Insights into the Private Equity Lower-Middle Market

Insights into the Private Equity Lower-Middle Market

In this episode of The Private Equity Podcast, Alex Rawlings speaks with Paul Isaac, Managing Partner of Isaac Management LLC, about investing in lower-middle-market businesses through a permanent-capital model. Paul explains why Isaac Management operates without a traditional fund, predetermined exits or outside investor pressure. He discusses the risks of overleveraging, the importance of understanding a company’s community and culture, and why higher interest rates have created a disconnect between buyer expectations and seller valuations. The conversation also explores Paul’s journey from banking and private credit to launching his own investment firm, how buyers can build trust with founders, and why operational improvement and talent development often create more sustainable value than financial engineering or acquisition-led growth. Key Takeaways * Why excessive leverage and weak market understanding can undermine an acquisition. * How permanent capital supports patient ownership and long-term decision-making. * Why lower-middle-market deal activity has slowed as financing costs have increased. * How transparent communication and flexible deal structures can build seller trust. * Why operations may offer a stronger value-creation opportunity than pricing or M&A. * The importance of retaining, developing and incentivising key employees. Timestamps 00:00 Paul’s background and the launch of Isaac Management 01:27 A permanent-capital approach without a traditional PE fund 02:24 The biggest acquisition mistake: overleveraging 04:50 Deal trends across the lower middle market 06:46 The valuation gap between buyers and sellers 08:39 Tariffs, financing costs and portfolio-company pressure 11:05 Chief Outsiders 12:32 Building an investment firm without institutional backing 15:28 From the search-fund concept to permanent capital 16:56 Why long-term ownership resonates with business founders 19:48 Lessons from seller conversations and dealmaking 21:18 Equity rollovers, seller financing and deal preparation 23:08 The most effective lower-middle-market growth lever 25:03 Talent retention and the true cost of replacing employees 26:31 Employee ownership and long-term engagement 27:00 Paul’s recommended media and publications 27:58 How to contact Paul Isaac Raw Selection partners with Private Equity firms and their portfolio companies to secure exceptional executive talent. We focus on de-risking executive recruitment through meticulous search and selection processes, ensuring top-tier performance and long-term success. 🔗 Connect with Alex Rawlings on LinkedIn https://www.linkedin.com/in/alexrawlings/ [https://www.linkedin.com/in/alexrawlings/]🌐 Visit Raw Selection www.raw-selection.com [http://www.raw-selection.com/]

Building Value Through Carve-Outs, Operational Transformation and AI

In this episode of The Private Equity Podcast, Alex Rawlings speaks with Russ Roenick, Co-Founder and Managing Partner at Transom Capital, about building a differentiated middle-market investment strategy around carve-outs, special situations and operational complexity. Russ explains how launching Transom shortly before the global financial crisis shaped the firm’s highly hands-on approach. He outlines how Transom identifies businesses with strong underlying industry potential but significant operational challenges, then applies a disciplined value-creation model to improve performance. The discussion covers Transom’s six core operational transformations: salesforce effectiveness, new product innovation, digital transformation, supply-chain improvement, cost reduction, and talent and culture. Russ also shares how the firm structures its operations team, why former portfolio-company CEOs and CFOs can become highly effective operating partners, and how Transom is deploying AI across back-office and commercial functions. Key Takeaways * Why operational and situational complexity can create attractive entry points. * How Transom approaches carve-outs as an opportunity rather than simply additional risk. * The importance of building repeatable operational capabilities instead of attempting every possible transformation. * Why operating teams should be involved from underwriting through execution. * How supply-chain improvements have generated substantial gross-margin expansion. * Where AI is currently delivering value across accounts payable, receivables, customer service, forecasting and sales. * Why portfolio companies need internal AI champions to drive adoption. * How leaders can stay informed without overpowering portfolio-company management teams. Timestamps 00:00 Introduction to Russ Roenick and Transom Capital 00:30 Moving from McKinsey into Private Equity 01:26 Transom’s value-oriented investment strategy 01:55 Distressed investing versus operational value investing 03:16 Using operational and situational complexity 04:14 Carve-outs, lender situations and tail-end funds 05:14 Launching Transom during the global financial crisis 07:04 The importance of adapting while maintaining investment discipline 08:29 Why Transom specialised in carve-outs and special situations 10:58 Why many firms view carve-outs as excessive risk 12:54 Transom’s six operational transformation strategies 13:23 Salesforce transformation 14:17 New product innovation 14:45 Digital transformation and AI implementation 15:15 Supply-chain and gross-margin improvement 16:13 Cost reduction, talent and culture 17:37 Structuring the portfolio operations team 18:05 Recruiting former portfolio-company CEOs and CFOs 19:59 Transom’s approach to AI adoption 20:57 Applying AI across back-office functions 21:49 Creating internal AI champions 22:48 Common AI use cases across the portfolio 24:10 How Russ stays informed 25:31 Leadership, decision-making and knowing when to step back 25:57 How to contact Russ Raw Selection partners with Private Equity firms and their portfolio companies to secure exceptional executive talent. We focus on de-risking executive recruitment through meticulous search and selection processes, ensuring top-tier performance and long-term success. 🔗 Connect with Alex Rawlings on LinkedIn https://www.linkedin.com/in/alexrawlings/ [https://www.linkedin.com/in/alexrawlings/]🌐 Visit Raw Selection www.raw-selection.com [http://www.raw-selection.com/]

