Strategy

Bay Hills Capital is dedicated exclusively to the small to lower middle market buyout segment of private equity in North America. We believe this sub-asset class consistently offers the best risk-adjusted returns in private equity. Top-performing small and lower middle market fund managers with smaller pools of capital, deep sector knowledge, and operational expertise have consistently out-performed all other segments of private equity and venture capital. Bay Hills Capital’s sole focus is to proactively identify and invest with these select managers.

Lower middle market buyout firms invest in a large and inefficient universe of small companies. Experienced and disciplined fund managers can typically acquire these companies at lower purchase multiples compared to larger enterprises. This market segment also offers small buyout funds greater opportunities to effect operational improvements and create enduring equity value with their portfolio companies. Bay Hills Capital believes that these fundamental market attributes will enable top-performing small buyout managers to continue to generate superior investment returns compared to larger funds.

Manager selection in this segment of private equity requires extensive experience, deep relationships, and significant time and resources. The industry is characterized by a large and growing number of small buyout funds, and it is challenging to cultivate close relationships with the most sought-after managers. Our investors choose to partner with us because they recognize Bay Hills Capital’s specialization and commitment to small buyouts enables us to more effectively identify and evaluate fund investments and build deeper relationships with the best-in-class managers in our industry.

Bay Hills Capital employs a highly disciplined investment strategy that is based on our significant experience investing and working in this industry niche. Across our fund-of-funds and separate account vehicles, we build focused portfolios that maximize the opportunity to capture the performance premium available in the small to lower middle market buyout sector while maintaining the benefits of diversification across vintage years, geography, industry focus, fund size, and investment strategy.