Private Markets 360° | Episode 35: Scaling Businesses for Long Term Success (With Mark Sotir, President at Equity Group Investments)

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Chris Sparenberg [00:00:01]:

Welcome to Private Markets 360 where we explore the dynamic world of private markets. In today's episode, we're excited to have Mark Sotir, president of Equity Group Investments, a private investment firm founded over 50 years ago by Sam Zell. EGI is known for its flexible investment approach focusing on scaling businesses over the long term while leveraging in house operational expertise. With his extensive experience in operations and private equity, Mark is an invaluable resource for understanding effective business scaling. We'll discuss EGI's distinctive investment approach and how Mark's background contributes to driving value creation within the firm's portfolio. We'll also explore EGI's strategic approach to scaling businesses, highlighting how they partner with portfolio executives to implement operational efficiencies and grow companies across various industries and into multi billion dollar enterprises. Mark, we're thrilled to have you on Private Markets 360. How are you?

 

Mark Sotir [00:00:59]:

Hey Chris. Thank you, Jocelyn. Really appreciate the opportunity.

 

Chris Sparenberg [00:01:03]:

Wonderful. We'd love to start off this discussion with hearing more about your background. It's really interesting. So we'd love for you to tell us about your career journey and what led you to the role at Equity Group Investments.

 

Mark Sotir [00:01:13]:

Yep. Again, thanks for having me. Yes, my background, I started in management consulting for two years as an analyst, went to work at Coca Cola for seven years in brand management, so sales marketing. I could shoot TV commercials and do new products, a lot of front end consumer oriented stuff. And then I went to Budget Rent a Car and worked my way up and eventually ran that company. And it was a Fortune 500 business. It was public. They owned Rider Truck Rental, they own a car sales organization.

 

Mark Sotir [00:01:42]:

So got a lot of operations experience as well as international experience from that business. And then I went to a software company in the education space, so curriculum software. So they developed it and sold it into school districts. And so that was my kind of company background for the first 20 years of my career. And then I came to Equity Group and I've been here for 20 years, most of the first 10 years as an operating partner. We didn't have those titles but basically just interfacing with the companies that we bought, creating the value in the company, sitting on the boards and then for the last 10 years actually running the business. So that's kind of the background. And I met Sam, I don't know, probably five years before I came to work here and just always stayed in touch with him.

 

Mark Sotir [00:02:27]:

And then this opportunity opened up and I honestly thought I'd be here for two or three years and then probably Go run another company. And it's been such a great place to work and an interesting experience since I've been here 20 years.

 

Chris Sparenberg [00:02:38]:

That's incredible.

 

Jocelyn Lewis [00:02:39]:

Fascinating. Well, thank you Mark for sharing that overview. Really interesting to hear about the diverse experiences that you, you've had from the global brands like Coca Cola budget rental car to the hands on operational roles that really must have shaped your perspective in scaling businesses. And that foundation clearly influences the way that you approach investments today. So speaking of which, EGI has a reputation for doing things a bit differently in the private equity space. So I'd love for you to share a little bit about how, how equity group investments differentiates itself from traditional private equity firms.

 

Mark Sotir [00:03:27]:

Sure. So you know, as I think you guys said in the intro, Sam founded this business in 1968. We've been around for a while and we're a lower middle market control investment firm. The control is the key piece here. That's like a mandatory for everything we do. What makes us maybe a little more differentiated is I don't have a buying fund. The majority of the capital that we deploy comes from the Zell family. We're not a family office.

 

Mark Sotir [00:03:52]:

The Zell family has a family office that's a sister company of ours. So I'm an investment firm that has long term dedicated capital. Now we do raise some money from some partners of ours, but more on a deal by deal basis. This allows me, I mean it's a huge benefit, number one, especially in this environment. Right. I don't really spend most of my time out raising capital. So I think a lot of presidents and CEOs of PE firms, that's where they spend the majority of their time. And because I don't have to do that, I get to spend much more time in the companies.

