Bay Hills Capital focuses exclusively on the small to lower middle market buyout segment of private equity through fund investments, direct investments and secondary investments. We believe that the best potential for outsized returns in private equity will continue to be generated by buyout managers with relatively small pools of capital, deep sector knowledge and operational expertise. Bay Hills Capital believes that experienced fund managers in this segment will continue to outperform private equity indices because of their sector expertise and focus and the relative inefficiencies in their market.

Smaller buyout funds focus on a much larger universe of potential investment opportunities that have historically been less efficient with fewer intermediaries. Unlike other segments of private equity, the investment strategy of our targeted fund manager is highly repeatable and not driven by technology innovation or credit cycles. These managers seek to acquire quality businesses, deploy modest amounts of leverage, improve operations, generate growth and exit at enhanced earnings multiples.

Executing an investment strategy in this segment of private equity requires significant time and resources and is often outside the reach of many institutional investors. Bay Hills Capital is backed by a group of prominent institutions and family offices that recognize the need for a highly focused partner to identify and gain access to the most promising managers in this segment. Our strategy enables our limited partners to participate in an otherwise difficult-to-access segment of the private equity market.

 

Fund Investing

Bay Hills Capital is backed by a group of prominent institutions and family offices looking to build long-term relationships with outstanding fund managers. We provide our investors a diversified portfolio of experienced small and lower middle market buyout managers through a fund-of-funds vehicle. Bay Hills Capital is targeting fund sizes typically ranging from $100 million to $1 billion, depending upon investment scope and strategy. Each Bay Hills Capital vehicle will make investments in a select group of top-performing fund managers. This limited number of investments enables Bay Hills Capital to be extremely selective while seeking the highest level of absolute returns. The Fund will diversify its investments by industry focus, fund size, investment strategy, geography, and vintage.

 

Emerging Managers

In addition to our core fund-of-funds, Bay Hills Capital is working to identify newer, emerging firms that have the potential to generate outsized returns. In addition to seeking strong return potential, Bay Hills Capital is looking to establish relationships early with up and coming fund managers. We view Emerging Managers as “proven investors in a new platform”. Often times, this profile includes spinouts of larger firms, experienced investors and operators working together for the first time or newer firms that have raised fewer than two institutional funds. This mandate is backed by a large state pension system that is seeking to develop long-term relationships that have the potential to grow into a larger investment relationship in subsequent funds.

 

Direct Investing

Bay Hills Capital actively seeks attractive direct investment opportunities in partnership with exceptional management teams. These direct investments are commonly sourced through the team’s extensive relationships with fund managers, industry executives and intermediaries. Bay Hills Capital has extensive direct investment experience and works closely with management teams and fund sponsors to create value. Bay Hills Capital typically seeks to partner in these investments with existing or new fund managers with relevant sector expertise.

 

Secondary Investments

In addition to Bay Hills Capital's primary investment strategy, we actively acquire secondary investments in small buyout funds. We have extensive expertise in evaluating and executing secondary investments and view the strategy as a complement to our overall strategy and an efficient manner to deploy capital while reducing overall risk. Our secondary strategy is an important component of our overall strategy of backing experienced managers focused on small buyout opportunities.