Drew Brantley, Managing DirectorFrisch Capital Partners (FCP) works exclusively with independent sponsors, helping them raise equity and debt through a network of capital providers in the market. Rather than having sponsors rely on a single capital source, FCP seeks multiple potential capital providers, giving Independent Sponsors alternatives before they need them.
“Our goal when we take on a deal is to be very selective about which deals and which Independent Sponsors we work with,” says Drew Brantley, managing director. “Our goal is to provide our clients with choice.”
Multiple proposals give sponsors a choice of capital partners and terms, while FCP negotiates on their behalf to improve economics. If a capital provider passes or walks away, alternative proposals can keep the transaction moving.
FCP reviews roughly 250 opportunities at the top of its funnel but works on only 6-10 deals annually, selecting those with strong potential to attract multiple proposals.
Managing the capital raise also frees sponsors to focus on due diligence, managing the seller, acquisition pipelines and portfolio-company responsibilities. FCP manages the process while maintaining the integrity of capital relationships of both the Independent Sponsor and FCP.
Backing Sponsors with Relevant Expertise
Capital providers want more than an attractive acquisition opportunity. They want to understand why a particular Independent Sponsor is equipped to own, operate and grow the business. FCP looks for sponsors who are intentional rather than simply opportunistic, targeting businesses that align with their industry or operating expertise and can articulate plans for creating value after closing.
A sponsor with 20 years of healthcare experience targeting healthcare businesses, for example, can demonstrate relevant knowledge that strengthens the investment case. Operational expertise can carry similar value when sponsors have experience building operating systems, technology stacks or sales teams across companies. Capital providers also look for sponsors who can explain a business's key drivers, distinguish a good business from a great one and show how their thesis can create that improvement.
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Our goal when we take on a deal is to be very selective about which deals and which Independent Sponsors we work with. Our goal is to provide our clients with choice.
An independent sponsor’s ability to bring a meaningful equity check, including through friends and family capital, is important because it creates greater alignment with capital providers and investors. FCP co-invests in its transactions, putting its own capital alongside its clients and other capital providers.
A Network Built for the Independent Sponsor Market
For three decades, FCP has worked exclusively with the independent sponsors market, building a deep network of capital providers that invest in and lend to these transactions. It also acts as a transaction 'sherpa,' helping sponsors navigate the nuances of doing a deal as an Independent Sponsor, interpret interactions with capital providers and work through issues along the way. FCP has raised more than $150 million yearto-date in closed Independent Sponsor transactions, with roughly half involving repeat clients.
Looking ahead, FCP plans to deepen its role within the independent sponsor community. FCP helped form and hosts The Earnout Independent Sponsors Symposium, held twice a year, which brings sponsors and capital providers together for meetings and networking.
For Frisch, that means supporting a market where success is measured over years rather than transactions. As the firm puts it, independent sponsors are often 'five- to ten-year overnight' successes, built through discipline, hard work and a sustained commitment to executing the thesis.
