“The entire industry has the wind at its back. Public equity market valuations are high. The cost of debt is low. Cash and funding of private equity funds are on pace for one of the best capital raising years since pre-financial crisis. It’s a good time to be out there doing what we do.”

We recently interviewed Carrie DiLauro, Director of Operations at Hamilton Robinson Capital Partners, a lower middle market private equity firm located in Stamford, CT. Carrie shared her thoughts and her firm’s strategies for generating deal flow, navigating higher valuation multiples, creating value and building businesses to weather the storm of macroeconomic or industry specific downturns.

The text below are Carrie’s comments, organized by topic.

I recently spoke to Glenn Oken with Mangrove Equity Partners in Tampa, Florida. With some minor edits, the transcription below captures our conversation surrounding private equity investing and his firm. (Italics text are Glenn’s words.)

Glenn Oken – Mangrove Equity

Introduction

Mangrove Equity Partners is a lower middle market private equity fund headquartered in Tampa, Florida. The team has always been keenly focused on the lower middle market, which I will define as investing in privately held companies making between $2 – $10 million of EBITDA. We invest in companies throughout the United States and Canada. We can invest overseas, but other than Canada, it’s reserved for add-on acquisitions.

The team has completed roughly 138 deals in 60 industries. A lot of our brethren who have that type of experience and have had the returns that we have migrate into larger funds. This categorically means that they have to invest in larger companies. But we are smaller deal guys. We really enjoy working with family businesses and entrepreneurs.

I recently spoke to Nick Braden with the investment bank Evangeline Securities with offices in New Orleans and Lafayette, Louisiana. With some minor edits, the transcription below captures our conversation surrounding middle market investment banking. (Italics text are Nick’s words)

I recently spoke to Ben Wallace of Azalea Capital. With some minor edits, the transcription below captures our conversation surrounding private equity and deal sourcing (italics text are Ben’s words).

Ben Wallace – Azalea Capital

Which deal channels are you closing?

Historically, most of the transactions we’ve closed are with companies we pursued directly or where an advisor has made a limited number of qualified introductions. The number of advisors covering the lower middle market has certainly increased over the last 10 years or so, but we continue to see value in having both a direct outreach to companies in select industries as well as maintaining an active relationship with the advisors covering our target market.

Is valuation a factor at play here?