Critical need for specialized recruiter for international hires
A PE firm VP came to us with a critical need for a specialized recruiter for their fintech portfolio company. As part of their growth strategy for the portco, they were gearing up to expand into more geographies, so they were in urgent need of language supports that could join their sales team. With expansion into the new markets happening later that year, the PE firm urgently needed a temporary recruiter that could hire 10-12 low-level sales individuals that had finance knowledge, fluency in foreign languages, and were located in the Chicago area.
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade recruiting and staffing needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of recruiting and staffing firms that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria and then connected the client with the select pre-vetted recruiting firm from our invitation-only Intelligent Network that fit their exact needs.
Engaging the recruiting firm, the portco successfully hires staff and expands internationally
Within 24 hours of the initial scoping call, the PE firm and portfolio company were introduced to a PE-grade recruiting firm that had extensive experience in recruiting sales individuals in the fintech industry. The PE firm was able to confidently engage the recruiter and ultimately successfully hire the individuals they needed in order to have full support as they expanded their geographic reach.
Charlie Gifford co-founded private equity firm New Heritage Capital in 2006, and has been investing in founder-owned, lower middle-market businesses for 22 years. He leads the firm’s origination practice, focusing his efforts on generating new investment opportunities and developing and maintaining intermediary relationships. In addition to his passion for the New England Patriots, Gifford is a strong believer in the concept of capital-and-thought partnerships for the companies in which his firm invests. The result: incentives for both founders and investors pointing in the same direction.
I caught up with him to get his take on everything from identifying the right-fit investments and what makes a great partner, to why expertise matters and the opportunities ahead for PE in 2022.
Sean Mooney: You co-founded New Heritage Capital in 2006, what was the genesis of founding the firm?
Charlie Gifford: I met my two current partners in 1999 while working for our predecessor firm. As that firm grew and began to move upmarket, the three of us were still interested in partnering with founder-owned businesses that had yet to access the institutional capital markets. Furthermore, we wanted to continue the model from our predecessor firm—one that incentivized all-star founders to stay on board for three to five years to help us grow the business. We wanted to be a capital partner and a thought partner to these founders. So, we essentially do an equity recap where the owner’s met their liquidity objectives, but we also allow the business owner to remain in control. Of course, the ultimate goal is to achieve superior returns for our investors, and we inherently believe the best way to do that is to identify bullish founders—owners who are interested in maintaining control post-close, and who are motivated by what we call “long term greed,” not just “short term greed.”
SM: You have a unique approach to investing called The Private IPO®—can you talk a bit about that, and how it’s differentiated from other forms of investment?
CG: I always like to point out that in the public markets you wouldn’t want to invest in a company where all the board members and executives are selling their shares. But in private equity, this is the standard model. A company gets acquired and as soon as a day later all the key executives can be laid off. This is counterintuitive to how great companies are built. We think it’s better when the founder is voting with their wallet and not their feet. In this way, we attract a self-selected cohort of maniacal owners who want to stay on board, want to remain in control, and are dedicated to growing their business.
In our Private IPO® solution, we provide significant up front liquidity for founders but also let them keep more control and earn a big piece of the upside. The founders we partner with come for the control piece, but they stay for the equity structure on the backend. If the business meets its growth targets, then they get a huge equity stake on the backend. As their partner, we help them to develop a growth strategy that allows them to double, triple, and even more in size, maximizing that backend equity value for everyone.
SM: What do you look for in a good investment, or partner? In other words, how do you identify founder-owned businesses that are the right fit for both New Heritage and the founder-owner?
CG: Interestingly, one of the very common traits we see in our partners is the individual that has worked at a large strategic competitor in their industry. They have grown a little skeptical about the prospects of growth: perhaps the company has taken their eye off the ball, isn’t innovating, or doesn’t treat the employees well. These founders have identified a clear market opportunity, so when they spin out of their current company they immediately begin to take market share by offering a better service or product. This new company is more nimble and meets the needs of their customer base more effectively.
SM: How do outside experts and advisors play a role in your business?
