What Is an Independent Sponsor in Private Equity? | Stephen J. Gurgovits, Tecum Capital
No committed fund, all shapes and sizes: Steve Gurgovits on who independent sponsors are and why Tecum Capital has backed them since 2006.
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Castro What is an independent sponsor in private equity? Stephen J. Gurgovits, Managing Partner & Co-Founder at Tecum Capital, explains that independent sponsors can be professionals who spun out of a private equity firm or operators who left their industry to buy and run a business, and that what most of them share is the lack of a committed fund behind them. He describes how Tecum began backing independent sponsors at its 2006 founding out of necessity, and why the firm still works with them today: they help Tecum scale and bring another set of eyes to each transaction.
About Stephen J. Gurgovits: Steve is Managing Partner and co-founder of Tecum Capital, a Pittsburgh-based private investment firm focused on mezzanine debt, subordinated notes and private equity for lower middle market businesses. Before founding Tecum, he was President and CEO of F.N.B. Capital Corporation, the merchant banking subsidiary of F.N.B. Corporation. He holds the CFA charter and is a licensed CPA in Pennsylvania.
Connect with Stephen J. Gurgovits:
Website: https://www.tecum.com/
LinkedIn: https://www.linkedin.com/in/gurgovits
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Topics: independent sponsors, deal-by-deal capital, committed capital, private equity, financial sponsors, mezzanine capital, lower middle market
Disclaimer: Joshua Wilson is a licensed Florida real estate broker (BK3038350) and holds FINRA Series 79 and Series 63 licensure. The PE Podcast is produced by One Iron Network LLC for informational and educational purposes only. Nothing discussed constitutes investment advice, legal or tax advice, a solicitation, or a recommendation to buy or sell any security or to pursue or avoid any transaction. All views and opinions expressed by the host and guests are their own and do not necessarily reflect the positions of One Iron Network LLC, Smooth Stone Capital, any regulatory agency, or any employer. Any performance figures, valuations, or transaction terms discussed are historical, specific to the circumstances described, and are not indicative of future results. Listeners should consult their own legal, financial, and tax professionals before making any business, financial, or transaction decision.
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Joshua Wilson:
Steve, you mentioned on a previous interview independent sponsors. Why don't you give us an overview of what is an independent sponsor?
Stephen J. Gurgovits:
Sure. Independent sponsor is, I call it, a newer term to the industry, but it's been around at least for a couple of decades now. And it's really a broad definition, right? It could be a couple of individuals who spun out of a private equity firm that want to go acquire a business. It could be an operator or two who have left their industry and want to go acquire and run a business. They come in all different shapes and sizes, but for the most part, independent sponsors do not have committed capital behind them. They don't have a committed fund like you would get with a traditional financial sponsor or private equity group. And that is a group, in general, broad, again, definition, that we've backed in a number of deals going back to our inception back in 2006. Partly because we didn't have a lot of traditional relationships with PE groups, so it was by necessity. But as we've done more and more of those deals over the years, we find working with independent sponsors allows us to scale our operations and get another set of eyes or two around the table on a particular transaction.
Managing Partner & Co-Founder, Tecum Capital
Stephen J. Gurgovits, Jr. is the Managing Partner and co-founder of Tecum Capital, a $750+ million private investment firm based in Pittsburgh, PA, which oversees pools of committed capital focused on mezzanine debt, subordinated notes, and private equity, along with a separate strategy via a multi-family office platform for control equity investments. Currently, Tecum Capital is investing out of its fourth committed fund, Tecum Capital Partners, IV, LP, a $415 million fund licensed as a Small Business Investment Company by the SBA. In his current role, Mr. Gurgovits, Jr. is responsible for providing strategic, operational and investment management leadership to the funds, including its overall planning, fund raising, growth and execution of strategy. Mr. Gurgovits, Jr. previously served on the board of directors of Auburn Gear, Uncle Charley’s Sausage, Oberg Industries, ASW, Gibraltar Cable Barriers, and was also former Chair of the Pittsburgh Chapter of the Association for Corporate Growth (ACG). He currently serves on the board of directors for Adherex, 5280 Waste, and Iron City Express.
During his career, Mr. Gurgovits, Jr. has been directly involved in over $1 billion of aggregate financial transactions, both public and private. Mr. Gurgovits, Jr. has also served as the investment and portfolio manager for over $200 million of publicly-traded securities.
Prior to founding Tecum Capital, Mr. Gurgovits, Jr. was President and C.E.O. of F.N.B. Capital Corporation, LLC, a wholly-owned merchant banking subsidiary of F.N.B. Corporation (NYSE: FNB) from its… Read More