Emko Capital Managing Partner Dean Emmerton spoke on October 28 at the 9th Annual McGuireWoods Independent Sponsor Conference in Dallas, joining a panel titled The Middle Ground: Pre-Fund and Hybrid Capital Models.
The session examined the range of capital structures that sit between deal-by-deal independent sponsorship and a committed fund. Dean brought the perspective of a firm that has made that move: Emko Capital operates as a fund, investing through Emko Industrial Fund I, with a focus on lower-middle-market industrial technology and aerospace & defense businesses.
Dean discussed what changes when a sponsor operates with committed capital: greater speed and certainty of close for founders, family owners, and management teams; a consistent underwriting and governance framework across the portfolio; and the ability to execute an operator-led, buy-and-build strategy without starting from scratch on equity for every platform and add-on.
“Operating as a fund changes the conversation with sellers. With Emko Industrial Fund I behind us, we come to the table with committed capital, supplemented by co-investment where it makes sense. That certainty, paired with an operator-led approach, lets us move decisively on platforms and keep building through add-ons. The hybrid models we discussed are a valuable path for many sponsors, but for us, a committed fund has been the right foundation for building lasting industrial businesses.” — Dean Emmerton, Managing Partner, Emko Capital
Dean was joined on the panel by:
- Caroline Dallas, Managing Director, GEM Investments
- Ian Balmaseda, Managing Director, Altaline Capital Management
- Anita Sonawane, Principal, Sagard Private Equity
- Kevin Boardman, Partner, McGuireWoods LLP (moderator)
The McGuireWoods Independent Sponsor Conference is one of the largest gatherings of independent sponsors, capital providers, and advisors in the lower middle market. We thank McGuireWoods for hosting and our fellow panelists for a substantive discussion.