CG: If we look at the concept of market efficiency (where we are now versus 1999) there used to be no such thing as market networks. PE funds were left trying to figure out every detail out and conduct diligence on their own. The market is extremely competitive right now, particularly in terms of full-time talent; but the ability to call on BluWave for specialized project needs or interim executive talent means you have a better shot at not getting beat to the punch. In general, we are all attracted to growth, strong management, and industry tailwinds; but without the ability to get smart fast, it’s near impossible to be competitive.
SM: The pandemic certainly changed business as usual. What is the biggest lesson you’ve learned from the past two years? How has it affected your future outlook?
CG: One of the benefits of being a 15 person firm, many of whom have worked together for over a decade, is that there is a real comfort level in being candid, and a true sense of “all for one and one for all.” Everyone at the table has a voice. Our approach is collaborative and collegial. So, when the pandemic hit, we worked remotely for six months; but people wanted to come back to the office as soon as it was safe to do so. We inherently believe that this is an apprenticeship business and you learn by watching and doing. As for the future outlook, we think it’s bright. Our companies managed through COVID very well and the resiliency of the private markets has been incredible. We see strong earnings and strong deal flow in 2022.
SM: What are some major PE themes you’ve seen in 2021 that you think will have implications for next year (and possibly beyond)?
CG: For starters, PE will likely continue to pay up for good companies, and will be forced to close quicker with fewer contingencies. But I am just waiting for the music to stop, because things cannot go up and to the right forever. Having said that, it does say a lot about our country that our economy is still robust given all of these economic challenges created by the pandemic.
One common refrain we will continue to hear is the difficulty to attract workers and rising cost of labor. Due to this “missing middle”, prospecting and rainmaking has suffered somewhat, because everyone is working tirelessly on the necessary tasks to close deals in advance of year end.
SM: Now for the most important question: How do you really feel about Tom Brady leaving the Patriots?
CG: When you’re talking about the GOAT it’s hard not to wish him well, given the fact he always did what was in the team’s best interest by accepting a below-market contract. What he’s accomplished is truly remarkable. That said, I’m a Pats fan first and a Brady fan second, and now Belichick seems to be having the team playing it’s best football of the season around the holidays after a rough start– a true telltale sign of a Belichick coached team. It looks as though America’s worst nightmare is back…without Brady this time.
Food and beverage portco critically needs procurement consulting group
A PE firm VP came to us with a critical need for a raw materials procurement strategy consulting group for their food and beverage portco. Having recently acquired the platform that was growing rapidly, they needed a group that could develop and implement a sophisticated purchasing and procurement strategy for them. With COVID and inflation leading to supply chain issues and fluctuating prices on their raw materials, they urgently needed a procurement expert with experience in PE & this section of the food and beverage raw materials market that could dig into the numbers and create a tactical plan.
BluWave identifies procurement group to match firm’s specific needs
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade procurement needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of procurement consulting groups and individuals that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria and then connected the client with the select pre-vetted procurement group from our invitation-only Intelligent Network that had the exact industry experience they were looking for.
Firm engages provider and begins developing procurement strategy
Within 72 hours of the initial scoping call, we connected the PE firm with the exact procurement group that they needed. The PE firm was able to confidently engage this group and quickly help the portco get on track with their procurement strategy while also cutting unnecessary costs in the supply chain.
An LMM PE firm ops partner and portco CFO came to us with a critical need for an IT Managed Services Provider (MSP) that could optimize and monitor the portco’s needs in the Azure development space. With past reliance on a small team that set everything up in Azure, their systems were in desperate need of optimization and 24/7 monitoring in order to ensure that no issues were occurring. They were in critical need of an MSP that had knowledge of the insurance business, was familiar with systems working for both internal and external users, and could understand how to use and integrate with APIs.
BluWave uses pre-vetted network to find top MSPs
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade MSP needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of MSPs that uniquely meet the private equity standard. We interviewed the PE firm and portco leadership to understand their specific key criteria and then introduced them to two select pre-vetted MSPs from our invitation-only Intelligent Network that fit their exact needs.
