How Investment Firms are Finding Value in a Competitive Market

Ryan Supple, HBM’s Director of Deal Origination, along with three investment professionals, discuss investing in private markets at a recent alumni event hosted by the Chicago Booth Alumni Club of New York City.

The heightened competition for investments has resulted in investment firms pursuing outside-the-box methods for both sourcing opportunities and deal structuring. Investors across the board (family offices, private equity firms, fundless sponsors) are experiencing the same pressures: how to stand out in a sea of potential suitors. All indicators are pointing towards continued deal momentum in 2018, bringing the topic of how firms can differentiate themselves straight to the forefront.

Ryan Supple, HBM’s Director of Deal Origination, recently participated in a Chicago Booth panel discussion on investing in private markets.  Ryan was joined on the panel by Charles Boorady, Founding Managing Director at Health Catalyst Capital, Gennaro D’Agostimo, Chief Capital Officer at The Conti Group and Tim Bass, Partner at DW Partners, LP. The conversation moderated by David Hogan, Director at Alex Brown, explored trends in direct investing and how competition is affecting how investment firms source and structure deals.

All panelists agreed that having a differentiated strategy wins a seat at the table.  However, how well the strategy and business model are communicated will determine how long a firm keeps their seat.  Clear communication about the value the investor can bring both short and long-term has never been more important. Companies want to explore the firm, their history and the people within to determine if they are the best fit for the next phase of growth.

Valuation is still important and will always be.  But, how you can think creatively, specifically around deal structuring is often what is separating firms from others. Investment firms are becoming more innovative when structuring terms, payouts and other incentives to win value deals that are highly contested.

The panelists also discussed the subject of sourcing deals and how to find the “diamond in the rough.”  Utilizing a data-driven approach to sourcing opportunities is essential in today’s competitive market.  By leveraging data, firms can remain at the competitive forefront.

You can learn more about Chicago Booth’s alumni events by clicking here.