Episode 148: Dustin Ackerman of Future Standard on
Mid-Market Secondaries and Growth at a Reasonable Price

Episode Transcript   

 

00:02:40.920 — 00:02:43.040 · Shiv

All right, Dustin, welcome to the show. How's it going?

00:02:43.160 — 00:02:46.080 · Dustin

It's going great. How are you? Pleasure to be here.

00:02:46.120 — 00:02:52.000 · Shiv

I'm good. Excited to have you on. So why don't we start with your role in Future Standard and let's go from there.

00:02:52.360 — 00:04:01.630 · Dustin

Absolutely happy to. So my background is a little bit unique. You know, I started, uh, you yeah. Working for some of the bigger banks. Goldman Sachs then went to Royal Bank of Scotland, but, uh, you know, really had a passion for the private markets. I had done an internship in kind of venture capital. Private equity wanted to get back in that space.

And so I joined a, you know, a firm called Portfolio Advisors over ten years ago. And we've now, you know, combined with another firm called FS Investments. And we are now Future Standard. So, um, you know, that's that's where we sit today. I've been with the firm for more than ten years. We invest, uh, capital into the private equity space.

But our business broadly, uh, invests in private equity, private credit, private real estate and other alternatives. Uh, and we service clients across the institutional landscape as well as, uh, as private wealth. So we, uh, you know, we're, um, you know, an expert in, uh, you know, middle market private equity that's really kind of the, uh, the landscape that we operate in predominantly.

And so happy to to dive into that a little bit with you today.

00:04:01.750 — 00:04:09.110 · Shiv

Yeah. And can you walk us through that? Like what types of investments are you making or how are you working with the private equity space in particular?

00:04:09.430 — 00:05:11.990 · Dustin

Yeah, absolutely. So our business model is one that is, you know, focused. It's a sponsor centric model. So we build relationships with private equity sponsors as well as private credit sponsors. And then we ultimately provide them with capital for their funds. We co invest alongside them in the deals that they're doing.

We have a big secondaries business where we are, you know, leading and investing in GP led continuation vehicles. The GP led secondary market has increased significantly over the past 5 or 10 years. So we're very active in that space. And then on the credit side, you know, we leverage those sponsor relationships that we have to deploy capital into senior and junior credit opportunities.

So middle market companies who are, you know, looking to raise debt financing, you know, we leverage that sponsor relationship to get a to get a seat at the table as a potential lender in those deals.

00:05:12.030 — 00:05:29.270 · Shiv

Got it. And what in terms of focus or like what areas are you trying to come in or at least as part of your portfolio where you would say, that's like your primary type of investment that you're making, where you're driving the most amount of value for your own investors or your or your own funds.

00:05:29.310 — 00:08:56.100 · Dustin

Sure. So I think about it in a couple of different ways. I mean, we we invest across many sectors. So for the most part a little bit sector agnostic. But obviously we have, you know, themes and and conviction on certain sectors over over others. But you know, we have a pretty diversified portfolio and a diversified sponsor base that we work with to to deploy capital.

But I would say where the focus really comes in is focusing on companies that are sub $1 billion of enterprise value. So, you know, companies that are typically in that range of ten to maybe 75 or 100 million of EBITDA. That's really the sweet spot for us in terms of where we like to deploy capital. There are a number of reasons, you know, for that.

But, you know, one of which is often companies of that size, it's potentially the first time they're taking private equity capital. And we we really like those opportunities. We think there's a lot of that low hanging fruit that could be captured in, in terms of institutionalizing those businesses, helping, you know, a founder owned or a management, you know, owned business that's been operating for 20, 30, 40 years, helping them to kind of take their business to the to the next level, helping them to grow their sales team, helping them to do an acquisition.

Maybe they've never done an add on acquisition, and they want to grow outside of the local region that they've been operating in for a long time. They don't have the expertise to do that. And so our thesis is really that we can you know, we alongside the sponsors we work with can go in and really help these companies to become institutional businesses and, you know, grow them from a sub $1 billion business to, you know, a company that is in the 1 to 2 to, you know, 2 to $5 billion range.

