Giovanni Amodeo, the host of the ION Influencers’ Fireside Chats, sat down with Simon Moore, Founder of Colinton Capital Partners, to discuss the intricacies of identifying trends in the low and mid-market in Australia. Here’s a summary of their conversation:

Key Takeaways:

• Lower Middle Market Definition: Moore defines the lower middle market as companies with equity cheques between $20 million to $50 million for control transactions, with enterprise values between $50 million to $150 million.
• Industry Specialization: Moore believes that industry specialization is crucial, and Colinton Capital Partners focuses on industries they know well, such as industrial services.
• Intermediaries: Moore thinks that intermediaries will continue to play a significant role in the private equity industry, particularly in the lower middle market.
• Technology and Research: Moore sees technology as a tool to enhance research capabilities, but human relationships and industry experts are still essential in deal sourcing and execution.
• Private Equity Firm Evolution: Moore predicts that private equity firms will become more specialized, with a greater emphasis on operational partners and strategic advisory roles.
• Investor Expectations: International investors prioritize continuity, alignment, and communication with private equity firms, particularly in the lower middle market.
• Sector Bets: Moore bets on industrial services as a growth sector in Australia over the next three to five years.
• Exit Market: Moore believes the exit market looks promising for companies with EBITDA of $40-50 million, with private equity firms and strategic players competing for deals.
• University Recommendation: Moore recommends studying commerce and law to equip students with essential skills for a career in private equity.

Key timestamps:

00:09: Introduction
00:34: Background and Experience
02:22: Evolution of Private Equity in Australia
04:19: Defining the Lower Middle Market
04:57: Choosing the Lower Middle Market
07:20: International Perspective
08:51: Competitive Landscape
09:11: Unique Opportunities
10:47: Role of Intermediaries
13:19: Impact of Technology
15:53: Industry Specialization
18:02: Future of Private Equity Firms
23:39: Communication and Continuity
24:39: Platform Deals and Buy-and-Build Strategy
25:24: Exit Market and Business Sale
26:19: Competitive Landscape in Business Sales
27:11: Strategic Players in Business Sales
28:58: Educational Recommendations