 

Mark Sotir [00:04:22]:

So that's sort of like kind of one key point. The capital and the flexibility of the capital. It lets me time cycles. Right. We do some work in a lot of cyclical industries. And so I don't have sort of a fund duration that pushes me to sell or buy at any particular time. So I have that flexibility. There's a lot of flexibility in the capital structures, you know, the way we use the money.

 

Mark Sotir [00:04:47]:

And it also leads to a slightly longer hold period. Right. So there's a lot of discussions nowadays about continuation vehicles and things like that. We effectively are one of those.

 

Chris Sparenberg [00:04:56]:

Right.

 

Mark Sotir [00:04:57]:

We hold the company as long as we want to create the value that we think we can create. And that leads to, you know, what we really do is we scale businesses, we target the businesses we buy, we target multiple of invested capital MOIC of a 5x5 times. So we tend to grow our businesses a lot more than the average PE firm. Number one, because we have that duration, we have that flexible capital. And then two, there's just a very heavy operational focus to jumpstart a lot of organic growth. So I think there's a number of other PE firms that do iterations of this. But I would keep coming back to. It's the capital and the nature of the capital that allows us to find these really interesting businesses, spend a lot of time with them, we're very involved and scale them significantly.

 

Jocelyn Lewis [00:05:52]:

So Mark, very interesting about your target MOIC of five times, which seems pretty high. Wondering the time frame when you initially look to go into an investment targeting that type of return. Is there a general time period that you'd like to recover that investment within?

 

Mark Sotir [00:06:14]:

Yeah, I mean, I'm going to generalize here. First of all, again, we're not a family office. We're not buying assets for 20 years, 25 years, nothing like that, you know, 8, 10, 12 years, kind of in that range. So longer than I think most PE firms, whole period for a typical asset. But the reason we can do this, and again, not every company works out this way, but the reason we can do it, it's not. You don't necessarily see the multiple showing up in year one, two or three. Right. What really happens is I think like most firms, we get involved, we put in the right management team, the right organizational structure, the right systems and processes and we get the machine running.

 

Mark Sotir [00:06:57]:

And if you do that well, you know, you get out into year three, four, you're probably doing pretty well on this. But that's where the momentum really starts. Right. So we make a lot of these MOIC turns in the last couple years because we've already started to scale the business and you're just doing more of whatever it was originally that makes you successful. Yeah, I mean, they do look like high numbers. The caveat is we don't do lots of deals. Right. We're probably finding two platforms a year because there's a lot that goes into, you know, finding the kind of company that, that you can do this with.

 

Mark Sotir [00:07:37]:

It's not every single company, obviously, that, that you can scale this large, but when you find them and you can put a few extra years into it, that's where you get this, this really powerful, you know, multiplier effect.

 

Jocelyn Lewis [00:07:51]:

And Mark, thinking about your strategy understanding is that you're focusing on the lower middle market and what types of firms are you seeing today? When I think of the landscape from the lower middle market with the operators are owning these businesses, what comes to mind is the boomer generation that's retiring and passing their businesses on really to the next generation. So with that phenomenon, how do you come in, find the deal flow, find these interesting businesses and really work with that dynamic of the founders. The next legacy, the next. Where does EGI fit in there?

 

Mark Sotir [00:08:43]:

Yeah, so that's exactly right. We probably about 70% of our deals in the last 10 years have a family or founder component to it. We like to play in that space for a couple reasons. The biggest one being that a lot of founders are actually pushing back against sort of the typical five year hold. You know, that, that a blind fund has. Right. Sort of our kind of perfect scenario with a founder is somebody who doesn't want to retire right now, but they want to keep growing the business and the business needs more capital, they have to put more money in. But they realize 98% of their net worth is tied up in this one company and they should be taking some money out.