And then those companies really become attractive assets for the larger private equity players. Right. The bigger brand names in private equity that everyone kind of recognizes, that, you know, they're hunting in that in in that landscape. And we like to be a seller of those businesses up upstream to the bigger private equity players.

So that's really what we're what we're focused on. And what we try to do is, is build a portfolio that is concentrated in sub $1 billion type businesses, helping these companies to to grow and scale. You can generate, you know, good growth rates on these smaller businesses, but you also find that you're not competing as much on price, right?

They're they're more attractive assets at better prices. We think a lot about GARP, which is, you know, growth at a at a reasonable price. So in today's market, you know, a lot of assets, especially those that are touching, you know, anything with technology or AI or trading it pretty high multiples. Right.

And so we think about how can we deploy capital into, you know, really high quality businesses at a more reasonable, uh, EBITDA multiple. And that's what we feel like you can do in the middle market. And, you know, in many cases, these companies also have a lot less leverage. So we think there's a lot of risk mitigation that can happen because these companies are more likely levered.

You're not using financial engineering to to drive the returns. So so we like that dynamic. And really that's the backbone of everything that we are doing that informs the sponsors that we build relationships with, that informs the deals that we, you know, back with equity capital, the deals that we back with, you know, credit and debt financing.

And so really that's what makes us unique is, is that we are so disciplined on staying true to that middle market thesis.

00:08:56.300 — 00:09:16.740 · Shiv

Yeah, I really like that the GARP acronym grows at a reasonable price, because many times you have companies that are growing fast, but the EBITDA margins shrink considerably because they're over investing in certain areas. Can you expand on that? Like how do you evaluate that, whether a company is in a reasonable range or what that reasonable range would be for a particular business or vehicle?

00:09:16.780 — 00:10:49.540 · Dustin

Yeah, it does depend on sector, right? Like there's some health care businesses that we've been looking at recently and have invested in over the last 5 to 10 years that, you know, are trading in multiples that are, you know, kind of in the high teens. Right? But what you have to underwrite is, are these businesses growing?

Do they have a moat around, you know, the margins? Do they have a good, you know, payer mix? Like, what are the dynamics of that health care business that justify a little bit higher multiple. If you look at the industrials portfolio we're pretty active in kind of industrials and services. And you know obviously those are trading more in the low teens and potentially some, you know, trading in the single digits.

And you know, look we're underwriting you know strong growth rates. We want to know that these businesses have the capability to to grow and expand their market share. Frankly, you know, when we partner with a sponsor to do it, we're underwriting. What is their expertise in that sector. Have they done this before.

Have they owned and managed a business that is in that sector and how were they successful? Can they recreate that value creation playbook with this new asset. And so you know we yeah it's all relative. We we certainly are um, you know, thinking about each sector on a sector by sector basis in terms of what GARP means.

But we're we're certainly very focused on, on that as we deploy capital. I think relative to, you know, our large cap peers who are, you know, playing in the bigger businesses, you know, our valuations look much more, you know, reasonable, reasonable on an at an on entry basis.

00:10:50.060 — 00:11:06.220 · Shiv

Yeah. What about. And some of the stuff that you're talking about. You're coming in as a co investor almost with these with these GPs. Like how involved are you in the actual vetting of those investments. And on the operational side of actually creating enterprise value with those investments?

00:11:06.260 — 00:13:43.180 · Dustin

Yeah, it's a good it's a good question. And it does kind of depend on the situation. Right. And the relationship that we have with a sponsor. Um, in many cases we are serving as a as a limited partner advisory board member for these sponsors. So we have a lot of visibility into, you know, what the sponsors are doing.

And they, you know, of us as a strategic partner in those instances where we're, you know, strategic capital, helping them get, you know, a deal done. We're always a minority partner in the underwriting. We are in some cases where underwriting that deal side by side with the sponsor, you know, potentially prior to them even, you know, winning a deal, providing equity, commitment letters, you know, helping them get to a point where they can be competitive and, and, you know, win a new transaction.

And then obviously what we're underwriting is what is the sponsor's angle for winning that deal and what is the value creation that can be had? Our team doesn't necessarily get as involved directly with the value creation, but we are very, you know, closely integrated with those sponsors. We know what they're doing.

