Mergers & Acquisitions is recognizing nine dealmakers as the 2020 Rising Stars of Private Equity:
David Farsai, Principal, Mainsail Partners, who is the first at the firm to rise from associate to principal
Andrea McGuirt, Senior Associate, Palladium Equity Partners, who established a strategy for sourcing and executing opportunities in the current deal environment
Molly Fitzpatrick, Vice President, Rallyday Partners, who led three investments and a divestment for the new PE firm
Jenny Zhang, Vice President, Investments, Grain Management, who helps portfolio companies in the telecom infrastructure sector find organic growth opportunities
Ross Stern, Principal, Summit Partners, who played a role in nearly $1.3 billion worth of healthcare company investments
Arjun Mehta, Vice President, Bregal Sagemount, who has made eight platform investments and seven add-on acquisitions
Miguel Tejeda, Vice President, Motive Partners, who stands out for his investment acumen and ability to distill complicated concepts and processes
Clara Jackson, Principal, TA Associates, who has become a trusted supporter during the pandemic to help portfolio companies remain sustainable
KJ McConnell, Principal, GTCR, who played a leading role in about 10 of the group’s last dozen deals
These outstanding up-and-coming investment professionals have been excelling during a period of profound change in the U.S. and in the world. The publication of this list comes at a pivotal moment in time. The country is beginning to open up after three months of quarantine from the coronavirus, while a second wave picks up steam in the Sun Belt from South Carolina to California and including Texas. Dealmaking under quarantine while working from home has proved challenging, to say the least.
Social justice issues have taken on fresh urgency. There is heightened awareness of systemic racial injustice and police brutality against Blacks after the deaths of George Floyd and many others. Meanwhile, the U.S. Supreme Court ruled recently that, “An employer who fires an individual merely for being gay or transgender defies the law.” On immigration policy, the Court recently put the brakes on dismantling the Deferred Action for Childhood Arrivals, or DACA. Meanwhile, the President is asking the Court to overturn the Affordable Care Act, also known as Obamacare.
In the realm of private equity, all of these issues are relevant, as they affect firms and the companies they invest in. The bar has been raised in multiple arenas in 2020, and new standards for excellence are emerging.
As we look to the Rising Stars for insights about the future of private equity, this year, we asked three questions:
- What is the biggest challenge you’ve faced as a dealmaker in 2020, and how have you met it?
- How are you helping your portfolio companies pivot in the face of the pandemic?
- How are you helping to change the private equity industry when it comes to diversity, inclusion and anti-racism?
Read their answers and our profiles of Rising Stars.
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Payments pro
Bregal Sagemount’s Arjun Mehta has made eight platform investments and seven add-on acquisitions
Major driver
Arjun Mehta, a vice president at Bregal Sagemount, has been “a major driver of our activity” and “a talented source of deal flow” for the New York PE firm, says Pavan Tripathi, a partner at Sagemount who was named one of Mergers & Acquisitions’ 2019 Rising Stars of Private Equity. Mehta identified key themes in payment technologies that evolved into a core focus for Sagemount and led the firm’s investments in Corcentric, provider of business payments software; TrustArc; Keg Logistics, which was sold to Seaport Capital; and Discovery Data, which was sold to Northlane Capital. He also played critical roles in investments in Procurement Advisors; Steele Compliance Solutions; Yapstone; Network Merchants, sold to Francisco Partners; and TradeGlobal, sold to Singapore Post, Tripathi says.
Fast track
Mehta joined Sagemount in 2013 as an associate, and his work on craft beer led to the firm’s proprietary control buyout of Keg Logistics in 2015 and his promotion to senior associate in 2015, Tripathi says. He was promoted to vice president in 2017 after his third exit deal. Before Sagemount, he worked at Credit Suisse, focused on underwriting of debt to support PE-backed leveraged buyouts and recapitalizations. Before that, he served as the CEO of GUASFCU, a $15 million credit union in Washington, D.C. He earned his bachelor’s degree in foreign service from Georgetown University.
Lasting partnership
Mehta says his biggest challenge in 2020 was closing Sagemount’s minority growth equity investment in Corcentric. “The transaction was the product of studying the sector for five-plus years, evaluating dozens of opportunities and patiently waiting for the right partnership to arise,” Mehta says, and with the pandemic crisis, the final stages of negotiations became “exponentially more precarious.” But the deal closed May 1, and “the way both parties navigated the uncertainty has cemented a strong and lasting partnership,” Mehta says.
Sounding board
As the pandemic cast businesses into uncharted waters, Mehta says, he supported the three companies he is involved in with resources, best practices and as a sounding board. That included scenario and liquidity planning and discussions with their lending partners. With the economy beginning to reopen, he says he helped the companies plan for bringing employees back to the office, evaluating long-term coronavirus implications and examining potential strategies for strengthening the companies after the pandemic. And besides closing the Corcentric platform investment, he managed to source a new investment opportunity while working from home.
Social justice
Sagemount has always emphasized diversity in its due diligence and initiatives at companies, Mehta says, but “the pain of recent events has made it clear that this isn’t enough.” He says the firm and he as an individual have reexamined how they conduct business “with the goal of promoting inclusion and diversity as well as using our influence to support social justice reforms.” The PE industry “has been too slow to embrace the inclusionary approach that generates those diverse opinions,” he says. “I’ve taken great pride in backing entrepreneurs of all sexes, races, sexual orientations and backgrounds – not just because it was the right thing to do, but because those individuals were the best leaders for those companies.”
