The President's Investment Strategy

Speaker: Mike Shaw

• Background: Lawyer, not an investor.
  • Partner at Mutt Shellist law firm.
  • Based in Chicago, small office in Orange County, CA.
  • Role: Chair of the firm's corporate department and private equity practice.
• Experience:
  • Started at Kirkland and Ellison Town, focusing on large PE deals.
  • Built a private equity practice at Mutt Shellist.
  • Represents lower-middle to middle market PE funds and some large PE funds on smaller deals.
  • Deals: Platform acquisitions, add-on acquisitions, day-to-day corporate work, outside general counsel for portfolio companies.
  • Works on both buy side and sell side.
  • Understands entrepreneurial sellers’ goals and fears.

Speaker: Michael Voss (Cranbrook Partners)

• Background:
  • Focuses on companies with $5M - $20M in sales.
  • Known partner since 5 years old.
  • Experience in investment banking and engineering.
• Investment Philosophy:
  • Opportunistic investments.
  • No outside finance, hence no rigid investment returns requirements.
  • Focus on companies with growth potential and interesting to them.
  • Enjoys working with fun management teams.
  • No fixed exit strategies; aims for return through growth and improvement rather than immediate flipping.

Speaker: Rodrigo Braga (Braga Investment and Advisory)

• Firm Type: New York-based family office, private equity firm.
• Investment Style:
  • Opportunistic and flexible.
  • No rigid timelines for returns; long-term value creation focus.
  • Interested in companies with a differentiated market position.
  • Pre-close strategy discussions with sellers.
  • Customizes post-close involvement based on the needs and structure of the company.

Post-Close Relationship with PE Sponsors

Speaker: Rodrigo Braga

• Management Style:
  • Varies based on company’s operational needs.
  • Pre-close discussion to define involvement strategy: roles, frequency of meetings, decision scope.

Speaker: Yolanda

• Engagement Styles:
  • Different PE sponsors have varying levels of involvement.
  • Some are hands-off while others are more engaged.
  • Important to understand upfront what kind of engagement to expect.

Speaker: Michael Voss

• Example Companies:
  • Vexor: Weekly report, short weekly calls, monthly board meetings.
  • IT Services Firm: Acquired company runs independently with monthly board meetings.
  • Spot Imaging: Part-time CEO, frequent operational changes.
• General Approach:
  • Management involvement varies by company needs.
  • Balance of implementing changes and stepping back.

Speaker: Mike Shaw

• Private Equity Fund Partner’s Mindset:
  • PE partners have multiple responsibilities (raising funds, new investments, portfolio management).
  • Limited involvement unless critical issues arise or performance declines.
  • Importance of understanding the work style of the PE firm before partnering.

Onboarding a New Portfolio Company

General Insights

• Importance of a Value Creation Plan:

  • High-level plan developed during the deal phase.
  • Becomes more detailed towards closing.

• Creating Detailed, Specific Plans:

  • Avoid generic statements; have clear, specific actions aligned with industry dynamics.
  • Demonstrate past similar successes to build credibility.

Speaker Insights

• Speaker: Melaina:

  • Value Creation: Must have a clear path and action plan.
  • Comment Addition: Executives must avoid generic plans; specificity and clarity are crucial.
  • Question: What similar actions have they successfully executed before?

• Speaker: Joe:

  • Plan Specificity: Identify industry patterns, risks, and leverage clear strategies.
  • Focus Areas: Define core investment theses such as market cycles, new technologies, consolidation strategies.