We know their operating partners. We know what those partners are going to do when they get into, you know, into that business and try to help create value. So our goal is to underwrite opportunities where we know and have certainty that a sponsor will be able to drive value because they have a certain person who, you know, is an expert in, you know, CRMs or implementing ERP systems into, you know, into a business.

And so that's what's going to drive value in the first 90 days of, you know, the whole period. So we're very much, uh, alongside the sponsor. But as a minority investor. And I think that model really works for us, given that it it gives us that diversification across many sponsors who are sector experts.

Right. And I think this is a great way to build a very diversified portfolio across sectors. The benefit that we have is that we partner with healthcare experts, right, who are only doing healthcare deals in the 3 or 4 healthcare verticals that they really focus on. But that doesn't mean that we're only doing healthcare deals, is we have another sponsor who's focused on consumer deals and sponsors doing industrials or services, and we can kind of pick handpick those experts and then benefit from the value creation that they are implementing because of that expertise and that knowledge that they have.

But we can then for our clients, build a very diversified portfolio across the important sectors of the economy.

00:13:43.780 — 00:14:04.730 · Shiv

That's great, I guess. I guess with that though, comes like you get needing to get operationally involved in certain in certain situations. How does your team approach that, or how have you structured your team to be able to work with GPs, where you are involved at the board level, or vetting some of these investments and and looking at where those levers are versus where, let's say you're just more of like a financial partner.

00:14:04.770 — 00:15:40.730 · Dustin

Yeah. No, it's a good question. I mean, in most cases, if we're, you know, we may be a board observer, um, in certain co-investment situations, you know, in most cases, we're a strategic financial partner. The reason that the sponsors use us to get those deals done is, you know, a sponsor when they're thinking about investing their next fund and, you know, they're, say $1 billion fund, they're going to do ten deals on average, you know, 80 to $100 million check sizes.

You know, they're going to be deals that are going to be 150 million, 200 million in check size. And they need strategic partners who can be there on day one to help them underwrite the deal and to be there in terms of equity financing and equity equity capital. So our sponsors view us as that partner where, you know, we've already invested in their funds, we know them really well.

They can come to our teams and we can underwrite a deal. And, you know, 7 to 14 days, get up to speed, work with the sponsor to, you know, then get to a point where we can be providing that capital to them in very few instances. Are we, you know, getting into the weeds with those sponsors, we defer most of that to to the sponsor because they are, frankly, the experts and they're very hands on with their individual companies.

Our portfolio is obviously much more, you know, diversified across many, many investments and many funds and sponsors. And so we're less in the weeds, but more at a, you know, 10,000 foot view monitoring where our sponsors are creating value and how they create that value.

00:15:40.890 — 00:15:56.170 · Shiv

Yeah. That's great. I guess. You know, you also have another side of your business where you're focused on the secondary. So like, what percentage of your business are some of these, uh, primary investments, if you will, versus the backing LPs and their funds or secondary investments. Yeah.

00:15:56.170 — 00:17:35.050 · Dustin

Yeah. Great question. So we do about 2 to $3 billion every year in primary capital. On the secondary side it's around you know 1 to 2 billion of secondaries deployment. We're investing capital out of multiple funds. Uh on the secondary side we focus on LP secondaries. That's kind of the bigger part of our business.

And we also have a GP led secondaries business that is a growing part of our firm. It's also, you know, obviously a growing part of the overall secondaries landscape. But those two things are very complementary to each other frankly. You know, a lot of the secondary activity that we look at and see and and ultimately invest in, you know, over 70 to 80% of that is in GPs that we've already backed on a primary basis.

So we already know the manager. We know the assets really well. Our secondary team is able to underwrite with a high degree of conviction those assets when they're going to exit what the valuation should be. And that gives our secondaries team a real leg up, right. In terms of we already know these sponsors super well.

In many cases, the sponsors can be very restrictive on who is buying those assets in the secondary market. And because we already have the relationship, we're in a great place to to bid on those assets, often in a less competitive situation. If a sponsor is only approving 2 to 3 potential buyers, you know that's better than being in a situation where there are ten secondary buyers all competing on price to win the deal.

