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Today’s Rundown:

• The future of search funds

• How to escape the search grind

• J-Curve in search fund acquisitions

• 5 deal announcements

• 6 career opportunities

Weekly Highlights

• Fernando Garcia Benavides, founder of search fund Divisadero Capital, shared his thoughts on future of search funds and ideas on where to focus the search amidst rapid change:

  • Initially favoring SaaS due to its recurring revenues and scalability, the rapid advancements in AI have made software businesses more vulnerable to disruption, prompting a strategic reassessment

  • AI-powered tools like ChatGPT, GitHub Copilot, and AlphaCode drastically reduce the competitive advantages of proprietary software, coding expertise, and speed to market

  • Instead of focusing on software, entrepreneurs should explore industries where AI enhances operations rather than fundamentally disrupting the business model

  • Industries like specialized hardware manufacturing, industrial and commercial services, healthcare, and logistics offer long-term defensibility as AI improves efficiency without replacing core operations

  • Unlike software businesses that are externally disrupted, physical product manufacturing and human-centric services remain resilient to AI displacement

  • The safest long-term strategy is to own a business that can leverage AI for efficiency gains rather than being employed in a field where AI could replace human labor entirely

• Jake Nicholson, managing director of search fund investor SMEVentures, published his thoughts on how to escape the search grind:

  • The search process is tough and lonely as many aspiring searchers enter the field with dreams of becoming CEOs but quickly realize the process is filled with rejection, cold-calling, and long hours without immediate results

  • Unlike traditional business roles where growth metrics indicate success, the search phase is binary: you either acquire a company or you don’t, making it difficult to measure progress

  • Building a strong pipeline is crucial - having multiple deals in different stages prevents a single failed acquisition from stalling momentum, ensuring continuous progress in the search journey

  • Preliminary or non-binding offers help searchers learn about industries, refine valuation skills, and gain real-world experience, keeping the process engaging

  • The search process can be isolating, so forming a support network with fellow searchers, advisors, or interns provides accountability, collaboration, and motivation

  • Embracing the journey as a learning experience helps and rather than just seeing it as a means to an end, viewing the search as an opportunity to gain deep industry knowledge and expand business acumen makes it more rewarding

  • The process is a marathon, not a sprint and staying consistent, learning from failures, and pushing forward despite setbacks is crucial for success

• Search Fund News published a piece on the J-Curve in search fund investments:

  • When acquiring a company through a search fund, the financial and operational trajectory often follows a J-Curve - similarly to traditional private equity

  • A 10-15% EBITDA drop in the first year is common and expected as sellers often optimize EBITDA pre-sale and acquisition costs, integration challenges, and leadership transitions create initial friction

  • Financial recovery starts as revenue stabilizes and debt repayment becomes manageable as well as process improvements, cultural shifts, and key hires begin to yield first results

  • Scaling through geographic expansion, digitalization, new products, and M&A leads to real value creation

  • After 5-6 years, the company is positioned for a successful exit or long-term value generation

Deal Announcements

• 🇬🇧 Josh Neely and Ben Saward launched London-based Novi Growth Partners, a search fund focused on business services, environmental, technology, healthcare, and light manufacturing (link)

• 🇬🇧 Dean Curran, founder of search fund Agile Circuit Technology Group, acquired Active-PCB Solutions, an UK manufacturer of high-quality PCBs, PCB Assembly and mechanical 'box-build' services - it’s his second search fund acquisition (link)

• 🇵🇹 Minerva Insights, an Ufenau Capital asset and independent market research firm, acquired Adjinn, a digital advertising analytics and insights company (link)

• 🇪🇸 Trison, a L-GAM asset and one of Europe’s largest digital signage integrator, acquired Zero-In, its long-time partner of digital experiences of the real world (link)

• 🇩🇪 COI Partners, a small cap private equity fund focused on growth investments, acquired B+G Schweiz, a provider in the gardening, landscaping and sports facility construction sector (link)

Career Opportunities

• [PE Asset] Managing Director | Rainmaker Society | DACH (apply)

• [PE Asset] CFO | Camino Search | Remote (apply)

• [PE Asset] Head of M&A | Altus Partners | London (apply)

• [PE Asset] M&A Business Development Associate | Camino Search | Amsterdam (apply)

• [PE] Intern | NORD Holding | Hannover (apply)

• [PE] Working Student / Intern | Maguar | Munich (apply)

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