Roll-up strategy as part of PPM
July 15, 2024
by a searcher from The University of Chicago - Booth School of Business in Miami, FL, USA
Has anyone ran a traditional search fund with a roll-up strategy focus? Is this feasible with a traditional search fund?
from University of Notre Dame in New York, NY, USA
(1) Raise capital on a deal by deal basis - if you're set on a traditional search fund structure, you can raise capital to acquire a platform investment and use profits from the platform (or re-reraise capital) to acquire smaller businesses to "bolt-on"
(2) structure your raise more like a traditional PE fund than search fund - have the investors commit capital to a more open-ended timeline where you can call the committed capital over time for multiple investments.
Option (2) is harder because it will require more money and most investors want to see a track record before they commit capital for you to deploy a strategy rather than being able to run the numbers on a specific company.
Most of my clients that do this raise smaller equity checks on a deal by deal basis, but they aren't traditional search funds (i.e., they are self funding their own search and investors are helping write the equity check at the acquisition phase). Happy to talk through structure and what economics would look like, if it would be helpful - DM me or shoot me an email redacted
from Stanford University in San Mateo, CA, USA
https://www.awake.ventures/p/isearchfund-revolutionizing-search-funds-for-the-age-of-the-ai-powered-internet-6wjp4av54v7g9gmt?refBy=Mzg4YmE4ZWViMw&tid=nv_e423e506-83d4-c2a2-7b83-9c425e08443e
Thanks ^redacted for the tag!