 

Mark Sotir [00:09:27]:

And if they're really smart, they realize that they've grown it and used all their expertise and got to a point where they really need some help. And so that's what catches our attention. Right. We can sort of solve all those problems for someone at the same time we put capital in. We don't want them to sell 100%, we'd like them to sell 70, let's say. So again, we're the control investor, but we still want them to have skin in the game. We still want them to be very involved. Usually the founder has great customer relationships.

 

Mark Sotir [00:09:58]:

They built a culture, they've got a lot of employee connections. We don't want them walking out the door and leaving. But what they need is they need management. They need to be supplemented in terms of different kinds of management skills. And so that takes a little more work, I think, than a typical firm because, you know, the owner and the entrepreneur has a lot of strong points of view. You can't just walk in and just upend everything they've done that just doesn't work. But what's really interesting is these people tend to gravitate towards firms like ourselves because they can see we're going to own a company for a while. We're not going to come in and change a culture.

 

Mark Sotir [00:10:38]:

We're not going to go, you know, come in and start just laying people off and cutting benefits and things like that. A lot of Entrepreneurs are very focused on legacy. They're focused on their employee base and they want to keep this business growing. And so it's a nice segment of the space that some PE firms play in, and we do as well. It's a little more high maintenance because if you've got a different set of constituencies, sometimes there's, you know, it could be a brother and a sister working together, it could be a father and a son. A lot of different family members might be in a business. So there's just more complexity that you have to work through. But on the flip side, they're usually more interested in partnering with a firm like us because we're going to supplement what they do and kind of turbocharge it as opposed to just pull it in a whole different direction.

 

Mark Sotir [00:11:29]:

And most importantly, as I said at the beginning, they really like the idea that we're not just going to come in for a couple years and then flip the company to someone else. Or more importantly, a lot of them are really worried that if they sell to a PE firm in four years, they'll end up selling it to a strategic and their business will get absorbed by some big company and it won't exist anymore. So that the legacy component actually is pretty powerful.

 

Chris Sparenberg [00:11:52]:

And a big piece of the investment approach that you mentioned is also risk management. How does EGI approach risk management when investing in diverse sectors like healthcare, infrastructure and energy?

 

Mark Sotir [00:12:02]:

Yeah, so, you know, that was an enormous part of Sam's focus and foundation, right. Which was assessing risk, managing risk, and you couldn't get into any conversation with him without talking about it. So there's a number of things. Right. One, and I think everybody does this. Well, you have to find the risks. Right. You gotta start with the basics.

 

Mark Sotir [00:12:24]:

Just figure out what all the risks are. I think most firms are pretty good at that. I would say where I push a little harder, I think, is you really need to understand the source of the information that's helping you assess the risk. This happens a lot in our diligence, where you think you've confirmed something and you keep pushing and digging a little bit. And what you realize is ultimately it was the CFO who said that. And it's like, well, that may be true, that may not be true. Right. But understanding that, the confirmation of your understanding of the business, the investment thesis and even the risks, like, where do you get the data from? I know that sounds basic, but it's really interesting if you keep peeling that onion, that what you sometimes think is a fact is actually ultimately somebody's opinion and that changes your view of risk.

 

Mark Sotir [00:13:15]:

The second thing, and I think people can do a lot more here, is you have to mitigate these risks. I think a lot of firms find the risk, put them in their investment memoir and kind of go, well, these are the risks. We spend an immense amount of our time trying to either make the risk go away or mitigating it, right? So you know everything from we don't lever the companies a lot, right? Just start with basics. If you can own a company for 10, 12 years, you're probably going to hit a recession somewhere along the lines, right? There's probably going to be something that goes on in the industry that disrupts you. So you know, we use leverage, but we tend to under lever a little bit because we, we're going to probably run into some trouble along the way. From an industry or the economy perspective, there's a lot of things you can do with insurance, right? There's a big one where people assess management, not just the C suite, but two, three layers down and they know this hole's in management and people don't address them. So all of these things fall under this category of mitigate the risk. Don't just identify it, but actually minimize it, make it go away.