So, you know, that's really where we operate is in that kind of space where there is an intersection between the primaries and the secondaries business.

00:17:35.250 — 00:17:55.810 · Shiv

Yeah, that's really interesting because a lot of secondaries investors only do secondary investing. And whereas in your case, it's almost like a pipeline from the primary investments that you're deploying capital into. And then you're able to see, okay, there's an opportunity here and there's more to potentially deploy in a secondary format.

00:17:55.850 — 00:18:28.530 · Dustin

That's exactly right. And we also benefit, too, from having significant relationships with the LP community. Right. The investors in those funds who are looking to generate liquidity are our business has long had relationships with the biggest public pensions, foundations, endowments who are using the secondary market as a portfolio management tool.

And, you know, we have relationships with them such that we can have, in some cases, bilateral conversations with sellers and come up with a liquidity solution for them because of that relationship.

00:18:29.610 — 00:19:47.320 · Shiv

We'll get back to the show in just a moment. But before we do, one of the most common and important value creation levers that we hear about on the show from private equity investors and our own PE partners is go to market. Yet when these same PE partners bring us into their portfolio companies or new target investments that they're exploring, we find that the marketing function is quite immature under utilized and under optimized.

And so that's a huge opportunity that we see inside these companies. And if you have a portfolio company that you feel like it's scale a lot faster to drive more pipeline and revenue, or you're looking at a new investment where you feel like that could be core to your investment thesis. But we'd love to explore that with you and figure out how we can partner with you to drive more enterprise value creation.

On the marketing side, similar to the way that we've done with major PE firms like to OP data, HG, SDG, and many more. At this point, we've done hundreds of engagements across hundreds of industries and verticals, and we have a ton of benchmarks and frameworks that we bring to these engagements to help you drive as much enterprise value as quickly as possible.

So if that sounds like something that you might be interested in, you can just email me directly at [email protected], or go to our website and schedule a demo, and we'd love to speak with you about it. And now with that said, let's get back to the show.

00:19:48.360 — 00:20:00.800 · Shiv

How much of your business is being driven by that need from the LPs, or is it versus, let's say, the funds themselves or the the companies that you potentially primary investors in?

00:20:01.040 — 00:22:26.840 · Dustin

Yeah. So, you know, the secondary market broadly has gone to a point where LPs secondaries are half the market, GP secondaries are half the market. So what that means is, you know, half of secondary volume today is driven by the GPs who are looking to generate liquidity in their portfolio through, you know, taking a single asset, moving it into a secondary continuation fund and providing their LPs with some DPI through that manner.

Right. So that's that's half the market and that's not necessarily today half of what we do. But it's a good portion of, you know, 20 to 30% of what we do today in our portfolios are those opportunities where GP is taking an asset and providing liquidity on a on a single name basis, coming to the market. And as secondary buyers, we're providing that liquidity.

On the LP side, you know what's driving liquidity? There has been a number of things over the past few years. You know, we've certainly seen the denominator effect impact. You know, some of the bigger investors in private equity in 2022, when you saw, you know, the public markets decreased significantly.

Some investors were over allocated to private equity. So they came into the market and started selling assets. You've also seen in the market fundraising has, has, has picked up pretty significantly for secondaries over the last 3 to 4 years. And because of that a lot of sellers are viewing the market as a it's a good time to sell because there is plenty of capital.

There's a lot of a lot of potential buyers out there. And, you know, I can potentially get a good price for for assets. So you're seeing more active portfolio management on the private equity side. A lot of sellers are now they're not first time sellers. Right. If you would have, you know, talked to us 5 or 10 years ago.

A lot of the sellers that we were buying assets from, it was the first time that they had done gone through a secondary sale in their portfolio. And so, you know, didn't have as much experience, kind of didn't know what, didn't know what to expect. Now you're seeing repeat sellers in the secondary market using the market as a portfolio management tool.

The market is becoming more and more efficient, which I think is is kind of great for everybody. Right. That market continues to grow. I think it was north of 200 billion last year, is going to be north of 250 this year. Very, you know, very big and increasingly big market more more efficient. So you know, I think it's good for both buyers and sellers from that perspective.

