Barry Ritholtz interviews Michael Fisch, CEO and co-founder of American Securities LLC. They discuss the secret to growing a successful private equity firm, impact of interest rates on cash flow, refinancing strategies, survivorship bias, investing in stable industrial businesses, and the growth and evolution of the private equity industry.
American Securities focuses on investing in market-leading companies with strong market share and growth potential.
American Securities prioritizes working closely with existing management teams, supporting them to improve operations and drive growth.
American Securities aims to create value in companies by providing resources, expertise, and capital despite a decrease in deal volume, as prices for quality companies remain strong in the market.
Deep dives
Investing in Market Leading Companies
American Securities focuses on investing in market leading companies with strong market share and growth potential.
Partnership with Management
American Securities prioritizes working closely with existing management teams, supporting them to improve operations and drive growth.
Value Creation and Exit Strategy
American Securities aims to create value in companies by providing resources, expertise, and capital. Despite a decrease in deal volume, prices for quality companies remain strong in the market.
Investment Strategy and Acquisitions
American Securities focuses on acquiring smaller competitors and merging them into their existing platform, often making add-on acquisitions. They prioritize investing in companies where founder CEOs continue to be the CEO and have a significant personal investment in the company. The capital structure of their investments typically involves providing operating capital, undrawn lines of credit, and liquidity to run and grow the business.
Industrial Sector Focus
American Securities has a strong focus on the industrial sector. They prioritize market-leading companies with sustainable competitive advantages and stable growth in industries that are growing at or above average GDP rates. They also emphasize backing existing management teams, particularly if the CEO is willing to be their partner. Their due diligence process involves understanding the manufacturing process, suppliers, and customers to assess stability and potential for growth.
Bloomberg Radio host Barry Ritholtz speaks to Michael Fisch, CEO and co-founder of American Securities LLC. He is a managing member of the general partners of the American Securities Partners' series of private equity funds and a member of the investment committee of AS Birch Grove. He was previously a partner in two private equity funds, a consultant in the Paris office of Bain & Co., and worked in the mergers and acquisitions department of Goldman Sachs.