Despite Investing Billions, Andrew Murstein Understands the Value of Hard Work

When it comes to banking and finance, Andrew Murstein has a solid pedigree that includes founder, board member and president of Medallion Financial Corp, which is New York City-headquartered specialty finance company that originates and services loans for consumer and commercial industries.

The Long Islander, who lives in Sagaponack, was born in Roslyn. He owned a professional lacrosse team with former fellow Long Islander, NFL great and actor Jim Brown. The team played their games at Hofstra University. He also co-owned a NASCAR team, Richard Petty Motorsports with the “King” Richard Petty, who used to race on Long Island. He explored bringing racing back to the Island and building a NASCAR racetrack on Long Island.  He is also the newest board member of the Hamptons Film Festival. Recently he also dined with Leonard DiCaprio and Nassau County Executive Bruce Blakeman at the legendary Rao’s restaurant where they reportedly discussed bringing more film production to the Hamptons.

The company has several impressive subsidiaries. Among others, Medallion Bank, an FDIC-insured industrial bank, offers loans for the purchase of recreational vehicles, boats and trailers and home improvements. They also have Medallion Capital, a small-business investment company that provides creative, flexible debt solutions for middle-market companies principally for ownership transition.

Murstein is the third generation to run the financial institution, which was started in 1937 by his grandfather, Leon Murstein, an immigrant from Poland. Leon Murstein used $10 to buy his first taxi medallion. Through hard work and determination, by the 1970s, he owned nearly 500 of the then 11,787 medallions. His father Alvin decided to start selling medallions in the 1970s and knew the perfect customers – fellow drivers who wanted to be self-employed. While he knew and trusted their ability to make the payments, the banks at the time were not as trusting.

Undeterred, Alvin Murstein, who also lives on Long Island, decided to lend the money to those individual drivers, the kind of hand up he would have appreciated as he was building his business. He had a winning formula as these were largely immigrants who didn’t have a lot of money but were hard working, reliable and willing to work whatever hours it took to make their dreams a reality.

“Back then there was discrimination against these individuals, as typical banks refused to lend them money” the younger Murstein said of the lack of funding these drivers faced. “There was a federal loan program that was only available to women and minorities. My father and grandfather were able to help a lot of people fulfill their dreams at extremely low rates of under 6 percent.”

This included other niches, like Korean-American grocers, Asian-American dry-cleaning stores among others. In fact, the company’s motto was and has always been “In niches there are riches”

“These were hard-working people who were willing to put in the hours to be successful,” Murstein says. “People often mistakenly associate hard work with not making a lot of money, so some people don’t respect the effort people put into a small business. A lot of people think they’re going to get rich with crypto, Bitcoin or an app. That’s one in a million who go on to hit it really big. Most people gain success the old-fashioned way, by working hard and investing in their business.”

While today the loans are considerably bigger, Andrew Murstein has taken the lessons of his grandfather to heart. He has bet on small-business owners and it has paid off to the tune of hundreds of millions of dollars. Minneapolis-headquartered Medallion Capital alone has made $150 million in profits. Their public company. Medallion Financial (NASDAQ: MFIN) during the last several years has earned more than $300 million before taxes. As the third generation to run the business, he understands that helping individuals turn dreams into reality is both rewarding and a good business model.

“In retrospect, diversification and never settling for what we had saved our company,” says Murstein. “From the 1930s to 2015, taxi medallion prices increased about fifteen percent a year, but nobody foresaw Uber. That diversity and desire to diversify and succeed is what made us so successful today.”

“We invest in people,” says Murstein, of Medallion Capital, which he bought in 1998 for $30 million. They approve about five investments a year. Currently they have investments or partial ownership of about 30 businesses. “I  have a policy that I meet someone at least five times before making a decision about whether to invest. We want to see that fire in their eyes. Are they passionate about what they’re doing? As one of our past board members Governor Mario Cuomo said to me when I asked him how is he such a good speaker, ‘He know the subject he is talking about really well and believes in it.’ Other past board members have included former United States Senator and Connecticut Governor Lowell Weicker, and Presidential Medal of Honor recipient Hank Aaron.

Murstein is no stranger to hard work and determination. While still in high school in Roslyn, he would take three trains to get to Wall Street to work as a financial analyst. While he didn’t work directly for his dad or grandfather, he could drop by and get advice or listen in on important discussions. Even so, he wanted to forge his own path.

While someone with his net worth could retire at 61, Murstein hopes to be like his parents. Alvin, at 91, is the second-oldest CEO in the United States behind Warren Buffet, who announced he’s retiring at the end of the year. His mother started her own real estate firm when women were hardly seen working, much less owning her own business in the 1970s. At 84, she’s still working.

“Me, I’d like to still be working thirty years from now,” says Murstein, who still has hope his children might become that fourth generation. Currently, his son works at an investment bank and his daughter, Kimberly Murstein, is a social media influencer with more than a million followers on social media and hosts the podcast “Excuse My Grandma” with her grandmother.

With $2.8 billion in assets and growing, Murstein could put his feet up on the desk and take a break.

“There’s a lot more that Medallion can do,” says Murstein, referring to both financial success and helping others attain their goals. “I work around the clock and love what I do.”

Todd Shapiro is an award-winning publicist and associate publisher of Dan’s Papers.