Tell the ISCP Club a little about yourself and your firm:
Founded in 2001, Tuckerman Capital was a pioneer in investing in support of independent sponsor partners, and remains today exclusively focused on this strategy of backing value-added independent sponsors and executives to invest in and build exceptional smaller businesses. Our target investments are typically buyouts or recapitalizations of founder and/or family owned businesses with cash flows below $20M (and most typically below $10M). We target investments in highly differentiated business with strong cash generation profiles and are generally drawn to areas of the economy that are supported by meaningful secular and thematic tailwinds. We invest in these situations as equity oriented investors, but with an eye toward managing capital structure risk to widen the probability of success.
I joined Tuckerman’s founders over a decade ago, and have led the day to day investment activities of the firm and our growing team for the last 4 years. We’ve invested over the last 20 years through 6 discretionary funds on behalf of a very concentrated set of long term focused limited partner institutions and families.
What projects are you currently working on?
We have been very pleased and thankful with the work of our management teams over the last couple years to continue building through the pandemic, the result of which has been stronger and more resilient companies.
Investments we’ve made and continue to build in the last few years include great businesses in wildfire mitigation and environmental consulting. Both are examples of spaces where we have been able to generate proprietary investment opportunities via exceptional partners focused in these niches.
New initiatives we are working on currently include seeding a strategy to pursue the broad set of opportunities related to industrial sustainability as well as continuing the build on our track record of success with investments related to infrastructure maintenance and repair. Each of these represent broadly defined areas which we believe hold a number of very attractive, profitable and durable niches across sectors including the built environment, transportation, and food and other resource value chains, where we can find and build market leading smaller businesses.
We are very actively pursuing new opportunities and partnerships for our sixth fund and continue to be excited about the extraordinary talent that is flowing into the independent sponsor universe. We feel like we meet new independent sponsor and executive partners every week who we are excited to partner with.
What types of deals are you currently looking for?
We are looking for the same things we always have: highly cash generative businesses with outlier profit margins driven by truly differentiated product/service offerings; businesses participating in markets that are driven by long term, secular growth trends; great value-added talent (both independent sponsors and executives) with whom we can be very aligned with building attractive long term investment outcomes while managing risk. We love a good inefficiently shopped or proprietary acquisition engagements and as an equity-focused investor are able to provide all the junior capital necessary to close an investment.
Who is your ideal investment partner?
One with a great deal in their hand! Just kidding again (sort of). There are a lot, an increasing number, of great independent sponsor partners out there in this community. The growth of the community if perhaps its most impressive feature. For twenty years we have worked hard to be good partners and build a leading reputation for partnership. I think on both sides of these investment partnerships, the most important characteristics are awareness and intellectual honesty around both the risks of an investment as well as the opportunities and what advantages and resources are being brought to the deal to add-value and create a great outcome for all involved. A big part of that includes a willingness to “Partner” (with a capital “P”) together to build resilient, market leading, and extraordinary companies that will both grow and generate significant interest from future potential owners. These attributes are much more important to us than a certain specific skill, capability, type of expertise, or background.
