Every month, we will feature an active member of the ACG New York community in a brief interview. Reflecting industry insight and personal perspective, this feature will introduce industry leaders and offer advice on the tools you need to succeed in the ever-changing middle market.
1. Quick basics– role/firm/focus/how long have you been an ACG member?
I am the Co-founder and Managing Director of TresVista – we’re the leading outsourced service providers for the asset management and advisory industry. We started our journey back in 2006, and today we are a team of ~500 professionals. Our clients range from one-man shops to some of the largest financial services firms globally, and collectively manage over $2 trillion. I joined ACG New York as a member in 2014. Along the way our firm became a sponsor and most recently, I had the privilege of being appointed to the Board of Directors. ACG events allow us to connect with several of our existing clients in one place. Through our sponsorship and board presence, we can promote an organization that benefits our clients, as well as providing input into the types of events and activities that would be appreciated by the middle market community.
2. How has ACG helped you in your career?
ACG’s greatest value to me individually and TresVista as an organization, is the networking. ACG events have a high density of decision makers in one place at one time. The visibility and access that ACG has given us to the middle market cannot be replicated elsewhere.
3. Can you tell us about your greatest success story/ proudest achievement?
The key to our success as a high value-add outsourcing partner is the talent of our team. In order to recruit, develop and retain the best, we started very much with a focus on being a desired place to work. 50% of our senior management has been promoted internally over years, while another 30% started their careers with us, left to explore other opportunities, and returned to us. That really validates us as an organization – as a place that is competitive and desirable to work at. And that is what we set out to do with TresVista, to build a great company to work for. When people have that choice and choose us, I count that among the proudest achievements of my journey.
4. What do you think are the biggest obstacles in the middle market today?
The biggest obstacle I see in middle market PE is being able to do more without more resources. A PE firm has to see more deals than ever before for each deal that actually gets one. Deeper diligence has to be conducted to justify higher valuations. More effort is expended on the portfolio company in order to add value. I think the key area of differentiation for PE firms in the eyes of LPs will be how they are able add more value to the portfolio company – to be able to improve EBITDA more so than any other PE firm in order to create alpha. Investment in software and operating partners is no longer enough. I think one aspect of the evolution that people are going to have to embrace is data analytics and understanding what it can do. There is an increased focus in terms of converting the data that companies capture into intelligence. While the largest PE firms may be able to develop these capabilities in-house, middle market firms are going to have to look to outsourced solutions. At TresVista, we have the Data Intelligence Group engaging our private equity clients to create value at the level of the portfolio company.
5. What changes do you foresee happening in the middle market in the next 3-5 years?
Over the last ten years we’ve come to see businesses staying private for longer. They can access institutional capital earlier on in their life-cycle, graduating from one level of private equity to another. I think we’ll see the capital available for private equity continuing to increase, and so we’ll see more stratification within middle market private equity, and more PE to PE deals happening as a result.
I also think the role of the operating partner is going to become more prevalent, in that they’re going to be increasingly more involved in the diligence phase and not just the post-acquisition phase. Value-creation strategies might extend the J-curve, necessitating longer investment cycles, facilitated by longer-dated funds or by a more robust secondaries market – enabling LPs to create liquidity before an actual exit, or GPs to hold their investments for longer while providing liquidity for LPs that need it.