If you’re interested in co-investing with a stable, consistent lower mid-market shop based outside of New York you may want to add Mark Jones, partner at
For a small firm based in Tennesse, River Associates gets around, having invested in companies based in 20 states and Canada across a variety of industries, including manufacturing, distribution, industrial services and retail. The firm is also up for partnering with other buyout firms or fundless sponsors. “I have always followed two key rules,” Jones said. “One, you never know where your next deal is going to come from. Two, it is a long race and a small world so treat everyone with the same level of responsiveness, professionalism and respect.”
Jones spends much of his time on the road, where he focuses on finding new deals and new limited partners. He serves on the association for Corporate Growth’s global board of directors, and he previously served as chairman of the 2006 Atlanta ACG Capital Connection and chairman of the ACG Intergrowth 2008 conference. Jones could also be a good contact for senior and mezzanine lenders looking to partner with a sponsor firm that uses moderate leverage. River Associates typically funds its deals with 40 percent to 45 percent equity, Jones said.
The firm is investing from its fifth fund, a $110 million vehicle, and is gearing up to raise its sixth, for which it will seek to raise $175 million to $200 million. Unlike many firms that seek significantly larger targets as they mature, the Chattanooga, Tenn.-based shop has continued to concentrate on companies generating $2 million to $20 million of EBITDA over its 21-year history. Only one partner has ever left the firm, whose executives contributed about 10 percent of the capital in
River Associates has completed about 30 platform investments and 30 add-ons during its history, which has translated to a pace of completing only a few platform investments per year. The idea is to give portfolio company management teams extensive attention, much as teachers do in small classrooms. Among the firm’s stable of realized investments, earnings of its portfolio companies have grown by a combined 63 percent through organic growth and add-on acquisitions, according to Jones. “To our LPs, I think this is an example of where less can be more,” he said.