The Riverside Company Closes Value Fund I at Target of $350 Million
The Riverside Company, a global private investment firm focused on the smaller end of the middle market, announced the successful final close of its Riverside Value Fund I (RVF I), achieving its target of $350 million in capital. This represents the 34th fund raised in Riverside’s history.
The Riverside Value Fund (RVF) generally invests in businesses undergoing operational transformation or facing complex situations or unique challenges. The fund has a flexible mandate, but primarily targets control investments in North American businesses that generate revenue between $60 million and $300 million.
“We believe our differentiated approach to sourcing, coupled with our hands-on operational expertise and broad resources across the Riverside platform, position us to deliver positive results. I extend my sincere gratitude to our limited partners for their trust and support as we embark on this exciting journey together,” said RVF Managing Partner and Fund Manager Sean Ozbolt. “We are proud to have raised our target fund size in this environment, and we are grateful to work with such an experienced and sophisticated group of investors who are aligned with our value-oriented investment approach and our commitment to operational transformation to drive growth.”
RVF Managing Partner and Riverside Global Executive Operating Partner Ron Sansom added, “With the breadth of companies in the lower middle market, there are many businesses in unique situations or facing financial or operational challenges such as corporate divestitures, failed roll-ups and integrations, unsuccessful systems implementations and complex leadership transitions, among others. Our differentiated platform allows us to find these situations, uncover hidden or trapped pockets of value and execute an operational game plan to drive top- and bottom-line growth.”
RVF aims to identify and acquire North American companies in attractive industries at value prices, drive aggressive operational improvement and exit these investments at healthy company growth multiples. RVF leverages the depth and breadth of Riverside’s global platform, including its highly experienced, 18-person origination team and its extensive group of more than 65 operating partners.
“After 35 years and nearly 1,000 investments, we’re excited to bring our considerable origination, industry and operating expertise to value buyouts and complex situations, as a complement to our more growth-oriented private equity funds,” said Riverside’s Co-CEO Stewart Kohl. “And therein lies the big opportunity for RVF - to buy companies that have stumbled but can get up, dust themselves off, get back in - and even win the race. We’re pleased that so many LPs - both existing and new to Riverside - also recognized this opportunity and are joining us.”
RVF completed its first investment of LMG Holdings, Inc., (LMG), a national manufacturer and distributor of ignition interlock devices for DUI offenders, in 2020, followed by add-on Alcohol Monitoring Systems the next year to form SCRAM Systems, the leading end-to-end judicial monitoring solutions provider for alcohol related offenses. Also in 2021, RVF invested in PFB Corporation, a leading North American manufacturer of energy efficient, environmentally friendly insulation building products for residential & commercial applications and materials for infrastructure / civil projects. RVF added siffron, a manufacturer and distributor of consumable and seasonal merchandising display products and loss prevention solutions, in 2022. All three businesses offered compelling near-term operational improvement opportunities that drove early earnings growth and value creation.
"Combining RVF’s ability to find value in less-than-ideal situations with our origination team’s ability to generate differentiated deal flow has produced tremendous investment opportunities, and we are expecting our activity level to only increase with the confluence of rising interest rates and inflation,” said Riverside Co-CEO Béla Szigethy. “The RVF portfolio is off to a great start, with several more investment opportunities on the horizon. We’re delighted that investors have supported the first vintage of our Value Fund strategy.”