$465M Exit and how to get to the top 5% in US Buyouts

In this episode of The Private Equity Podcast, Alex Rawlings speaks with Daniel Pianko, Co-Founder of Achieve Partners, about Achieve’s talent-led investment strategy, its $465 million exit of Optimum, and how the firm reached top 5% performance for DPI in Cambridge Associates’ US buyout benchmark. Daniel shares how Achieve Partners invests in businesses where the biggest growth constraint is access to trained talent. Rather than simply competing for experienced hires, Achieve builds apprenticeship-style programmes inside portfolio companies, creating new talent pipelines that drive revenue, margin expansion, retention, and differentiated value creation. The conversation explores the relationship between private equity firms and operators, why data-driven decision-making matters, how Achieve partners with universities and underrepresented talent pools, and why doing good and generating alpha do not need to be in conflict. Key Takeaways: * Private equity firms should empower operators to challenge assumptions with data. * Achieve invests where talent shortages can be solved through focused training. * Apprenticeships can increase capacity, margins, retention and scalability. * Optimum shows how training pathways can unlock healthcare IT growth. * Strong impact and strong returns can reinforce each other. Timestamps: 00:03 – Introduction to Daniel Pianko and Achieve Partners 00:29 – Daniel’s career path and linking social impact with financial return 01:52 – The mistake PE firms and portfolio companies make in the boardroom 03:44 – How to avoid PE investors driving strategy without enough data 05:10 – Achieve’s unique strategy: investing where talent shortages constrain growth 06:38 – Building apprenticeship programmes to solve supply-demand talent gaps 07:08 – Daniel’s Goldman Sachs training experience and how it shaped Achieve’s model 08:25 – Rebuilding the talent pyramid in lower middle market companies 09:49 – Why Achieve focuses on business services, tech services, and healthcare services 11:12 – Building talent programmes at the portfolio company level 12:10 – Solving the gap between university education and first jobs 13:04 – Why companies should stop searching for “purple squirrels” 14:58 – Partnering with universities and building access to talent 16:44 – The Optimum exit: $465 million sale to Infosys 17:12 – Optimum’s healthcare IT thesis and value creation plan 19:00 – Building healthcare IT training pathways with universities and industry bodies 20:56 – Challenges in expanding Optimum beyond its historic core 22:24 – How Achieve reached top 5% DPI performance 22:50 – Why Achieve sells when the underwriting target is achieved 23:42 – How training programmes create a natural exit point 25:07 – Aligning impact with alpha creation 27:31 – Talent arbitrage, underrepresented communities, and overlooked graduates 29:40 – Why solving major social problems can create superior returns 30:08 – Daniel’s recommended podcasts, books, and shows 31:57 – How to contact Daniel Pianko 32:23 – Closing remarks Raw Selection partners with Private Equity firms and their portfolio companies to secure exceptional executive talent. We focus on de-risking executive recruitment through meticulous search and selection processes, ensuring top-tier performance and long-term success. 🔗 Connect with Alex Rawlings on LinkedIn https://www.linkedin.com/in/alexrawlings/ [https://www.linkedin.com/in/alexrawlings/]🌐 Visit Raw Selection www.raw-selection.com [http://www.raw-selection.com/]