 

Mark Sotir [00:14:25]:

And then after you've conceptually done all that, you're left with, we call it just a residual risk. These are things you can't do anything about. And Sam would always say, are you getting paid for that risk? And it's really interesting in your underwriting how people spend so much time thinking about the return. And what you really need to do is think about the risk where very focused on trying to create these asymmetric outcomes, right? So we spend a lot of time trying to protect our downside. And I don't know if we're going to make four times or five times or six times our money. I don't know. But if I know that, I'm not going to lose our money, right? That asymmetry becomes really, really powerful. And then the last thing I'd say about risk, and we're very focused on this, is risks that are low probability but high impact, right? So the hundred year storm every 10 years type of thing, we probably over index on staring at those risks, trying to mitigate them.

 

Mark Sotir [00:15:25]:

Things that people probably say, well, the odds of that happening are slim. Again, partially because of our longer duration, we're more likely to run into some of those things. So we focus a lot on things that could really harm the enterprise risk, things that could really harm the Business, you might say, well, the odds of them happening are really low, so why worry about it too much? But you know, in our view they tend to happen a little bit more than people think.

 

Jocelyn Lewis [00:15:50]:

Fair assessment. And of course it's always helpful to understand risks as you're walking in. So your insights on risk management really highlight EGI's disciplined approach and proactive approach to investing across diverse sectors. But managing risk is just part of the equation, right? You also need to create value and drive growth and the combination is where that real transformation happens. So I'd like to switch topics and talk a little bit about scaling businesses and your passion for doing so. So Mark, how does EGI work with your portfolio companies to implement operational efficiencies and create the scalable solutions and then position, position your portfolio companies for long term success?

 

Mark Sotir [00:16:45]:

Yeah, it's a great question. So by far the number one issue when you're going to consider scaling something as large as we do is talent. Right. In some ways it's really straightforward conceptually, but it's just an immense amount of work. It almost doesn't matter what the company is. If you're going to be 3, 4, 5, 6, 7 times the size, your management isn't ready to handle that. And I'm not just talking about the C suite, right? Usually where we have the most amount of work to do is in middle management. Because again, if you're three times the size, we'll buy a company where there's two HR professionals.

 

Mark Sotir [00:17:25]:

When you're four times larger, you're gonna have somebody managing benefits and somebody managing recruiting. Right. And somebody managing payroll and it just mushrooms. And so you get this need for specialization. Everybody in a small company tends to be a jack of all trades. And as you grow you need people who have subject matter expertise and hopefully some of them are in the company and can develop that expertise. Sometimes you have to bring in people from outside, obviously, and it never stops. Right? So it's not like you just put a management team in and you're all set and they just grow the business.

 

Mark Sotir [00:18:02]:

You run into some Peter principal occasionally and again it just keeps going. So that by far is the number one constraint. I'll describe it that way to scaling businesses. The way we look at scaling them, if we don't have the right middle management that's able to grow and develop, we simply can't scale the business. I'll kind of say that's like half of it. And then look, we look at all the different functions, but we do focus on growth, right? We Start with really simple things. You know, we buy a lot of B2B businesses, not a lot of consumer businesses. We'll start with the sales organization.

 

Mark Sotir [00:18:38]:

And I'm just going to give you a couple quick examples. But there's hundreds of these areas to focus on. Almost always your top 5% of the sales reps could do an awful lot more, but they're bogged down on administrative work, they're bogged down on sort of managing existing accounts that, you know. And so before we kind of come in and say, let's hire more salespeople, let's make our salespeople a lot more productive. And I run into that almost everywhere. There's huge impact by adding some resources that can take work off of the sales team's kind of, you know, daily work and free them up to sell more. There's almost always a distinction between what an existing account needs to grow and how you win new accounts. And a lot of businesses we buy don't have a plan for how to stimulate growth in an existing account versus how do you go out and win new business at the end of the day? So let me pause there.

