Top 6 Investment Firms with Demonstrated Deep Business Services Sector Expertise
The business services sector has enjoyed a strong set of technology-enabled growth trends. Therefore, PE and VC investors can benefit from steady organic growth and the opportunity to execute lucrative buy-and-build strategies to create scale players. While the pandemic’s dramatic slowdown in global economic activity would certainly harm demand for outsourced services in the short term, the longer-term outlook in this sector is still strongly positive. Within a partnership between business service companies and investment firms, the four areas that deliver the biggest impact include optimizing service delivery, improving the operating model, creating a more focused and efficient commercial organization, and applying digital technology.
There’s no doubt that PE and VC firms would enable companies to better exploit their potential. With the capital they provide, business services companies can drive development and remain independent. In addition, these firms generally bring their expertise and excellent contacts to the portfolio companies, which they can employ to their advantage. That enables growth and strengthens a company’s innovative capacity and competitiveness. When compared to publicly traded or family-owned enterprises, companies backed by PE and VC firms tend to expand faster, have a more targeted strategy and a superior funding structure.
If you’re looking to raise capital in order to support and develop your business services company, then take a look at our list of the best and most trusted 6 PE and VC investors that make it worthwhile to consider!
#1: Clearview Capital – Accelerating Growth in Partnership with Management
Founded in 1999, Clearview Capital is a private equity firm specializing in the acquisition and recapitalization of North American companies. The firm proactively seeks to make control and non-control investments in the business services sector among others. Its principals have a successful track record of completing transactions and creating and realizing value in portfolio companies. It’s interested in businesses wishing to be significant stakeholders in the newly acquired enterprise. The management teams of its portfolio companies operate with autonomy, and the firm does not desire to be involved in day-to-day operations.
The firm strongly believes in maintaining open and effective communications with management teams, investors, and lenders. Its philosophy is to “do what we say we are going to do”, which has earned it a reputation for trustworthiness and integrity that serves as the foundation of our business. Clearview Capital’s goal is to partner with the management of successful enterprises where the experience of its team combined with capital from its funds can be leveraged to drive profitable growth. The firm expects to work with management for a period of three to seven years after which the firm will seek liquidity for itself and for its partners.
Some of its outstanding portfolio companies within the business services sector include Next Net Media, which provides freelancer-powered services focused on digital marketing solutions and content creation for small and mid-sized businesses; Infinity Worlds and Belmont Partners, the leading provider of marketing services to emerging brands and private label manufacturers; Workforce Solutions, which offers management consulting services focused on organizational improvement, leadership development, communications and advocacy; UpSwell, a provider of turnkey, data-driven direct mail and related marketing solutions primarily to small and medium-sized businesses and franchisees; and many others.
#2: Mountaingate Capital – Building Industry Leaders
Founded in 2016, Mountaingate Capital is a private equity firm investing heavily in companies operating within the business services sector, where the firm has substantial experience and expertise. The firm’s sole mission is to partner with management teams to advance lower middle market companies into industry leaders through a buy-and-build value creation strategy, with rigorous adherence to customer-centric organic and acquisition growth. While Mountaingate does not participate in its portfolio companies’ operations on a daily basis, the firm focuses intensely on building and reinforcing a shared strategic vision for the business with its management team partners.
Mountaingate supports passionate entrepreneurs and management teams to accelerate growth through both acquisitions and organic growth initiatives. It takes a servant leadership approach in providing services and expertise to management to support the execution of the vision. Its team is actively involved in assisting management with strategic planning, identifying, and executing acquisitions, supporting investments in people, systems, technology, and arranging financing. The firm believes that this provides portfolio companies with a significant advantage in implementing a successful growth strategy with the objective of becoming a true industry leader.
Some of its outstanding portfolio companies within the business services sector include RevUnit, a premier digital strategy and product studio helping enterprise workforces leverage technology; Bold Orange, a human connections company modernizing loyalty, CRM, and digital experiences for both consumer and business-to-business brands; ImagineSoftware, the leading provider of billing automation software and revenue cycle management applications offering technology solutions for medical billing offices, practices, and hospitals; Avizent, which was formed to acquire regional third party administrators serving the self-insured and high-deductible workers’ compensation market; and many others.
#3: Searchlight Capital Partners – Partnering to Create Value
Founded in 2010, Searchlight Capital Partners is a private equity firm that focuses on business services and many other sectors with significant investment experience in a wide range of industries. The firm has the ability to invest across the capital structure in both equity and debt. It seeks to invest in attractive companies across a wide range of industries and is very willing to invest in complex situations. The firm’s objective is to work in partnership with company management by providing patient, long-term capital as well as strategic and operational support to enhance value creation for all stakeholders.
Searchlight’s investment team has expertise in a wide range of transaction types, including leveraged buyouts, growth equity, recapitalizations, and investments throughout a company’s capital structure. The firm provides flexible capital in situations in which its capital and strategic support enhance value. Searchlight drives value through creative transaction structuring, thoughtful strategic direction, operational expertise, deep industry knowledge, and an integrated transatlantic team. The firm has worked successfully in partnership with leading corporate and family-owned businesses throughout the world.