Firm and portco confidently engage with ideal provider
Within 48 hours of the initial scoping call, the PE firm and portfolio company were introduced to two PE-grade MSPs that had the exact expertise they were looking for. As the decisionmaker for the project, the portco CFO selected their ideal choice. The portco was able to confidently engage the provider without wasting time or cost and rest assured that their services were running correctly thanks to the provider’s 24/7 monitoring.
Interim CFO needed for post-close accounting support at portco
A CFO at a PE-backed consumer products portco came to us with an urgent need for post-closing accounting support for an add-on acquisition the firm was about to close on for the portco. With the add-on about to close, there was an immediate need for an interim CFO that could translate the target’s accounting to align with GAAP, help with monthly closes, prep for audit, begin budgeting, and more. The portco CFO quickly needed an interim CFO for the new add-on that had small company experience, analytical skills, industry experience, and who was available to be onsite for the interim work.
BluWave quickly identifies exact-fit interim available to work
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade interim CFO needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of interim CFOs that uniquely meet the private equity standard. We interviewed the portco CFO to understand their specific key criteria, and then connected the client with two select pre-vetted interim CFOs from our invitation-only Intelligent Network that fit their exact needs.
Client selects ideal candidate to ensure smooth transition with add-on
Within 24 hours of the initial scoping call, the portfolio company CFO was introduced to two PE-grade interim CFOs that specialized in helping companies close books when undergoing a PE add-on acquisition. The client selected their ideal choice. The portco CFO was able to confidently engage the interim resource without wasting time or cost and gain the extra pair of hands he needed to ensure the add-on went smoothly.
PE firm needs group to lead digital transformation for portco
A VP at a LMM PE firm came to us with a critical need for a group that could lead their transportation portco through a full digital transformation project. With the portco’s field service division expanding rapidly and potentially tripling in size soon, they were experiencing pain points related to the amount of paperwork that had to be handled as they dispatched their growing number of employees throughout the region. They urgently needed an IT strategy practitioner with experience in the LMM, transportation industry, and field services area that could help them take steps towards becoming fully paperless.
Using pre-vetted network, BluWave identifies IT strategist
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade IT strategy-related needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of IT strategy practitioners that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria and then connected the client with three select pre-vetted IT strategy consulting firms from our invitation-only Intelligent Network that had specialized practitioners in leading digital transformations.
Firm engages selected provider and begins digital transformation
Quickly after the initial scoping call, the PE firm and portfolio company were introduced to the three PE-grade IT strategy consulting firms that specialized in leading digital transformations for similar-sized companies in the transportation industry. The portco selected their ideal choice and was able to confidently begin their digital transformation without wasting time or cost, and while trusting it to an expert pair of hands.
As part of an ongoing series, we’re sharing real-time trending topics we are hearing from our 500+ PE fund clients. In our most recent installment, our consulting manager, Keenan Kolinsky, talks about the impacts of inflation he is hearing across our clients. We are hearing this manifest in two primary ways:
A surge in leveraging specialized pricing experts to help adjust portfolio company pricing structures
The increased need for sourcing and procurement resources to identify and secure cost-effective supplier and logistics relationships
To learn more, watch the video below.
Interested in learning more about the cases Keenan mentioned, view them here.
With the importance of ESG rising in terms of investment evaluation across the board, we are hearing from our more than 500 private equity firm clients that questions on ESG policies and reporting are increasingly coming from LPs. Before you start raising your next fund, here are three steps you can take to start being proactive in being able to answer any questions that may come.
1) Develop policies at the fund level.
If you don’t have them already, the best place to start with ESG is to develop policies at the fund level. These policies can serve as a guiding light for how actions can be taken throughout the firm, down into portco investing, to help advance ESG efforts.
Our clients have leveraged third-party ESG experts to help them develop and implement ESG strategies for the first time.
Additionally, third-party ESG diligence resources have tools and scorecards they use to audit companies against SASB standards, allowing for an easy way for you to measure your target company against other companies in the same field.
