Welcome to the latest episode of “PE Value Drivers”!

I was lucky enough to snag Thomas Fountain from One Rock Capital Partners for my latest chat.

Tom is an operating partner at One Rock, a private equity firm that specializes in mid-market investments across five primary sectors: chemicals and materials, food and beverage, field services, manufacturing, and distribution. The firm is committed to enhancing the operational performance of its portfolio companies to generate solid returns for investors. Below are some highlights from our conversation.

Please take the time to watch the entire video, which is approximately 14 minutes long, to fully engage with the discussion. Tom offers many valuable insights that you won't want to miss! We'd appreciate hearing your thoughts in the comments section below.

Key Takeaways:

• Tom joined One Rock after being recommended by a former colleague from Honeywell. With previous experience as a CIO, Tom now enjoys sharing his expertise across various businesses.
• Leveraging his diverse industry and functional experience, Tom drives improvements within the businesses he collaborates with. His primary focus is on forging business and technology partnerships, mentoring CIOs, and pinpointing tech-based opportunities for value creation. By encouraging IT leaders to strive for excellence, he aims for them to become the top value creation engine in their companies by the end of the holding period.
• Tom's involvement in the diligence process at One Rock begins early, as he partners with deal teams and remains engaged with investments throughout the holding period. This collaborative approach offers valuable insights into various aspects of the businesses, such as people, capabilities, and overall operations. To optimize carve-outs, Tom and his team aim to strike a balance between art and science, moving towards a scalable and repeatable process. Working closely with top-tier partners and developing adaptable playbooks enables them to swiftly adjust to various scenarios, expedite carve-outs, and ultimately maximize value creation.
• Speed plays a critical role in One Rock's work, as they prioritize rapid solutions over perfect ones. This approach requires new hires to adapt their pace and concentrate on the essential tasks, expecting swift decision-making. For individuals interested in private equity, Tom recommends operating partner roles for those with functional expertise across multiple sectors and a passion for analysis and coaching. This role allows them to share their knowledge and expertise across numerous businesses without needing to be hands-on daily.
• When engaging with potential service providers, Tom looks for demonstrated expertise in the target industry and functional area, the ability to quickly distill information, and clarity of purpose and intent. One Rock has both industry-aligned and functionally aligned operating partners who respect each other's experiences and collaborate as a cross-functional team when evaluating opportunities and making decisions. Communication with service providers should initially be frequent, with short and focused conversations, allowing for alignment and course corrections. As the relationship and understanding of each other's operating approaches evolve, the communication can become less frequent, enabling a more efficient working relationship.