Why invest in Search: The unique aspects of Search Funds as an asset class and the impact on appetite of new investors with Andrew Locke Co-Founder & ...

This year, the Australian EtA and Search Fund community is looking forward to its first big event for the region. The EtA Forum (www.etaforum.com.au) will be held in Manly Beach in Sydney, on Friday 16th September.

In this episode I speak with Andrew Locke, Co-Founder & Partner at Ambit Partners. Andrew is an experienced investor, advisor, and board member. Before founding Ambit Partners, he worked as a Private Equity investor and management consultant, focusing on high-growth and emerging markets.

At the Forum, Andrew will be hosting a session to explore the unique aspects of Search Funds as an asset class, when compared to other options, including Private Equity, Venture Capital and listed equities. He’s already developed a deep experience in global Search Fund markets and in this episode he shares some of that experience with us, including what he is seeing in a range of global markets right now!

Please stay tuned as we count down the days and be sure to yell out if you have any questions or comments to offer, so we can make the EtA Forum a great event for all involved.

Tickets available at: www.etaforum.com.au

Connect with Pete: https://www.linkedin.com/in/peteseligman/

Connect with Andrew: https://www.linkedin.com/in/andrewtlocke/

What we discussed:

02:46 Andrew fill us in on how things are going at Ambit Partners

05:43 Pete asks Andrew what he is seeing more of - partner searches or more solo searches?

07:28 Andrew discusses what he has seen in the last 24 months in relation to the expansion of search as an asset class globally

09:36 Andrew talks about how fundamentals translate to new markets, not only across language boundaries, but also across cultural boundaries

13:15 Andrew tells us what we can expect from his session at the EtA Forum

20:23 Pete asks Andrew what are the biggest detractors that might stop an investor from getting involved in search?

Quotes:

We're generally comfortable investing anywhere where there's a really talented searcher, search pair, and a compelling commercial argument for the country itself.

It's a lot of highs and lows, successes and failures every day. So it's it's nice to have a partner I think, just to manage that.

When you're going for the first time in a new market, it's very unlikely you're going to find a partner at the right time by person, right skill set, it's easier to find that in a more crowded market, where there's more people who want to search to find that appropriate partner.

So we're comfortable doing both, but we certainly see kind of in our day to day the advantages of partner search.

It's great to see the type of person that can go into search and the type of geography that investors have appetite for expand and grow beyond the original kind of boundaries in North America and Western Europe. So we say that the best searchers they're far more exposed to any geography than we are as as an investor with a portfolio of investments.

Each geography each country, and each economy has a different set of characteristics that makes different types of businesses more attractive in that space. Even if you can speak the language doesn't mean you can speak the culture. People think that because you're speaking the same language, that actually everything's just going to translate perfectly. But there's a very different culture, and also very different business culture in many ways, between Australia and the US, for example, but even between Australia and various states within the US.

If you do want to build your own private portfolio, make sure that you understand how to access kind of the best deal flow essentially to the top, top talent and making sure that you're building a great portfolio for yourself, and then you bring them real value add to the search, that will attract the best searchers to you.

So many businesses fail, or they try to find a product market fit. That's why startups are so so difficult.. We get to work very closely with the searchers to understand their quality as well, and how we see them as CEOs post acquisition.

So a lot of value is actually exposed and directed during that search period And we're seeing more diversity in the profile of searchers. So older searchers, more operational experience. So it'll be interesting to see how those profiles work out.