3) Monitor progress against ESG targets at both the fund & portco level.
LPs are no longer just going to look for ESG policies to be in place, they are going to look to see if action is being taken against these policies. The best way to prove this is by having metrics that show progress, and we have third-party resources in our network that will help you build in ways to track them over time.
At the portco level, these resources will allow you to collect and visualize your ESG data, making the impact of your efforts easy to understand, demonstrate to LPs, and analyze. These resources will also allow you to implement software tools that will make tracking and monitoring your efforts more automated.
No matter your ESG need, we have the resources to help you streamline your efforts and prove your action. Contact us to schedule a scoping call, we’d be happy to hop on the phone and quickly get started in providing you with the solutions you need.
As a private equity deal QB, BluWave founder & CEO, Sean Mooney, faced challenges in the value creation process. He felt as though he was consistently getting generalist results from generalist providers. He also faced the pressure of knowing that one wrong move could follow him around for the rest of his career in private equity. After dealing with these challenges and working his way up to be a Partner at a PE firm, Sean decided to create the solution to the problems he always had by founding BluWave. The solution he envisioned gave deal QBs the exact provider they need at the exact time they need them. Providers who have a specialty in specific areas will be connected with the private equity deal QBs as soon as the need arises. This gives success with ease for private equity deal QBs who are lacking value creation with their service providers. That is exactly what BluWave has become today.
BluWave helps with value creation for deal QBs by providing them with:
A PE fund managing partner came to us with a critical need for an operational performance and improvement consultant that could evaluate and redesign the existing layout in one of their manufacturing portcos’ warehouses. Since acquiring the portco, the PE fund had discovered that there were foregone profits due to the lack of logistical reason that had gone into organizing the warehouse. They immediately needed a lean six sigma type consultant to come in and optimize the layout, process, and flow of the warehouse in order to increase operational efficiencies. We quickly worked to understand the key criteria of their need and then leveraged our data and human ingenuity to match them with two select, exact-fit, pre-vetted healthcare services senior advisors from our invitation-only Intelligent Network. The client selected their ideal choice and the PE fund was able to confidently engage the individual to drive operational performance and improvement by increasing warehouse efficiency.
We have a deep bench of ops performance and improvement consultants with a wide array of industry experience and skillsets. We would be happy to quickly connect you with the exact-fit ops performance and improvement consultant or any other service provider you need. Contact us here and our team will begin helping you within 24 hours.
PE Firm needs commercial due diligence and GTM strategist for construction target
A PE firm managing director came to us with a critical need for a commercial due diligence and GTM strategy provider for a target they had in the construction industry. Since identifying this target, they were looking for a group that could quickly perform diligence to determine if the market was strong enough for investment, and then promptly post-close help them develop a GTM strategy. Close to obtaining exclusivity, the PE firm was looking to find a provider with experience in the construction materials space that could move quickly once exclusivity was gained and stay engaged to create value post-close.
BluWave identifies provider to meet exact needs
Leveraging our founder’s 20 years in private equity, we have extensive frameworks for assessing PE-grade commercial due diligence and GTM needs. BluWave utilizes technology, data, and human ingenuity to pre-map, assess, monitor, and maintain deep pools of providers that uniquely meet the private equity standard. We interviewed the PE firm to understand their specific key criteria and then connected the client with three select pre-vetted providers from our invitation-only Intelligent Network that fit their exact needs.
Firm engages with ideal provider to confidently move forward with investment
Less than 24 hours after the initial scoping call, the PE firm was introduced to three PE-grade providers that specialized in commercial due diligence and GTM strategy with experience in the construction materials industry. The client selected their ideal choice, and the PE firm was able to confidently engage this provider without wasting time or costs. They were able to leverage their insights to move forward with the investment and then utilize the same provider to quickly begin creating value in the new portco by developing a GTM strategy.
They have done a good job, been very responsive and given us valuable insights. I would give them good ratings on everything, would recommend them to others and I expect we will use them again in the future.
