Erskine's Web: more than 20 years after leaving his investment bank, Erskine Bowles still influences dozens of former colleagues in the finance industry.

• Author: Pace, Lee

Before there was autocorrect on word-processing software, before documents were spun around cyberspace at kinetic speeds, there was the red Sharpie pen. Erskine Bowles wielded them with authority and precision over documents his partners and associates produced at Bowles Hollowell Conner & Co., the Charlotte-based investment-banking firm launched in 1975.

A comma out of place? A scarlet F from Bowles' pen.

A mushy fact? Another F.

A name misspelled? For sure, an F.

"I can still feel that pit in my stomach my first year when I'd submitted a draft of some materials to the client, then went back at 3 a.m. and found a typo," says Ned Valentine, an associate at the firm from 1993-96. "You never forget that feeling. It sticks with you."

"Erskine would say, 'A-minus was a good grade in college. It's a failing grade here,'" adds Hiter Harris, who worked there from 1987-91. "I just about bit my tongue when I first heard that. That was the tone he set from the beginning."

Today, Harris runs Richmond, Va.-based Harris Williams & Co., an investment-banking firm he founded in 1991 with Chris Williams, another Bowles Hollowell employee. Valentine is managing director there. They are part of an extensive alumni network that retains a significant influence in the finance industry, specializing in mergers and acquisitions and private equity. Though Bowles left the firm in 1993 to tackle high-profile political and education positions, his influence remains critical to their success, according to interviews with a dozen former colleagues.

Five years after Bowles left the company, it was sold for $140 million to First Union Corp., which wanted to add merger and acquisition expertise to its corporate finance offerings. Twenty-eight stockholders--Bowles wasn't among them--shared the proceeds, including 25 who signed four-year employment agreements, according to a Securities and Exchange Commission filing. Over time, most left for other companies or to start their own ventures (page 64). First Union and Winston-Salem-based Wachovia Corp. merged in 2001, and by 2008, when San Francisco-based Wells Fargo & Co. bought Wachovia in a government-approved fire sale, most of the 125 investment bankers who comprised Bowles Hollowell a decade earlier were gone. At their new firms, they have sought to replicate the collegiality and attention to detail that marked Bowles Hollowell.

"We were the dominant player in the middle market," says Don Millen, who worked at the firm in 1998-2000, then founded Dragonfly Capital Partners LLC, a Charlotte-based investment-banking firm.

"People loved our deals. There was no b.s. or spin, just the facts, well-presented and well-organized. When the firm was sold, it was a crushing decision to anyone below the top level. First Union left us alone for a while, but soon you could feel the tentacles. It was never the same. Soon, guys started breaking off and scattering all over."

The adage that in corporate finance, the most important assets walk out the door every night proved true for Bowles Hollowell. "We were never poached by any of the local investment banks," says Mark Mealy, who left New York-based investment bank Morgan Stanley & Co. in 1989 to join the Charlotte firm. "When the company was sold, obviously, everything changed."

A GREENSBORO NATIVE and 1967 UNC Chapel Hill graduate, Bowles earned an MBA from Columbia University in the same 1969 class that included leveraged-buyout titan Henry Kravis; Lewis Frankfort, former CEO of accessories retailer Coach; and Max Chapman, another UNC graduate who was president of Kidder, Peabody & Co., a now-defunct Wall Street investment bank. Bowles joined Morgan Stanley and, in the early 1970s, frequently saw middle-market companies--loosely defined as companies valued at $10 million to $200 million--approach Goldman Sachs Group Inc. and other large Wall Street firms for advice. They wanted to sell but had little idea on how to find a buyer willing to pay top dollar. They needed an infusion of cash. They were considering merging with a peer but were unsure how to execute a transaction.

The deals were always sloughed off to "a junior-level, inexperienced person," Bowles says. "Generally those middle-market deals were not structured as well, marketed as well, financed as well." There was a market, he concluded, rather than chasing the largest companies that relied on the New York firms. The concept marinated for a few years as he moved back to North Carolina in 1972 to manage the gubernatorial campaign for his father, Hargrove "Skipper" Bowles Jr. A native of Monroe, the elder Bowles spent several years running his father-in-law's food wholesale company and later started a realty and insurance business in Greensboro. He used a model that Erskine emulated, researching businesses across North Carolina, spotting troubled ones and then devising ways to help them...