It’s not really “considered” for anything because it’s kind of off the run, but I think it sounds like valuable experience. You could potentially lateral to private equity, and to a lesser extent, to a hedge fund. I do a lot of rollup investing via the public markets both long and and short. It’s not a dedicated strategy at many (any?) funds but it’s not uncommon for funds to dabble in it. It sounds like good experience to me but will probably come down to what you make of it in terms of a career transition.
The other obvious angle is to go to another rollup. Frankly, looking in from the outside, it seems like most people at rollups can’t do math, so if you can you might be ahead of the curve. There is really a lot of value destruction that occurs at many rollups. For good learning examples of rollups look at CSV (long) and KEYW (short), Reddy Ice (bankrupt) and Dolan Management (bankrupt).
Thanks for the response bromion. Actually I must say in my company the directors who I have constant contact with are actually quite good. In that they’ve done this before and built up large Roll ups in the past. This is their biggest yet. Plus my manager is actually really good, former m&a guy with a highly respectable advisor. So I’m not sure what you mean about them being bad at math? However, if you mean all the roll ups that have collapsed, well then I understand, I think it has happened quite a lot?
Thanks for those examples, I’ll have a look.
about lateralling to PE, of course if love that. But I’m realistic and I think when you have guys who have Ibanking experience at top shops competing for these roles, I think it’s an almost impossible task to land such a role.
The majority of publicly traded roll ups destroy capital. Private equity roll ups might be a little better but many of those destroy capital too. When they work, they can work extremely well but many ultimately end up going bankrupt.
There are a lot of different types of PE funds. You would probably do well to look at middle market healthcare focused funds. I don’t know any but I am sure they exist.
Ok thanks again.
What do you mean they destroy capital by the way?
They expend capital and never earn a sufficient return on it and/or the company goes bankrupt, wiping out the equity. In almost all cases it only makes sense to get bigger if its profitable, otherwise you are just tying up capital.
was looking at those example Roll ups you suggested. CSV is interesting, death services, I guess you can roll up anything these days! Great idea actually, as they say only certainties are death and taxes!
just wondering about KEYW, it didn’t look like a roll up to me. Was some sort of computer services company?
CSV is a monster, that’s been a 10 bagger for me and I think has a lot more to go. That industry will be rolling up for several decades and the synergy math actually works there if the buyer is smart.
KEYW has spent over $300 million on a random collection of defense assets. It is a rollup loosely (mainly just a bunch of idiots destroying shareholder value with a nonsensical “plan”). It’s a defense subcontractor trying to masquerade as a technology company. It’s pretty obvious that the people running it don’t understand capital allocation math at all.
On reading your active interest to knowledgable and relevant points on roll ups by @Bromion, posting this info readily available with me. I had some queries two years back about “roll ups” when I was involved with a client who was wondering if it was an option for them. Then the following helped me to get some answers, may be it will interest you too ( not sure of the live status of all the links as it is from my old bookmarks) :
Rehab roll up? I lol’d dude, that’s good stuff
^Since the OP talked of healthcare roll up, it seemed to be of interest among the write-ups with references I had! Nice to know you liked it / the idea.The first para is interesting!
Mygos - thanks for the links.
Juat interesting to see some of the different types of roll ups out there. But I guess it is hard maybe to move to a roll up in a very different industry?