Some of its outstanding portfolio companies within the business services sector include Electric Lightwave, the pioneering fiber-optic network providing broadband data, advanced networking, cloud and voice services to businesses; Rackspace, a global provider of managed IT infrastructure and services, offering outsourced cloud computing and managed hosting to small mid-sized businesses and enterprise customers; Shift4 Payments, the leading non-bank payment processor and payment solutions provider serving small-medium business merchants in the U.S; Survitec, a manufacturer and servicer of safety systems for commercial marine and defense applications; and many others.
#4: Trinity Hunt Partners – Building World-class Services Companies
Founded in 1993, Trinity Hunt Partners is a growth-oriented private equity firm seeking to make investments in the majority and significant minority recapitalizations, buy-and-builds, management buyouts within business services, which is one of its main sectors. The firm prefers to partner with owner-operated businesses to accelerate their growth and achieve their full potential. It focuses on areas where the teams have developed a successful track record, industry-specific operating resources, and a thorough understanding of industry best practices. When investing in portfolio companies, the team strives to become a value-added partner, not owners.
For each of its portfolio companies, Trinity Hunt brings a world-class toolkit of operating resources in each functional area. Through both internal and external resources, the firm provides the strategic, operational, and financial expertise to help take entrepreneurial businesses to the next level. It provides entrepreneurs with operating resources and expertise while collaborating with the management team to provide strategic guidance and support to further drive the success of the company. The firm’s culture is built on trust, transparency, respect for people, and a servant leadership mentality, aligning itself with committed management partners to make data-driven, consensus-oriented decisions
Some of its outstanding portfolio companies within the business services sector include Aperture, a full-service provider of litigation focused forensic engineering services primarily in the areas of premises liability and safety engineering, accident reconstruction and construction-defect analysis; Exclusive Concepts, a provider of digital marketing and advertising services for eCommerce-focused clients; Dataprise, a provider of IT managed services offering IT Management, IT Strategy, Consulting, and Information Security Solution; Improving, a leading software company that offers advanced technology consulting, training, and development services; and many others.
#5: Warburg Pincus – Taking a Long-Term Perspective
Founded in 1966, Warburg Pincus is a leading global private equity firm focused on growth investing, building world-class businesses around the globe. The firm’s active portfolio of more than 200 companies is highly diversified by a variety of sectors, including business services. It is an experienced partner to management teams seeking to build durable companies with sustainable value. Warburg Pincus’ globally integrated private partnership ensures that all of the firm’s resources are committed to the success of each portfolio company.
The firm’s strategy combines deep industry and local market experience, the flexibility to support all stages of a company’s development, and fully aligned interests among its portfolio company management teams, limited partners, and the firm’s professionals. The firm works with its management partners to form strategies, create appropriate capital structures, analyze merger candidates, evaluate and recruit talent, and implement digital innovations. It takes a long-term perspective and invests in businesses at all stages of development, from founding start-ups and supporting growth in new and developing companies, to leading complex recapitalizations or large-scale buyouts of more mature businesses.
Some of its outstanding portfolio companies within the business services sector include A-LIGN, a leading provider of cybersecurity auditing and testing services, including assessments, certifications, and penetration testing; Businessolver, a provider of SaaS-based employee benefits administration software and services, serving U.S. based, mid-size and enterprise clients; Sagent Lending Technologies, which brings entrepreneurial energy to clients that’s grounded by industry-leading credibility; Duravant, a global provider of highly engineered automation equipment and related aftermarket solutions for packaging, material handling, and food processing applications; and many others.
#6: Pamlico Capital – Committed to Being a Trusted and Valued Partner
Founded in 1988, Pamlico Capital is a private equity firm that seeks to make buyout and growth equity investments in lower middle-market businesses. The business and tech-enabled services sector is one of the main sectors the firm prefers to invest in. It’s committed to developing successful partnerships with management teams and entrepreneurs and helping companies reach their full potential. Its investment professionals possess extensive industry experience, a proven ability to accelerate growth at their portfolio companies, and a dedication to the highest ethical standards. The firm has developed a strong network of industry executives and advisors that has become a cornerstone of our success.
Based on its long history and consistent focus, Pamlico Capital has deep pattern recognition around the challenges that management teams face when scaling a business. The firm helps its portfolio realize exceptional results with capital, ideas, and encouragement. Pamlico Capital is committed to being trusted and valued partners to the people and companies that we work with each day. It has decades of experience in building great businesses and numerous resources to support companies, but also the humility to know that it doesn’t come with all the answers.
Some of its outstanding portfolio companies within the business services sector include CEATI International, a member-driven organization providing expert advice, research, and tools to help electric utilities solve their most pressing operational and strategic challenges; BNI, the world’s leading networking-based business development platform providing a structured and proven referral marketing program; IntraLinks, which provides online data and document workspaces that connect business communities and accelerate the intelligent flow of information; IBBS, a provider of managed software solutions that enable broadband providers to deliver exceptional services and reduce unnecessary operations costs; and many others.
The Bottom Lines
With proven successful track records, those trusted investment firms would be willing to get involved in your business services company’s operations, lending you their skills and expertise, and access to useful contacts. Their participation could also be beneficial in assisting you in making important business decisions and developing an effective plan. As one of the most active sectors in the age of technological transformation, business services is expected to grow even stronger with valuable investments from PE and VC firms.