 

Mark Sotir [00:19:34]:

On the growth side, there's just a lot of examples of things like that that the companies that we buy, again they're lower middle market, right? So they've been successful, they've grown, but they've been, you know, generalists. And as you get larger, you need to bring in people who've sort of been there and done that and kind of know what they're doing in a particular area. But we do this across the board. So like a different related area is just pricing. There's almost never somebody in most of these companies that's in charge of pricing. It just sort of happens. Maybe sales is in charge of it. We find an awful lot of money in looking at activity based costing and figuring out which transactions are profitable and unprofitable and then charging correctly seasonal pricing and volume based structures.

 

Mark Sotir [00:20:20]:

I know this is all pretty tactical stuff, but there's just hundreds of things like this that we run into that the company can just do better. It's not that they aren't doing any of this, but they can just improve a lot. And if you can put these improvements in early, then as we grow and scale the business, all of that improvement just cuts across at the larger scale and that's where it becomes really accretive.

 

Chris Sparenberg [00:20:44]:

And I think that's the perfect jump off point to kind of move from how you're scaling and structuring businesses into how you're measuring the results. So the KPIs and value creation from the GP's perspective, can you talk to us about how you're defining and measuring value creation and what metrics you prioritize? You know, company by company or sector by sector. What's the general approach at egi?

 

Mark Sotir [00:21:07]:

Yeah, so a couple things. One, just as an investor, externally looking at it, because we tend to hold these a little bit longer, the value creation is not in the transaction itself. Yes, I like to buy low and I like to sell high, and everybody does. Right. So we're focused on that. But if we own an asset for 10, 12 years, we have to create a lot of value during that time frame, that duration. Right. So the value has to be created within the company.

 

Mark Sotir [00:21:33]:

And an example of that is just cash flow. Everybody talks about it, but a big part of our model is our company's returning cash to us. Right. So we're not buying a company, growing the EBITDA, and then eventually selling it and hopefully getting a better multiple. We try to do all that, too. But most of our companies, we have an expectation that they're throwing off more and more cash every single year. So, you know, in our industry, when you talk about dpi, it's a sort of buzzword. Now, our approach with our companies is we like over, you know, probably three, four, five years to get all of our capital out, and then we just keep growing it at the end of the day.

 

Mark Sotir [00:22:12]:

So that's, from an investor perspective, we're very, very focused on cash flow. And cash flow to us is. Our definition is when you return the money to us. Right. It's not operating cash. Everyone's got these different definitions. Ours is you've generated so much cash that you can take it off the balance sheet. So that's the external version.

 

Mark Sotir [00:22:29]:

But internally we're, you know, in the company, we're, you know, every business is different. Again, we own a John Deere dealership, we own a hospital chain, we own a company that fishes and farms bluefin tuna. So we have very different kinds of businesses. And obviously the dashboard of metrics that we measure are all explicit to that particular company and industry. So they all differ a lot. What I would say, and this is more my operating background, it's not about the financials themselves. Right. The income statement, cash flow, balance sheet.

 

Mark Sotir [00:23:03]:

Yes, we do all that stuff and we forecast it and it's important. But when I used to run companies, if I didn't know how the income statement was going to end up at the end of the month, within the month that something was wrong. I needed forward looking metrics and indicators that really told me, were there problems going on in the company? Kind of as we speak. I didn't wait for the financials. So I'll just give you an example or two. In our hospital chain, one of the things we measure is the percentage of first surgeries of the day. And are they starting on time? Sounds like an obscure little metric. Right? But if there's, it's a capacity business, there's so many, you know, rooms and so many doctors, and then you can get in only so many surgeries per day.

