In The Trenches

Is the Search Fund Acquisition Rate Falling? With Jim Edmunds, Badge Stone & Kent Weaver


Listen Later

This episode is brought to you by ⁠⁠Boulay, the industry standard for Quality of Earnings, tax, and audit services, serving search fund entrepreneurs for 20+ years⁠⁠



*



This episode is brought to you by ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Oberle Risk Strategies⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠: Insurance Broker and Insurance Due Diligence Provider for Search Funds and Other Small-to-Medium-Sized Businesses⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠

 

 

*

 

 

Across all known search funds since the inception of the model in the 1980s, ~63% of funds have gone on to acquire a company. However, since 2014, the acquisition rate has decreased, hovering around ~57% over the past 10 years.


Today I'm joined by three of the most experienced and respected investors within the search fund ecosystem to discuss A) Why the acquisition rate among search funds has fallen over the past 10 years; and B) Whether the rate of acquisition is likely to fall further in the years to come.


Joining me today are Jim Edmunds (Search Fund Partners), Badge Stone (WSC), and Kent Weaver (Granite Point Partners).


Today's episode revolves around the testing of 8 hypotheses, submitted to us via a survey of 1,000+ searchers & CEOs. Those hypotheses include:


Encroachment: PE moving further down market?

Capacity: Investors with too many searchers in their portfolios?

Competition: Too many search funds in the market?

Dilution of Talent/Commitment: Too many part-time searchers?

Valuation Expectations: Sellers no longer willing to transact at palatable multiples?

Cost of Capital: Search funds have a higher cost of capital relative to other buyers?

Searcher Fatigue: Sellers and intermediaries becoming disillusioned with the value proposition of search funds?

Email: Deliverability challenges too much to overcome?



Please enjoy!

...more
View all episodesView all episodes
Download on the App Store

In The TrenchesBy Steve Divitkos

  • 5
  • 5
  • 5
  • 5
  • 5

5

13 ratings


More shows like In The Trenches

View all
Masters in Business by Bloomberg

Masters in Business

2,183 Listeners

Built to Sell Radio by John Warrillow

Built to Sell Radio

208 Listeners

Founders by David Senra

Founders

1,775 Listeners

M&A Science by Kison Patel

M&A Science

123 Listeners

Capital Allocators – Inside the Institutional Investment Industry by Ted Seides – Allocator and Asset Management Expert

Capital Allocators – Inside the Institutional Investment Industry

815 Listeners

Think Like an Owner by Alex Bridgeman

Think Like an Owner

103 Listeners

Dry Powder: The Private Equity Podcast by Hugh MacArthur, Bain & Company

Dry Powder: The Private Equity Podcast

139 Listeners

The Memo by Howard Marks by Oaktree Capital Management

The Memo by Howard Marks

411 Listeners

Acquisitions Anonymous - #1 for business buying, selling and operating by Bill D'Alessandro, Mills Snell, Heather Endresen, and Michael Girdley

Acquisitions Anonymous - #1 for business buying, selling and operating

243 Listeners

The Private Equity Podcast, by Raw Selection by Alex Rawlings

The Private Equity Podcast, by Raw Selection

30 Listeners

Business Breakdowns by Colossus | Investing & Business Podcasts

Business Breakdowns

339 Listeners

Acquiring Minds by Will Smith

Acquiring Minds

237 Listeners

The Morgan Housel Podcast by Morgan Housel

The Morgan Housel Podcast

963 Listeners

Moneywise by Hampton

Moneywise

636 Listeners

Think Big, Buy Small by Harvard Business School

Think Big, Buy Small

31 Listeners