be interested in becoming an investment adviser. She had no interest, but Gene did. He pursued the opening, got the job and began studying harder than he ever had in his life to learn everything he could about economics, business and investing.

He started with Merrill Lynch in 1981. He switched to U.S. Bancorp Piper Jaffray in 1985 and worked as assistant branch manager and branch manager in Sioux Falls before being promoted to corporate headquarters in Minneapolis, where he served first as a training director and then as COO of the company’s retail business unit.

After four years he left Minneapolis and the business of public securities. He returned to Sioux Falls and started working in private investments, initially with Bluestem, before forming his own company a decade ago. To date, McGowan Capital has invested about $25 million in 12 businesses. It also owns about $45 million in troubled commercial mortgages.

McGowan Capital employs seven people, including McGowan, at its downtown Sioux Falls office. The office hosts monthly meetings of the CEO Roundtable, a gathering of 10 local executives who discuss business issues. McGowan has chaired the group for a decade, but he is quick to deflect credit and downplay his influence. In presentations to groups, he sometimes follows his observations with remarks such as “but I’m just a piano player.”

Dan Newell, president of the McGowan Capital Group, says McGowan will use any experience, good or bad, as a teaching opportunity. “That, to me, is a great characteristic of a leader,” he says. “It’s not uncommon for him to walk through the office, when he’s leaving, and thank everyone for what they do. That’s a great trait, also. He loves to give credit to the team and goes out of his way to do it.”

McGowan is especially close to Grand Prairie Foods because he chairs the company’s board of directors. Loudenback started Grand Prairie 11 years ago, after acquiring the assets of a struggling meat-distribution company. He essentially closed the business and started over with a new name and new products. The company struggled the first five years, but it has been profitable the past six.

Grand Prairie hooked up early with McGowan to get financial help. Loans were converted to stock, giving McGowan’s company partial ownership and a seat on the board.

Other than Loudenback, there was not much reason to initially invest in Grand Prairie, McGowan says. The company had problems, but Loudenback wasn’t one of them. “Kurt’s a star,” McGowan says of Loudenback.

The investment in Grand Prairie reflects McGowan’s philosophy of investing in people rather than ideas. “Ideas are a dime a dozen,” he says. “It takes the right person to make them work.”

Loudenback says McGowan has contributed significantly to Grand Prairie’s success and done so in a fond way. “He’s probably our biggest fan and our greatest challenger,” Loudenback says. “I call him Uncle Gene. He’s a great adviser.” PB

Rob Swenson Contributing writer RobSwensonMediaServices@gmail.com