E285: The Lower Middle Market: Where Private Equity Still Generates Alpha

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Jan 19, 2026

Jeff Schwartz, the Founder and Managing Partner of Corbel Capital Partners, discusses his journey in the lower middle market. He highlights the market gap left by banks, which paved the way for structured capital solutions. Jeff also delves into the challenges of growing an investment firm and the significance of SBIC leverage in enhancing returns. He emphasizes the increasing appeal of special situations investing and shares insights on aligning team incentives to drive success in a competitive landscape.

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ANECDOTE

Founder’s Aha From A Small-Business Conversation

Jeff Schwartz started Corbel after a small-business owner said they'd welcome an investor like him but wouldn't sell to private equity.
That conversation revealed a gap for structured capital to support owner liquidity without full buyouts.

INSIGHT

Banks Vacated A Financing Niche

Traditional banks pulled back from the lower middle market, creating a financing void.
Structured capital can fill that gap by offering tailored liquidity and private-equity support.

ADVICE

Plan For Management As Much As Investing

Expect to spend as much time managing the firm as doing deals once you scale.
Build management capabilities early because running a firm requires significant operational work.

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What does it take to build an investment firm outside the traditional private equity model? David Weisburd speaks with Jeff Schwartz about founding Corbel Capital Partners, identifying opportunities in the lower middle market, and why structured capital fills a gap left by banks and large buyout firms. Jeff discusses the operational realities of scaling an investment platform, fundraising challenges, and how market inefficiencies continue to shape strategy selection.

Highlights:

The market gap that led Jeff to launch Corbel Capital Partners
Why traditional banks retreated from lower middle market lending
The difference between growing a firm horizontally versus vertically
How managing an investment firm differs from being an investor
Fundraising challenges for emerging and mid-sized managers
Using multiple strategies without outgrowing a core market focus
The role of SBIC leverage in enhancing return profiles
Why special situations investing is increasingly attractive
Aligning incentives across teams and strategies

Guest Bio:

Jeff Schwartz is the Founder and Managing Partner of Corbel Capital Partners, a private investment firm focused on structured capital solutions for lower middle market businesses. He is a senior private equity investment professional with extensive experience raising capital and executing leveraged buyouts, distressed debt-for-control investments, and structured equity transactions across multiple industries, with a focus on consumer products and retail, specialty manufacturing, and business services. Prior to founding Corbel in 2014, Jeff held senior roles at Ares Management.

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Sponsor:

AlphaSense is the AI-powered market intelligence platform trusted by 85% of the S&P 100, helping investment professionals make faster, more confident, data-driven decisions. Built for hedge funds, asset allocators, private venture capital firms, and investment bankers, AlphaSense uses advanced AI and powerful search across premium proprietary content to surface the insights that matter most—before the market moves. Elevate your research and stay ahead of the competition. Visit https://www.alpha-sense.com/howiinvest/ to learn more.

Stay Connected with David Weisburd:

X/Twitter: @dweisburd LinkedIn: https://www.linkedin.com/in/dweisburd/ Weisburd Capital: https://www.weisburdcapital.com/

Stay Connected with Jeff Schwartz:

LinkedIn:https://www.linkedin.com/in/jeff-schwartz-corbel-capital

Questions or topics you want us to discuss on How I Invest? Email us at david@weisburdcapital.com.

Disclaimer:

This podcast is for informational purposes only and does not constitute investment, financial, legal, or tax advice. Nothing in this episode should be interpreted as an offer to buy or sell any securities or to participate in any investment strategy. All opinions expressed by the host and guests are their own and do not represent the views of Weisburd Capital. Participants may hold positions or have financial interests in the companies, funds, or investments discussed. Any references to specific investments are for illustrative purposes only. Investing involves risk, including the potential loss of capital. Past performance is not indicative of future results, and any forward-looking statements are subject to risks and uncertainties. Any third-party data or opinions have not been independently verified. Listeners should conduct their own research and consult their own advisors before making any investment decisions.

(0:00) Introduction (1:30) Building a new investment firm and Transition from player to manager (7:11) Building investor base and Scaling the team (11:34) Recruiting, retention, and Leveraging SBIC capital (18:46) Current market interests and Special situations competency (23:26) Insights from Ares to Corbel and Building relationships in distressed markets (25:39) Delivering capital on a timely basis and Accelerating success (27:43) Closing remarks