00:22:26.920 — 00:22:30.160 · Shiv

Why do you say that. Help me understand. Why do you say that. That's good for everybody.

00:22:30.400 — 00:25:01.600 · Dustin

Yeah. I mean, I think as long as you can remain price disciplined, like it's certainly good for the sellers in terms of, you know, there's opportunity to manage your portfolio and sell. If you can remain disciplined on price, it's good for the buyers. There's just more opportunities to, you know, deploy capital.

Uh, there's more transactions being had. Um, you know, if you can maintain that edge in terms of competing on price, like I mentioned earlier, in terms of certain situations where it's like a limited auction, a, a carve out, right? When things one of the things that we really like to do on the secondary side is if you've got a big seller that's selling $1 billion portfolio, you know, we like to look at those that pool of assets and say, for example, it's 20 funds.

We'll look at that portfolio, but we'll come back to the the brokers or to the seller and say, well, we want to buy just these two assets. We have a relationship with that GP. We know the assets really well. We want, you know, you to carve out that portion and we're going to just buy those individual assets.

We frankly think that's a very unique competitive dynamic, given that, you know, there's those situations. It's because we're on a restricted list from that GP where we're one of the approved buyers. And so, you know, we can we can compete for that asset and not have to compete on price or competing on on a relationship.

So that's a good place for us. So you know the market continues to grow. The the GP led market is something to really watch. And you know, there's a lot of exciting things happening on that side of the table. A lot of the sponsors that we work with who've held an asset for three, five, six years, they really like the business.

And maybe they've laid a lot, laid the foundation for great growth, you know, to happen over the next 3 to 5 years. But just given how long they've already held it, they may want to give LPs an opportunity to generate some liquidity. So they'll come to the secondary market and, you know, they'll talk to folks like us to provide that solution, where they give LPs a chance to to sell a portion of their stake in that asset, or they could roll, they could continue to maintain, you know, their their investment in the deal, but they're providing the liquidity opportunity, and then they're using secondary buyers like us to provide that equity capital in kind of the interim phase, kind of while they're still holding the business, still generating and creating value, but can still do what the LPs are desiring, which is, hey, we still want some DPI, we still want some liquidity.

00:25:01.680 — 00:25:24.920 · Shiv

Yeah, I guess from a liquidity standpoint, totally see that being a good thing. But I'm curious like your take on this, isn't it like a not the best thing where funds are needing more and more secondaries as a way to return capital to LPs, because that means that the companies that they've invested in are not functioning at a level where they can actually exit those investments and return capital through an actual sale.

00:25:25.080 — 00:28:23.310 · Dustin

Yeah, there certainly is a dynamic in that market where not every single asset continuation vehicle is created equally. Right. Uh, some of those assets you are dealing with, that dynamic of sponsor has held it for 5 or 6 years. They want to sell it, but the current market is not giving them the price that they would want for that asset.

So naturally they need to to hold that asset for another couple of years. And, you know, hope that the market turns a little bit and maybe they can get a better price for that business. You have to be really careful about those opportunities, right. Like you don't want to be the provider of liquidity in a situation where, you know, an asset is is going to just get stuck in a in a sponsor's portfolio.

So we, you know, we watch that and we underwrite that. And we're very cognizant of that potential dynamic in in the space. But that certainly isn't true for all GP led continuation stories right. There are many, many assets out there that, you know, have really strong growth trends. The the sponsor has, you know, done a really great job of managing it to this point.

And sure, they could take it to market and sell it for a good price today, but they recognize like, why give the next GP another 2 to 3 x turn when we could capture that in the next three years? So a little bit of it is, you know, they're recognizing the opportunity to continue to create value in a business that they've owned for a long time, and they can kind of mitigate some of the concerns that LPs have around.

Oh, it's been 5 or 6 years. I haven't had liquidity. You know, by offering the investors the option of taking that liquidity or or holding the investment. And so ultimately, I think, yeah, there's certainly things to watch for this, this market ten years ago was very different when it was zombie assets.

