Helping to quarterback the fund deployment at the buyout firm
Before joining Huntsman Gay, Young was a co-founder and managing director of Sorenson Capital, a $250 million private equity fund that focused on lower to middle market leveraged buyouts in the Western United States.
Huntsman Gay, which closed a $1.25 billion fund earlier this year, pursues a generalist strategy through buyouts, growth equity investments and investments in mid-cap public companies, according to its website. Young talked recently with PE Week contributor Erin Griffith.
Q: How is the firm approaching the current market?
We’re busier now than we were a year ago. Right now, M&A is more event-driven, with business owners still out there wanting to diversify risk, and take chips off the table. It seems sellers expectations are finally beginning to moderate on price a bit.
Q: Since forming in November 2007, Huntsman Gay has done one deal, the acquisition last year of Turner Bros. Holdings, an industrial and energy services provider. How many deals have you looked at and passed on?
A: We’ve seen quite a few deals, of course. We have a number of deals in the pipeline. There are three or four that could be closed in the next quarter.
Q: What does that pace say about the quality of deal flow?
Sellers in the market are sophisticated people. Everyone was a little frozen in the market for some time. The public markets seemed to moderate on pricing a little more efficiently, and now the private markets are starting to do that. The sellers are considering more realistic prices, and that allows us all to start buying companies. Prices in the private market will fluctuate within a bandwidth that’s smaller and smaller. It’s part of a new reality.
Q: Are your LPs antsy to see another deal or are they telling you they’d rather you not call any capital?
We have seven very large LPs that make up our $1 billion fund. They committed to us in one of the most challenging times in private equity, and most people in the market believe funds raised in this time will be strong performers. Our LPs have been patient and supportive so far, and we’re in direct communication with them.
Q: What are the differences between Huntsman Gay and Sorenson Capital?
I’m doing the same role in both. Huntsman Gay is a larger fund with larger group of founding partners. We have a more global approach as we position ourselves. At Sorenson, I was focused mainly on the West Coast.