Micro-cap private equity firm

Expertly-targeted research and communications plan drives PE firm to exceed goals for fundraising, pipeline building, and capital deployment.

$50M

exceeding fund manager’s fundraising goal of $25M

125%

increase in the prospective investor pipeline

18 mo

the five-year target for capital allocation was achieved

Opportunity

A private equity firm investing in micro-cap companies based in the western US typically focuses on a specific niche and was approached with opportunities outside their area. The fund manager needed:

  • a confidential investor memo to catalyze conversations with prospective limited partners in their current area of expertise, including a thorough market landscape analysis that sophisticated investors expect
  • diligence (understanding the landscape, the players, the customer experience, and the key risks for the industry / type of business) on a prospective portfolio company expressing interest in being acquired outside the the fund manager’s industry of expertise

Constraint

Time was the fund manager’s most precious resource while being actively involved with companies the fund owned. Although the manager considered performing the confidential investor memo and acquisition due diligence internally, they knew with the time commitments and need for expertise in building out presentations and due diligence was worth seeking external partnership

Response

Deliverables spanned four weeks each and included:

  • confidential investment memorandum within the fund’s area and Artemis working collaboratively with the fund manager to build a memo worthy of presentation in conversations with potential LPs
  • due diligence of understanding the landscape, players, customer experience, and key risks for the type of business of a portfolio company looking to be acquired while meeting directly with the fund manager and portfolio company to facilitate a collaborative due diligence process

Impact

The memo led to a spectacular return: a 125% increase in the prospective investor pipeline and a final raise of $50M, exceeding the manager’s fundraising goal of $25M. In turn, the fund manager reached their five-year goal for capital deployment in 18 months. Moreover, while Artemis recommended that the fund not invest in the potential target that was outside their focus area, the new funding that resulted from Artemis’s memo enabled the firm to acquire several high-quality companies.

In addition to being a significant stress reliever, Artemis provided the manager with the strategic guidance to quickly assess a new market and its attendant risks, as well as the materials to engage with the right investors for the fund.

The manager continues to use Artemis for project-based and strategic planning for both the private equity firm and the affiliated holding company.

Artemis acts with the entrepreneurial spirit and can-do attitude of a small business. They’re responsive, thoughtful, cost-effective, and deliver excellent results. Using an outside consultant can be scary because no one cares as much as you do, but they have delivered beyond my expectation and I think they’re worth the investment.

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