Zombie funds like that were, you know, getting pulled into, uh, you know, continuation vehicles. Most of those were multi-asset type deals and kind of cleaning up old portfolios. Today, the market is that's not a big part of today's GP led market, frankly. The majority of these assets are are good businesses.

And, you know, in some cases it's like, okay, yeah, if we hold it for another two years, maybe we'll get one or 1 or 2 turns of EBITDA difference, uh, in a, in a different market. That may be, you know, a reason for, you know, holding the asset for a little bit longer as an underwriter on our, our side, we just want to make sure that that's, you know, there's still an opportunity for an exit.

And usually we're underwriting these to kind of a four 3 to 5 year, four year old period. Um, uh, for, for the sponsor. But they're usually there needs to be a strong value creation plan for those next three years in order for us to get really excited.

00:28:23.470 — 00:28:33.590 · Shiv

Yeah, I think I think those are those are all great points. I think based on are you seeing exit activity potentially pick up, or are you expecting it to increase over the next little while?

00:28:33.630 — 00:30:31.260 · Dustin

Yeah, Q1 was a little slow. Just, you know, volatility in the overall market I think dampened some of the transaction activity that, you know, maybe would have been expected in Q1. But Q1 has historically always been a little bit slower on exits and, you know, picks up throughout the year. And you know, Q4 is is typically one of the bigger, uh, month or quarters in terms of, of volume.

So what we're hearing from our sponsors and what we're seeing in our own portfolio is there are a lot of companies that are in that process of we've hired an investment banker. We're we're talking about bringing it to market. We're just thinking about the right timing, you know, for that, lining up the right potential, you know, buyers for that, whether it's a sponsor, sponsors or strategic etc..

You know, some of the noise in the overall macro, you know, has potentially slowed that down with respect to, you know, the the conflict in Iran and some of the other, you know, dynamics that were facing on on the macro side. But overall, I, I do believe in what we're hearing from our sponsors is that exit activity is picking up in the back half of this year.

And, you know, one of the dynamics that we see in the middle market relative to just the overall PE market is, you know, the middle market is a little bit more insulated to some of the headwinds that you face on the exit front, because there are more natural buyers for these smaller businesses than if you're talking about a 5 or $10 billion private equity backed business, you've significantly narrowed the field of potential buyers.

You're talking about a $700 million business. You know, you can easily identify 12 sector expert PE sponsors who have invested in that space. That will be potential buyers for the asset. So I think liquidity has been a little bit more predictable for us in the middle market. Just given that dynamic of your you're selling upstream, you're selling to, you know, kind of that middle layer of private equity sponsors.

00:30:31.340 — 00:30:49.060 · Shiv

Does that change kind of where you deploy your capital? Because if you're, let's say, more excited about a particular sector or you see exits potentially ramping up, there is a path to generating more liquidity for your investments to like, does that change kind of how you deploy your capital or where you're focused?

00:30:49.260 — 00:33:03.260 · Dustin

I mean, at the end of the day, for our clients, we're building long standing, you know, diversified portfolios. So, you know, we don't if we ever are tilting a portfolio one way or another in terms of a sector by sector, it's very much on the margin. So if it's, you know, our technology exposure is typically 15%.

If we were leaning in there might go up to 18 to 20, right. Like we're not taking significant sector sector bets. Um, you know, we just we believe truly in in the benefits of diversification across the asset class. And so, you know, we'll do a little bit on the margins, you know, here and there, there are obviously some assets or some sectors that we have shied away from because you've seen, you know, fewer and fewer exits.

It's and it's been harder, harder to exit a company like for example, in the healthcare space, private equity. Um, you know, some sponsors got super excited about the dental service organizations, you know, the dental space or like the pet care veterinary space. Sponsors got really excited. A lot of sponsors got into that space, and now it's a lot harder to exit those businesses at the multiples that they paid because the, the, the excitement has has waned a little bit.

So you have to be, you know, you have to be cognizant of some of those trends. But, you know, we certainly believe that as we, you know, look at deals on the add entry that the you know, the exit path is is pretty clear. The big thing for us is we're not going to be reliant on the ups and downs of the IPO market. Like only 2% of the deals that we look at are ever exited through through an IPO.

