Finding value in lower middle market private equity

Nitin Gupta of Flexstone Partners discusses the benefits of focusing on the smaller companies in the global private equity markets.

Providing Opportunities, Adding Value
Nitin Gupta, Managing Partner at Flexstone, says the firm takes a different approach to the private investment space. “Our core expertise is providing focus on the lower and middle market segment globally. Access to primary capital, primary funds, co-investments, and secondaries,” he says. “We believe the lower and middle market is more attractive in terms of valuations – and it’s where we see various avenues for us to really add value.” For Gupta, these value-adds can include add-on acquisitions, as well as operations and management team enhancements.

Focused on Diversification and Sustainability
Flexstone’s focus on building a portfolio that can have long-term sustainability across all market segments translates in part to careful consideration of diversification. “In terms of portfolio construction, we believe it’s all about diversification,” remarks Gupta, “in terms of vintage, geography, managers, and consideration of how companies and funds might perform in down markets.” Acting as a responsible investor is also an important component of Flexstone’s approach. “Whether directly, or through funds, we look to invest in well-managed, ethically responsible companies that are sensitive to ESG criteria. That includes things like minimal negative environmental impact and adherence to fair labor practices.”

Global Reach, Local Touch
According to Gupta, one of Flexstone’s key value-adds for clients is its ability to consider markets and opportunities from a global and regional perspective simultaneously. “We’re a global firm, but we source on a local basis. We have teams in Asia, Europe, and the US – each with a strong pipeline of opportunities and a strong network of placement agents. For us, it’s about mapping out the entire private equity landscape and looking at new ideas that are coming to market. If you’re a long-term investor, you can find pockets of opportunities; you just have to be selective.”

A Client-Centered Approach
At the core of Flexstone’s methodology lies a unique focus on close collaboration with clients and their unique needs. “We know that no two clients are the same and that one size doesn’t fit all. That’s why we’re focused on an active approach to private investing, one that’s high-touch and responsive to distinctive objectives and goals.” Whether it’s risk management, asset underwriting, or accounting, the Flexstone team serves as a ready and willing business partner for its clients worldwide.
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Published in March 2019

Flexstone Partners
An affiliate of Natixis Investment Managers

Flexstone Partners, SAS – Paris
Investment management company regulated by the Autorité des Marchés Financiers. It is a simplified stock corporation under French law with a share capital of 1,000,000 euros Under n° GP-07000028 –Trade register n°494 738 750 (RCS Paris)
5/7, rue Monttessuy,
75007 Paris
www.flexstonepartners.com

Flexstone Partners, SàRL – Geneva
Independent (unregulated) asset manager, under Swiss Federal Act on Collective Investment Schemes (“CISA”), supervised by Commission de haute surveillance de la prévoyance professionnelle (“CHS PP” and regulated by the Swiss Financial Market Supervisory Authority (“FINMA”) under Anti Money Laundering requirements. It is a limited liability company with a share capital of 750 000 CHF.
Trade register n° CH-660-0180005-1
8 chemin de Blandonnet
Vernier 1214 Geneva
Switzerland

Flexstone Partners, LLC - New York
Delaware corporation, registered with the United States Securities and Exchange Commission as an investment adviser
28th floor of 745 Fifth Avenue, New York, NY 10151.

Flexstone Partners, PTE Ltd - Singapore
61 Robinson Road, #08-01A Robinson Centre
Singapore 068893

Natixis Investment Managers
RCS Paris 453 952 681
Share Capital: €178 251 690
43 avenue Pierre Mendès France
75013 Paris
www.im.natixis.com

This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material.

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