❤️ Thanks to everyone who brought our newsletter to the attention of new readers last week. The “share function” can be found at the end of the email. Today’s newsletter counts 988 words and takes about 5.0 minutes to read.

Today’s Rundown

• Falling search fund acquisition rates

• How to build a holdco

• Smart moves for your first quarter as CEO

• 6 deal announcements (2 search fund acquisitions)

• 7 career opportunities

📣 New Mittelstand Summit 25, an exclusive and invite-only search fund event, take places on May 20th in Berlin - register here!

Weekly Highlights

• Mineola Search Partners published a new episode of their podcast, discussing whether and why search fund acquisition rates are falling:

  • Historically, about 63% of search funds acquired a business, but since 2014, that rate has dropped to 57%

  • Reasons for that are the following:

    • Increased competition from private equity firms: many investment firms are moving down-market - but this is not seen as the main cause of lower acquisition rates; searchers with strong, independent industry theses and direct relationships with sellers still have a competitive edge

    • Dilution of talent & commitment: Fundraising for search funds has become easier, attracting some individuals who may lack the grit, commitment, or preparation for the grind of search; the "entrepreneurial edge" of searchers may be weaker today than in the past, partially because of how easily some can raise funds

    • Overcrowding & uniformity of search theses: While the raw number of searchers has increased, the bigger issue is that many are chasing the same types of deals (e.g., HVAC rollups), leading to overlap and competition

• Acquiring Minds published a new episode of their podcast with Barker Squire, owner of CraneWorks, discussing how to build a holdco foundation patiently:

  • Self-funded search offers maximum control but it is a grind:

    • Barker chose a self-funded search to maintain control over geography, deal terms, and operations

    • This approach gave him full autonomy, but the search process was long, difficult, and required extreme persistence; it took 18 months of hard work, reviewing thousands of deals, to find the right one

  • Relationships with brokers are invaluable:

    • Despite initial plans to pursue proprietary outreach, Barker found that his best deals came from brokers

    • This insight led him to shift focus entirely to building strong broker relationships, which ultimately delivered his successful acquisition of CraneWorks

  • Buying a business is about selling yourself to the seller:

    • Barker’s success in closing the deal hinged on understanding why the seller wanted to sell and what they wanted from a buyer - not just price, but trust, continuity, and cultural fit

    • His military background and technical comfort with heavy equipment made him a natural fit for the seller’s vision

  • Strong recurring revenue with government contracts is a double-edged sword:

    • The military contracts provided stable recurring revenue with 3-5 year terms, which helped de-risk the acquisition

    • However, government contracting comes with extreme regulatory complexity and bureaucracy, which requires ongoing diligence and compliance

• Sabina Nagpal, founder of Radiate Mind, shared her smart moves for your first quarter as CEO: lead boldly, avoid burnout:

  • Sabina addresses the challenges first-time CEOs face in the search fund ecosystem, particularly during the initial months after acquiring a company

  • This period is critical for establishing effective leadership, and it also carries a high risk of burnout due to a combination of external pressures (investor expectations, company culture) and internal struggles (self-doubt, imposter syndrome)

  • The transition from searcher to CEO can trigger both pride and intense self-doubt

  • New CEOs must quickly build trust with employees who may have decades of experience in the company

  • They also need to implement changes without alienating staff and prove themselves to investors with higher expectations than during the search phase

  • Many new CEOs end up stuck in "overdrive" - focusing on productivity and control - rather than leading with creativity and strategic vision

  • Three strategies to master these challenges:

    • Normalize vulnerability: Challenge the myth that CEOs must have all the answers; embrace vulnerability as a tool to build trust and foster collaboration

    • Shift from overdrive to fulfillment: Effective techniques to reset and maintain mental clarity, such as regular self check-ins to assess mindset and high-impact self-care, summarized as "NESTS": nutrition, exercise, sleep, time for Stillness, and support systems

    • Proactively build a support network: Don’t wait for a crisis to build your safety net; connect with fellow search fund CEOs, mentors, and supportive investors

Deal Announcements

• 🇮🇹 Fitex Capital, Daniele Schiavello’s and Giulio Marini’s search fund vehicle, acquired Napolillo Industry, a industrial laundry company specializing in hotel supplies (link)

• 🇪🇸 Pontem Capital, David Malo Cid’s search fund vehicle, acquired Alonso Luz y Gas, a service provider of light and gas Installations as well as alarm systems (link)

• 🇬🇧 Ardian, a world-leading private investment house, acquired a minority stake in Heathrow, the primary and largest international airport serving London (link)

• 🇩🇪 BID Equity, a small cap PE focused on software, acquired Crisalix, a leading 3D visualization software for aesthetics (link)

• 🇳🇱 Pride Capital Partners, a small cap PE focused on software and IT services, acquired CCIT, a full-service IT provider focusing on IT infrastructure, managed services, Microsoft solutions, document solutions, and consulting (link)

• 🇩🇪 NORD Holding, one of the leading private equity asset management companies in Germany, acquired MedXpert, a provider of implants and instruments (link)

Career Opportunities

• [PE Asset] Managing Director | Rainmaker Society | Darmstadt | €160k + 80k bonus + equity (apply)

• [PE Asset] Interim COO | Phipps Cameron | Nordics (apply)

• [PE Asset] Head of Finance | iGaming | London | £80-100k (apply)

• [PE Asset] Chief of Staff/Strategy Director | Altus Partners | Birmingham | £120-140k + bonus + equity (apply)

• [PE Asset] Interim Head of Finance | Phipps Cameron | Remote | €1.200/day (apply)

• [PE] (Senior) Investment Associate | PER | Berlin (apply)

• [PE] Investment Analyst | Ibla Capital | Rome (apply)

Any suggestions, questions, or criticism? Any topics that should be covered in the future? By answering this email, you’re sliding right into my inbox.