Majority are through strategic acquisitions or through a private equity sponsor purchasing the business. So ultimately it's just a fundamental foundational thesis of ours that, you know, you're you're buying these smaller companies. Your liquidity path is a little bit more, more clear and predictable because of the amount of dry powder that you have with those sponsors who are sitting, you know, a little bit bigger than where we're at.

00:33:03.620 — 00:33:11.540 · Shiv

How has AI shaped some of this? As you underwrite companies or funds, like how are you looking at things differently here?

00:33:11.580 — 00:35:07.900 · Dustin

Yeah, it's a it's a great question. It really is um, part of everything that we're, we're doing today and regardless of sector, the sponsors we're working with and the deals that we're doing there is there's there's always a slide in the CIM on AI and how it's being incorporated into into that investment.

So we're very cognizant of that. Um, you know, certain businesses will have quicker benefits from, you know, some of the improvements in AI and the technology there on the industrials and manufacturing side, which, you know, I mentioned we're we're pretty active there, AI and machine learning, automation, robotics, like all of those things have been a real, you know, benefit to, you know, some of the sponsors that we work with in terms of improving operational efficiency, uh, at the facilities that they, you know, run and operate.

You know, healthcare, it's been a big thing. You know, they're we've invested in some businesses that, you know, do robotics. And so, you know, AI and machine learning have have certainly been been helpful there as well as, you know, companies that are in the, The the life sciences space in terms of drug discovery and things like that.

So certainly impacting really everything that we do at the company level, at our own level, on the asset management side. You know, our teams are incorporating that into really everything we're doing in terms of due diligence, just helping our associates and analysts be even more efficient than they already were in terms of gathering data, understanding, digesting data.

Um, you know, they've become a lot quicker at, uh, you know, producing diligence, uh, tear sheets and things like that. So we're seeing it impact, you know, our day to day as well. Um, and not just, you know, the underlying portfolio companies. So it certainly is a benefit.

00:35:08.100 — 00:35:20.340 · Shiv

That's great. And I'm hearing similar things from other funds as well. So that's great to hear. Um, we're coming up on time here, Dustin. But before we close off, if people do want to get in touch with you or learn more about Future Standard, what's the best way for them to do that?

00:35:20.380 — 00:37:00.410 · Dustin

Yeah, absolutely. So, you know, we are uh, again, a little bit of background. You know, we're a $90 billion asset manager based out of Philadelphia, but we have offices in in Connecticut and New York and Dallas, as well as international offices across Zurich, Switzerland. Offices in in Korea, Japan and, uh, and Hong Kong.

So we've got folks, you know, really everywhere. You know, we've got a large we had about 550 people across the organization. About 100 of those individuals are investment focused individuals. And then obviously operation sales and and others. But you know, we're we're they're futurestandard.com, you know, is uh, is is our website.

And we're, uh, easily reachable at all times to. And we're always excited to talk to people about middle market investing. So we're very passionate about the space. We love what we do. We think it's a really unique benefit to, uh, to to investors portfolios. We've seen a lot of, you know, a lot of investors have noticed that in their own personal portfolio that they're kind of mid cap, small cap exposure has become less and less and less and less exciting.

There's just fewer companies that they really get excited about that are of that size. And I think that's because companies just stay private for longer. And that's what we're capturing right is those businesses that are sub a billion. What used to be the small caps in the public market. Those companies stay private.

And you know we're backing those those businesses. So always welcome to talk to folks and excited to talk to people about what, uh, what the middle market can do for their, uh, for their portfolio.

00:37:00.530 — 00:37:19.930 · Shiv

Awesome. And, Dustin, thanks for coming on and sharing your wisdom. Uh, we'll be sure to include all the links you mentioned in the show notes as well. But just from the audience's perspective, I think you shed a lot of light onto how firms can leverage secondaries and generate a ton of value in current market environment and conditions, which I think a lot of people are trying to figure out.

So I appreciate you doing this.

00:37:19.970 — 00:37:22.530 · Dustin

Excellent. And thank you for having me on. Appreciate it.

00:37:22.850 — 00:37:46.530 · Speaker 3

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00:37:48.730 — 00:38:12.250 · Speaker 3

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