Compass Group Equity Partners invests in many sectors but sees a lot of growth potential in the alternative energy industry, particularly in solar, according to Founder and Vice President Russell Williams.
“We believe that solar is here to stay,” Williams told Active LPs. “Over the last 10-15 years, there has been substantial tax credits that have been devoted toward helping the industry get a footing, helping the technology improve to a point where it can be more efficient and, at the same time, more cost-effective.”
Williams, who previously served as director of international business operations at Aegion Corporation, said he and Managing Partner John Huhn founded the firm in 2014 because they didn’t want to be removed from the constraints of a traditional private equity fund, choosing to employ a “thesis-driven” investment strategy.
“We are driving into [areas] of the economy that we believe [are] going to be the most relevant for our future,” Williams said. “Both from a growth perspective, a profitability perspective, from a societal perspective and also a cultural perspective.”
In addition to alternative energy, the St. Louis-based independent sponsor also invests in transportation and infrastructure; engineered products and materials; functional food ingredients; manufacturing automation; and healthcare.
The company targets lower middle-market companies with Ebitda between $2 million-$10 million and revenue between $10 million-$100 million.
“We are looking for companies that build products and that offer services that make existing industries more efficient,” Williams said. “Oftentimes, we find ourselves looking at mature industries that are going through a disruption, whether it be through technology or another business model that’s quickly taking a hold within that industry.”
Compass Group Equity Partners has seven companies in its portfolio: QGistix, which provides refurbished low-voltage electronics catered toward the security, home automation and solar industries; Manufactured Assemblies Corporation, which creates cable assemblies and wire harnesses; Logic PD, an electronics development, manufacturing service company; EPIC Systems, focused on automation solutions; CareVet, which focuses on veterinary care; electronic manufacturing company Protech Global Solutions; and The Allied Group, which provides services to healthcare and life science companies.