 

Mark Sotir [00:23:49]:

Well, if the first one starts late, guess what, the whole rest of the day backs up and you probably don't get one or two of the surgeries done. So zooming in operationally on, you know, hey, these hospitals keep starting their first surgery really late. Why go fix that at the end of the day? And what you end up doing is you're just creating capacity almost for free. So that's like an example. It sounds, it sounds very micro, but it actually, in a company with an immense amount of operating leverage, it's a very, very powerful metric. If you could move that. So we build dashboards daily, weekly, monthly of all of these sort of operating metrics that actually drive the income statement. Right.

 

Mark Sotir [00:24:36]:

And that's the stuff we tend to pay a lot more attention to because that's something also it's a metric that you can do something about.

 

Chris Sparenberg [00:24:45]:

Right.

 

Mark Sotir [00:24:45]:

If you know, one of the hospitals always is starting their surgeries late. All right, I don't know why, but I can zoom in on that factor and find some ways to improve that versus oh, my margins are too low. All right, well, that's interesting and relevant, but I gotta go a lot deeper than that to actually impact the business.

 

Jocelyn Lewis [00:25:05]:

Right. You're looking for those leading indicators to really help you then shape where you can lean in. Well, that was a great example of one of the ways that you were able to come in and notice something and then have a way to have an impact and make a change. Mark, are there any other examples where you've been able to transform an operating model to generate significant value? And specifically, what other changes were you able to implement and then what outcome did that drive?

 

Mark Sotir [00:25:46]:

Yeah, so we, I mentioned really quickly, we own this company off the coast of Earth, on the coast of Baja California, that fishes and farms belief in tuna. So a really interesting little niche. This company is excellent at finding the right kind of fish. They grow them for about two years. Really Good operators. At the end of the day, what they couldn't do, they didn't really have the commercial expertise to expand this. They were in a sense almost like just selling the raw material, so to speak. Right.

 

Mark Sotir [00:26:16]:

They would just sell the fish to whoever brokers and things like that. What we brought, and this is a little broader than the other example, is that commercial, we help them build the commercial capabilities. So as an example, they're in Mexico, they sell mostly into the US for whatever reason, they partnered with a distributor who agreed to sell their product across the entire us it was a two person team in la and they basically sold, you know, most of their volume in la, but they'd locked up the entire US we weren't getting a lot of traction outside of la. We came in and helped them restructure that agreement, have that firm focus on California brought I think 12 other distributors into the US and the company in the last two years has been growing, significant double digit growth because of that. So that's like one example. We also moved from selling in two countries to I think we're selling in 10 right now. Expanding distribution into a new country. That's food by the way.

 

Mark Sotir [00:27:15]:

With there's a lot of regulation, it's perishable. So there's a lot of different things you have to work through to expand across countries. So we helped them with that. They were charging the same price per pound to everybody. So whether it was in Japan or the US wherever. And so we helped on the pricing side of things. And then you know, ultimately too there's, it's perishable. So a lot of companies have sales and operations planning where they pull the most current thinking from the sales end to literally the production end, like how much are you going to produce? And we sort of build a process to do that which is don't just sell what you catch, but actually catch what you think you can sell.

 

Mark Sotir [00:27:53]:

So to do both of those at the same time. So let me pause there. I mean there's, you know, every company, there's different areas where they need help and we try to come in and help them on that area. Like if they know what to do on a certain function, we just kind of let them go. But that's the whole point. We find companies where there's a lot that they can expand into or improve on.

 

Chris Sparenberg [00:28:17]:

I think an interesting way to follow up on that is, you know, not just thinking about the companies that you find, but how a company might find you. So before we wrap up, it would be great to hear your Thoughts on entrepreneurs who are looking to, you know, receive PE funding, who are trying to scale their businesses. Is there advice that you would give to them as they're seeking investment from firms like egi, particularly regarding how they present their business and how they think about their growth potential?