From Warby Parker to Diapers.com: David Bell on Consumer Brand Success

In this episode of The Private Equity Podcast, Alex Rawlings speaks with David Bell, former Wharton Professor of Marketing and early-stage investor in consumer companies including Diapers.com, Warby Parker, Harry’s and Jet.com. David shares what he looks for in standout consumer brands, why founder insight and capital discipline matter, and how businesses can build emotional and symbolic value around everyday products. David explains why great consumer companies often begin with a simple frustration: what is wrong with the status quo? From buying diapers online to rethinking eyewear pricing, the best founders identify a clear customer problem, build a strong proposition, and execute with precision. He also discusses why overcapitalisation can damage consumer brands, using Allbirds and Casper as examples of businesses that grew quickly but struggled to sustain value. The conversation explores omnichannel distribution, brand storytelling, cultural relevance and genuine product innovation. David highlights Touchland, Warby Parker, Native, EOS, Hello and Happy, showing how founders can elevate mundane categories through design, positioning and customer experience. Key Takeaways: *  Great consumer investments often start with a visceral customer problem.  *  Capital efficiency is critical because consumer exits rarely match software-scale outcomes.  *  Strong brands combine functional, emotional and symbolic value.  *  D2C alone is rarely enough; winning brands need a measured omnichannel strategy.  *  The next wave of consumer winners needs real product innovation, not just better go-to-market.  *  Founder obsession with small details in design, scent, usability and narrative creates differentiation.  Timestamps:  00:03 – Introduction to David Bell and his journey from New Zealand to New York  01:00 – David’s background at Wharton and investing in consumer companies  01:28 – What attracted David to early winners like Diapers.com  02:19 – Why Diapers.com solved a fundamental customer pain point  03:15 – The importance of insight, execution and market size  03:44 – Lessons from Allbirds and the dangers of overcapitalisation  05:32 – How great consumer brands scale beyond the early stage  06:27 – The shift from pure D2C to omnichannel distribution  07:52 – Why strategic buyers value brands with retail traction  09:18 – Why some consumer brands fail to sustain momentum  10:11 – Touchland and the reinvention of hand sanitiser  11:33 – Cultural relevance, collaborations and emotional connection  12:03 – Sponsor message from Grata  12:32 – What makes a brand fundamentally strong  13:29 – Diapers.com and the power of descriptive branding  14:26 – Warby Parker’s storytelling, fairness and American heritage  15:49 – Building cognitive associations through brand activations  17:40 – How much brand success is intentional versus luck  18:09 – Opportunities in legacy consumer categories  19:24 – Why obsessive attention to detail matters  20:19 – Craig Dubitsky, EOS, Hello and elevating mundane products  21:15 – Happy Coffee and design-led differentiation  22:14 – Where the consumer industry is today  22:43 – Capital-efficient growth and the Native deodorant example  23:39 – Why real product innovation now matters more than ever  24:36 – What David reads, watches and listens to  25:04 – Identifying white spaces in health, wellness and longevity  26:30 – Consumer opportunities through cultural arbitrage  27:27 – Lessons from Coca-Cola’s global distribution and brand power  28:24 – How to connect with David Bell  28:52 – Closing remarks Raw Selection partners with Private Equity firms and their portfolio companies to secure exceptional executive talent. We focus on de-risking executive recruitment through meticulous search and selection processes, ensuring top-tier performance and long-term success. 🔗 Connect with Alex Rawlings on LinkedIn https://www.linkedin.com/in/alexrawlings/ [https://www.linkedin.com/in/alexrawlings/] 🌐 Visit Raw Selection www.raw-selection.com [http://www.raw-selection.com]

Are law firms ripe for Private Equity investment

In this episode, Alex Rawlings speaks with Adil Taha, a private equity operator specialising in the UK legal sector. They explore why private equity has struggled to scale law firms, the challenges of buy-and-build strategies, and why many legal businesses are weaker than they appear financially. Adil shares lessons from rescuing and rebuilding Child & Child, explains why consumer legal services are attracting the most PE interest, and discusses how law firms differ from other professional services businesses. The conversation also covers the impact of AI, rising salary costs, partnership structures, and why the US legal market may offer bigger opportunities for investors. Topics Covered *  PE investment trends in legal services  *  The Child & Child turnaround  *  Why law firms are difficult to scale  *  Problems with traditional partnership models  *  Why buy-and-build strategies are struggling  *  Consumer legal services vs full-service firms  *  The role of AI and rising costs in legal  *  Why the US market is attracting PE attention  Timestamp Highlights * 00:00 – Introduction to Adil Taha  * 02:29 – Child & Child acquisition and turnaround  * 09:11 – Where PE is investing in legal  * 14:55 – The hidden weaknesses in law firms  * 26:51 – Why professional services are hard to scale  * 35:23 – Investment strategies that may work in legal  * 45:05 – Why PE is looking toward the US market  Raw Selection partners with Private Equity firms and their portfolio companies to secure exceptional executive talent. We focus on de-risking executive recruitment through meticulous search and selection processes, ensuring top-tier performance and long-term success. 🔗 Connect with Alex Rawlings on LinkedIn https://www.linkedin.com/in/alexrawlings/ [https://www.linkedin.com/in/alexrawlings/] 🌐 Visit Raw Selection www.raw-selection.com [http://www.raw-selection.com]