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Today’s Rundown

• Search fund equity structures

• Search funds with business success and social impact

• 5 deal announcements (4 search fund launches!)

• 9 career opportunities

Database Overview

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Weekly Highlights

• Edgar Preixens, Principal Associate at Cuatrecasas, explores how equity is typically structured in a search fund:

  • In the traditional structure of search fund searchers can earn up to 25% (solo) or 30% (partners) of company equity and vesting happens in 3 equal tranches:

    • 1/3 vests at acquisition of the company

    • 1/3 vests over 4-5 years of management (time-based, possibly accelerated if early exit)

    • 1/3 vests based on investor IRR:

      • IRR < 20% → no vesting

      • IRR 20-35% → partial vesting (proportional)

      • IRR ≥ 35% → full vesting

    • Cash distribution follows a waterfall: investors recover capital first, then returns, then searchers share

  • Lately, some searchers have negotiated modifications to the vesting structures such as:

    • 50/50 split model: 50% vests at acquisition and % vests based on IRR (same IRR thresholds as traditional model)

    • Reverse vesting model: 2/3 vests at acquisition but partially forfeitable if the searcher leaves early (good leaver/bad leaver rules); investors may buy back unvested shares; Governance adjustments are needed (stronger investor approval rights)

  • Financial criteria for performance vesting:

    • IRR-based vesting encourages faster exits, aligning incentives with investors

    • MOIC-based vesting could encourage longer holding periods but may delay exits

    • Some propose using a combined IRR/MOIC ladder to balance incentives

• Harvard Business School published a new episode of their Think Big, Buy Small podcast - Adriana Garcia Ceja on the journey and impact of a mission-driven searcher:

  • ETA allows mission-driven entrepreneurs to combine business success with social impact

  • Adriana was unusual in ETA for being highly selective about the industry - she cared deeply about elder care or addiction recovery from the start

  • ETA is often divided: some prioritize any profitable business; others (like Adriana) want deep personal connection to the business

  • Adriana acquired ElderTree Care Management, a company providing care coordination and medical advocacy services for older adults:

    • ElderTree’s revenue comes entirely from private pay clients, which avoids regulatory complexities associated with Medicare or Medicaid

    • Services are billed hourly in six-minute increments, with higher rates for urgent, off-hour support

    • The business offers true 24/7 availability, positioning itself as a premium service provider

  • Adriana sees the following opportunities:

    • The elder care management industry is highly fragmented, often consisting of solo practitioners

    • Strong potential for growth through geographic expansion and acquiring smaller competitors

    • There is significant growth potential due to the aging population and increasing demand for concierge healthcare

    • New pricing models, possibly introducing subscription-based elements alongside hourly fees to create more predictable revenue

Deal Announcements

• 🇩🇪 DriveLock, a Nordwind Growth asset and provider of comprehensive IT security, acquired HYPERSECURE, an IT security, regulatory compliance and the digital sovereignty platform (link)

• 🇫🇷 Gilles Rieu launched 7Iron Capital, a sector-agnostic search fund (link)

• 🇦🇹 Alexander Belcredi and Lorenzo Corsini launched LANA Ventures, a search fund focused on healthcare and pharma (link)

• 🇳🇱 Philip Tulp and Michaël Bayer launched Fonteyn Partners, a sector-agnostic search fund (link)

• 🇫🇷 Mohamed Mtimet launched Jadore Capital, a search fund focused on tech & software (link)

Career Opportunities

• [PE-Asset] Head of Finance / CFO | Rainmaker Society | Frankfurt/Berlin (apply)*

• [PE-Asset] Head of Finance | Privatal | Berlin (apply)*

• [PE-Asset] M&A Manager | Camino Search | London (apply)*

• [PE] Investment Principal | AURELIUS | Zurich (apply)

• [PE] Senior Investment Manager | BWK | Stuttgart (apply)

• [PE] Investment Manager | Brock & Decker | Munich (apply)*

• [PE] Investment Associate | PER | Frankfurt (apply)*

• [PE] Investment Associate | PER | London (apply)*

• [PE] Investment Associate | PER | London (apply)*

_*Headhunter

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