Source Talks ep. 36

Source Talks is a series where we discuss deal origination with expert PE and M&A pros. On this week’s episode, Heather Madland of Huron Capital discusses their thematic investment approach and how her team relies on data to keep abreast of opportunities across the M&A universe.

Heather, tell us about here on capital and the kind of investing that you do there.

So Huron Capital, we are a Detroit-based, lower middle market private equity firm. We are 23 years old, which not a lot of firms can say these days. We have a very focused, thematic investing approach and we are specialized in services only, across three primary industries – commercial and industrial services, professional services, and residential services.

And so, from a traditional sourcing perspective, my team of three – Rich Grajewski, myself and Dawn Coraci – we would have historically covered all referral sources and been probably the lead source of deal generation. We have moved that a little bit more toward going to market through the investment team. They provide dedicated coverage of 2 to 3 sectors each.

So as an example, Brian Russell leads our efforts in facilities services. So as a sector captain, Brian Russell is a thought leader in facilities services and his other two sectors. What does that mean? He’s building networks of advisors and executives. He is focused on calling on the top investment bankers focused on facilities services in the country. And he is really building a deep referral source network for proprietary and process-oriented opportunities in his sectors. And so my team, we’re covering the rest of the universe. So, as everyone knows and as SPS data has shown, the number of intermediaries has only become greater over the years.

Heather, what role does technology play and in your just sourcing operation?

You know, we worked very closely with Nadim Malik and his team at SPS following their investment by Bain & Co. They developed a deeper taxonomy of sectors, and when you really peel back the onion and start understanding the layers of focus that they have, we were able to line up their taxonomy with our ten sectors. And so that helps our entire investment team and research team who all have access to this platform. It has become our go-to platform for researching M&A opportunities, seeing what other deals have gotten done. It’s become the go-to platform for building out our PE-to-PE coverage strategy. They have a great tool where they can show us companies in our sectors that have been owned by private equity for three or four years that might be getting ready for a sale.

What’s a hidden talent or passion that you have that maybe not too many people know about?

I do have a decent singing voice. I grew up singing in choir, both at the church and in my high school and beyond. I don’t have a lot of time to do that these days, but where I do is on birthdays. I send everybody at the firm, in my friends and family community an audio message where I sing Happy birthday to them.

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