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Today’s Rundown

• Webinar on “boring” small businesses

• Investor update of publicly listed search fund investor Kingsway Financial Services

• Interview with a searcher that recently completed fundraising

• 3 deal announcements (1 search fund launch!)

• 4 career opportunities

Database Overview

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Weekly Highlights

• Grant Hensel, an experienced SME entrepreneur and investor as well as founder of Entrepreneurial Capital, shared his experience in his webinar around investing in profitable, "boring" small businesses:

  • Grant Hensel founded Entrepreneurial Capital to offer investors simple, diversified access to self-funded search deals, focusing on acquiring profitable, small, "boring" businesses often overlooked by traditional private equity

  • The firm targets businesses with $750K–$2M EBITDA, low customer concentration, low capital requirements, low cyclicality, and a long history of stable profitability; typically purchasing them at 3-5x EBITDA

  • Entrepreneurial Capital structures investments with attractive terms for investors, including a 10% preferred return, full return of capital before profit-sharing, and "step-up" equity incentives aligned with searcher success

  • Self-funded searchers have strong alignment with investors by personally guaranteeing loans, investing their own money, and only profiting after returning full capital and preferred returns

  • Grant emphasizes that selecting highly trustworthy, capable searchers is more important than the business itself

  • The fund plans to invest in 13–18 businesses over 2–3 years, distributing cash flows quarterly to investors rather than recycling proceeds, aiming for diversified, cash-generative returns

• Kingsway Financial Services, the only publicly traded holding company that employes the search fund model, released an April 2025 investor update as well as its 2024 annual report:

  • Kingsway leverages the search fund model to acquire small, high-quality service companies, using a decentralized management approach and emphasizing recurring revenue and asset-light businesses

  • The company targets two to three acquisitions annually, focusing on businesses with $1–3 million EBITDA, benefiting from a tax-efficient structure with $622 million in net operating loss carryforwards

  • Kingsway’s strategy involves empowering talented operator-CEOs, investing in technology and processes post-acquisition, and driving organic growth to fuel a compounding flywheel of value creation

  • Their portfolio is diversified across B2B services, healthcare, vertical market software, and skilled trades, aiming for an underwriting hurdle of 30%+ IRR while maintaining disciplined acquisition standards

  • Today, Kingsway controls 10 subsidiaries that generate a total operating income of $11.6m

  • Kingsway offers public investors a unique, liquid, and transparent entry into the traditionally private search fund asset class, supported by a world-class advisory board and a proven track record of high returns

• Videesha Boeckle, General Partner at SME tech investor āltitude, interviewed Bastian Faulhaber, founder of Faulhaber Unternehmensnachfolge, on the launch of his search fund:

  • Bastian leverages his experience in startups, VC, and family-run SMEs to tackle Germany’s urgent SME succession challenge

  • He created a modern search fund focused on acquiring profitable SMEs and gradually implementing digital transformation, prioritizing stable succession before scaling improvements

  • Bastian stresses that many SME owners delay succession planning, and platforms like DealCircle and DUB, along with AI-powered proactive outreach, are essential for sourcing opportunities

  • His acquisition targets are profitable B2B service companies with €1–8M EBITDA, minimal capital intensity, and strong customer relationships, especially in regulated sectors like TIC (testing, inspection, certification)

  • Digitalization is a major lever as Bastian believes tools like Gen AI can help traditional SMEs evolve operationally and strategically without disrupting their core strengths

  • He highlights the cultural gap between venture-backed startups and SMEs, emphasizing that successful successors must commit long-term, integrate into smaller communities, and respect the traditional work environment

  • Finding the right founding team, with a mix of SME, tech, and operational expertise, was crucial to building a succession platform capable of lasting transformation and sustainable growth

Deal Announcements

• 🇪🇸 Diego Canales Delgado and Nicolas Romo Portal launched Targo Capital, a sector-agnostic search fund with a buy & build strategy (link)

• 🇪🇸 Lauria Partners, the search fund vehicle of Miguel Camino and Álvaro Horstmann, acquired GUTMAR, an aviation and aerospace component manufacturing company (link)

• 🇫🇷 Performer Group, the acquisition of search fund Lea Transmission, managed by Bruno Lea, completed the refinancing of its €25m senior debt (link)

Career Opportunities

• [PE-Asset] M&A Manager | Hubexo | London (apply)

• [PE] Investment Manager | PER | Berlin/Munich (apply)*

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

• [PE] Investor Relations Analyst | PER | Munich (apply)*

_*Headhunter

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