 

Mark Sotir [00:28:43]:

Yeah, and I've sort of learned this over the years. First of all, I would definitely say that, you know, you think you're taking capital from a PE firm, but what you need to think about is in most cases you're selling your business to somebody and you have a new owner. And even if you're the entrepreneur and you're staying on and you're involved with them, if you're not the control investor, you really, really need to understand who your owners are. Don't just meet em, ask questions and all that. Get references. Go back and talk to the companies that, you know, CEOs of the companies that they own. That's like a great way to do it. Go find the CEOs of companies that they've sold.

 

Mark Sotir [00:29:23]:

Right? Get their two cents. Understand the constraints on the capital of whoever you're partnering with. Is there a time horizon? Right. If you're going into a partnering with a typical PE firm, you want to know what fund you're in, what that investment mandate was, how much time they have left to deploy the capital and when do they have to return it. So it's, you know, things like that you definitely want to understand. I think the second thing is just realize things are going to change, right. If you're an entrepreneur and you have control of your business, there's going to be new constituents here. There's going to be a board of directors, right? There are going to be people from the PE firm who are just asking you lots of questions.

 

Mark Sotir [00:30:03]:

And it's just the nature of it. It's not good or bad, it's just different. And you have to get used to that. Look, there's no question when you're starting to talk to other funds, management needs to show well. So it sort of goes without saying, but, and I'm not just talking about the CEO and the CFO and a presentation. We, and I think a lot of people dig really deep. You want to get to the second third layer, down to management. You're searching for bench strength.

 

Mark Sotir [00:30:31]:

You're searching for is the strategy that everybody's talked about upstairs kind of actually is everybody aligned with it and are they executing? So you gotta think hard about there's gonna be a lot of visibility into how you run your day business and So I think that's really important. And then look, finally sort of the normal stuff, people looking for recurring revenue, they're looking for, you know, companies that can demonstrate some real competencies and things. So if you're really good at something, make sure you're showcasing it. And excuse me, the last two again are straightforward, but they're, they're critical people. You know, PE firms are buying companies to grow. You know, do you have real growth strategies? And Kevin, you demonstrate it or are they just bullets on a piece of paper? And we spend a lot of time on that. How realistic are the growth strategies? And have you, are you down the road on it? Have you actually done some of it? And this is, wow, we could just continue to do more. And then finally, we already talked about, about risks.

 

Mark Sotir [00:31:30]:

People have a tendency to try to minimize the risks. And as I said at the beginning, we're going to find the risks. Like if you really try to downplay risks, we're not, we're not buying it. All right? We probably just think a little less of the person who thinks something isn't important when we think it really is. So I think being as objective as you can be about what's risky about your business because if you think there's nothing, then you're missing something obviously. So I mean, look, there's a lot more. But I think those are the key things at the end of the day. And it's a massive decision.

 

Mark Sotir [00:32:09]:

Who you partner with. Right. Is critical. I think sometimes people get a little too hung up on the exact economics. They're very important not to minimize it, but you're partnering with somebody for X number of years and you better feel really good about who you're partnering with.

 

Jocelyn Lewis [00:32:25]:

Mark, this has been great, really. Thank you so much for joining us on Private Markets360.

 

Mark Sotir [00:32:31]:

All right, no, thank you for both of you. I really appreciate the time.

 

Jocelyn Lewis [00:32:35]:

Thank you all for joining us on this episode of Private Markets360 where we had the pleasure of speaking with Mark Soter, president at Equity Group Investments. Mark shared invaluable insights in the private equity landscape, particularly in the mid market sector, and discussed how EGI approaches value creation through operational efficiencies and strategic planning.

 

Mark Sotir [00:32:58]:

Planning.

 

Jocelyn Lewis [00:32:59]:

We explore the importance of understanding your audience when seeking investment, the significance of risk management over the long term and the critical role of a strong management team in driving growth. Mark's experiences and expertise shed light on the complexities of navigating the change that comes with scaling businesses into multi billion dollar enterprises. We appreciate you tuning in and hope you found this discussion as enlightening as we did. Don't forget to subscribe to Private Markets360 for more expert insights and trends in the world of private markets. Until next time.