A balanced approach
Riverside Partners: Best Mid-Cap Buyout Manager (Fund Size <USD3bn) – For over thirty years, Riverside Partners has focused on creating returns for its investors through partnering with founders and management teams to invest in differentiated, growing healthcare and technology companies. Based in Boston, the firm is managed by five General Partners including David Belluck, Steve Kaplan, David Del Papa, Max Osofsky and Craig Stern.
Riverside’s approach comprises three elements:
Partnering with Founders and Management Teams
In each investment, Riverside starts by listening to the objectives of the founder and management team and building a trusted relationship with them. “While valuation is always important, the founders and management teams we team up with care about a wide range of objectives, including having significant equity going forward and continuing a meaningful role in the company, as well as maintaining the culture and values of their firm,” comments David Belluck. “We strive to embody these values and customise our approach to meet all of their objectives.”
Sector focus on healthcare and technology
Riverside Partners is a sector specialist. This helps in all aspects of the investment process, from sourcing, diligence, forming relationships with management teams to business building. “Healthcare and technology are large growing sectors of our economy, and companies in this space have an opportunity to positively impact society, which goes hand in hand with achieving success and financial returns,” states Belluck. “In addition to our investment team, we have more than 35 operating executives and operating advisors who add deep domain expertise to help us evaluate and grow the companies we invest in.”
Business building and value creation
Ultimately, the returns PE firms create for their investors are driven by what they do post closing. With each company, Riverside starts with a genuine respect for what is working well. At the same time, the companies it invests in are small businesses, which means they are often incomplete in some way, or have a function that can be added or improved.
“We balance genuine respect for the culture and what is working well, while we collaborate with the management team to transform the business,” explains Belluck. “This often includes adding a manager or two to the team; professionalising reporting and metrics; improving execution in a particular area, and accelerating growth organically through adding customers and services and international expansion, and making add on acquisitions.”
Belluck and his team see plenty of optimism for future investment opportunities in mid-market healthcare and technology sectors, both of which have proven to be relatively resilient to Covid-19 and the disruption in the economy.
“We look for companies and sub-sectors that have a combination of sustainability and growth, a combination of ‘sleep well at night’ characteristics and market tailwinds. Some of the areas we continue to focus on are mission critical software and tech-enabled services, and outsourced providers to pharma and biotech,” confirms Belluck.
Remaining productive and continuing to work well in a difficult remote working environment is something that Riverside Partners views as an important milestone for the firm. “We are pleased that our team and portfolio has adjusted well to working in a virtual world, and that our portfolio companies are resilient.
“We have also been pleasantly surprised that we are able to move forward on new investments. We are currently in the process of completing three new investments. With each one, through multiple Zoom calls, we were able to create trust and become the first choice of the founders and management teams,” concludes Belluck.
General Partner, Riverside Partners, LLC
David Belluck has 30 years of experience investing in and working with lower middle market companies at Riverside Partners, where he has been a General Partner since 1992 and leads the firm. David is a Vice-Chair of the Alliance for Business Leadership, a group of business leaders advancing corporate citizenship and advocating socially responsible economic growth and justice, and is Chair of the Advisory Board of America Forward.