The Stephens Group, LLC (“The Stephens Group”) is pleased to have been recently profiled in several publications, including Buyouts, Mergers & Acquisitions, Private Equity International, and The Deal. Managing Directors Aaron Clark and Clay Hunter sat down with reporters to discuss the firm’s history, strategy and vision for the future. The focus of the articles was on The Stephens Group’s multi-decade history of investing in and partnering with middle-market companies as well as what differentiates the team from both private equity firms and family offices in today’s highly competitive market environment.
The Stephens Group operates as a hybrid between a family office and private equity firm. Hunter pointed out that “[w]e have every capability of a high-end private equity firm in terms of daily M&A activities, the capabilities of the people, how we work with our businesses and our risk appetite … but with a couple of key differences: [o]ur permanent capital permits us tremendous flexibility and allows for a perspective and [a] different, completely-aligned-with-our-businesses, decision criteria than many investors enjoy… and I do also think we have a little bit of a softer touch that people sometimes associate with a family office.”
Importantly, the firm’s permanent capital base allows for flexibility with timing, investment structure, and hold period, all of which are both tremendously important and valuable to businesses. Clark added, “[w]e have the luxury of making decisions in a way that better aligns with value creation – [that message] resonates with all types of businesses and leadership.”
This flexibility also allows The Stephens Group the ability to seize opportunities when its competitors can’t. One example of this was the Global Financial Crisis (“GFC”), when the firm made three investments in 2009, during the depths of the GFC. Clark noted that, “[w]e didn’t have the pressure of turning things around lighting fast, since we’re not timing our investments with a fund cycle. Having a bit more patience because of our longer-term perspective and having dry powder – that’s our approach.”
Despite a competitive market environment, the firm has maintained its rapid pace of deal activity, in part by narrowing its industry focus. The team recently completed an extensive strategic planning process to identify and reconfirm primary areas of focus now and going forward. Following this exercise, the firm will continue to focus on commercial and industrial products and services, software and tech-enabled services, food and consumer products, and select opportunistic areas from within the family’s network. Since the beginning of 2019, The Stephens Group completed three platform deals, a follow-on funding for one investment, five add-on acquisitions and divested two investments. In addition, the team added an operating executive, a business development executive and three junior investment professionals as it continues to focus on value creation at its companies. Clark acknowledged that “[t]he tempo of our activity has increased over the last few years, with this year being a continuation of the trend. We expect the acceleration to continue.”
ABOUT THE STEPHENS GROUP, LLC
The Stephens Group, LLC is a private investment firm that partners with talented management teams to help build valuable businesses. Backed by the resources of the Stephens family, The Stephens Group has a long history of providing sophisticated, strategic expertise and taking a partnership approach to help companies successfully achieve their strategic visions and build long-term value. With over $1.5 billion invested since 2006, The Stephens Group targets investments in industries across the U.S., including industrial and commercial products and services, specialty distribution, B2B food and consumer products, technology infrastructure and tech-enabled services, as well as select opportunistic situations.
Ronald M. Clark
The Stephens Group, LLC