Friday, July 12, 2024
Friday, July 12, 2024

Pete Seligman, EtA Investor

Pete Seligman is undoubtedly the most active EtA Investor in Australia. He is a serial entrepreneur through acquisition...

Pete Seligman is undoubtedly the most active EtA Investor in Australia. He is a serial entrepreneur through acquisition, having completed 5 acquisitions, 3 “tours of duty” as a CEO, 2 exits, and 3 sell-downs before starting to invest in Search Funds (SFs).

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1/ Who is Pete and how did you come to the SF landscape?

I started my career in 1997 at Hughes Trueman, where I learned to distill complex problems and design pragmatic solutions as an engineer. I then moved to Carson Group to continue my development as a manager, where I learned to build and lead teams and get things done. Later, I transitioned to investment banking at Macquarie Bank in Australia and London, where I learned the crucial balance between risk and return. After returning to Australia and spending a few months at the advisory firm Evans & Peck, I spent nearly four years at Stockland, one of Australia’s largest diversified property groups, until 2012.

After a 15-year career spanning engineering, investment banking, and general management, I realized that the large corporate path wasn’t for me. I needed more autonomy and accountability than big business could ever provide.

I wanted to run my own business, but without a fantastic idea for a startup, I co-founded Alpin Group with a friend to acquire, operate, and grow small businesses in Australia. This was a big leap of faith that felt crazy at the time, but it proved to be the best business decision of my career! We acquired our first business in June 2013, a small mining services company, and over the next four years, we acquired four more (CIC Technology, Duncan Solutions, PTronik and CIT Holidays). I acted as CEO for three of the businesses, for periods ranging from six months to three years, after which I successfully managed my own succession and remained on the Boards of each as a Non-Executive Director.

Before I knew it, I had introduced myself to the concept of “EtA”, even though I’d never heard the phrase! This owner/operator experience gave me the mix of autonomy and accountability I was seeking. It also opened my eyes to the world of SMEs and the SF community. Since 2020, I’ve been leveraging my own search experience to back other aspiring entrepreneurs as a Search Investor and play my part in supporting the critical global transition from baby-boomer owner/founders to the next generation of business owners.

2/ During the past four years, you have become the most active SF investor in Australia. Tell us more about your portfolio.

I didn’t want to jump back into a CEO role, but I felt a real affinity for SMEs and the challenges they face. I wanted to stay close to the action, so I decided to back searchers and help them with a very hands-on approach to acquire, grow, and achieve success.

To date, I have invested in a dozen SFs, including Greenstorm Capital, Single Trail Capital, Acheron, Wattletree Capital Partners, Prospect Search Capital, Bass Capital Investments, Crux Capital Partners, SMEVentures, Origo Capital, Great Innings and Crosby Street.

Additionally, I’ve participated in 5 Search Fund backed acquisitions: Ace Training, Multiskills Training, Austral Herbs and Grima Recycling in Australia, and SSS IT in New Zealand. In each case, I worked closely with the CEOs and still serve on the Board.

3/ What are your main motivations for investing in SFs?

Search Funds attract investors who value the active role they play in the journey and the diversity of experience and perspective it offers. It allows investors to support entrepreneurs before identifying a company and provides a chance to mentor and make a positive impact. SFs help entrepreneurs grow their businesses and can lead to a rewarding experience for all parties involved.

I love the opportunity to run alongside aspiring owner-operators and watch them grow through the experience they gain on the journey. I enjoy being ‘hands-on’ with the entrepreneur and leveraging that opportunity to improve my skills as a coach and mentor.

Obviously SFs (and small business ownership via EtA more broadly) can deliver exceptional financial returns – a fact not lost on me! However, the most fulfilling part for me is playing my small part in each entrepreneurs’ business ownership experience.

4/ What qualities are required for a searcher to seduce you?

The first layer, or the “ticket to the game” is a foundational level of intellectual capability, including: (i) the ability to ‘speak accounting’ (the language of business) even if you’re not an accountant; (ii) a strength with numbers; (iii) a logical mind that’s adept at problem solving; and, (iv) a reasonable grasp of writing and persuasive language. Many of these things can be demonstrated with qualifications (like Bachelor’s Degrees and MBA’s) and a few introductory conversations.

Once an Entrepreneur has the “ticket”, the real tests are whether they have the necessary grit, coachability and leadership.

EtA is a tough journey, so grit is necessary (on a daily basis!) to maintain the patience and persistence to make it to the end. It’s a core trait that might be demonstrated in any part of the entrepreneurs history, whether that be personal experience, corporate career and/or other formative events from their past.

Fundamental to the Search Fund model is the non-financial value contributed by the investor group – primarily through the coaching and mentoring they can provide along the way. To fully exploit this aspect of the approach, it is important that the entrepreneur brings a beginner’s/growth mindset.

And finally, every one of these businesses, regardless of type or size, will require alignment and engagement of the team to be successful… and that requires strong leadership from the entrepreneur.

5/ As the organizer of the main EtA Forum, what is your vision for the Australian & New Zealand market, and what are your perspectives for the future?

Whilst people have been buying, owning, and operating small businesses for a long time in this market (as with any market), we’re still a relatively young community of like-minded entrepreneurs, investors and advisors. So I think there is a long way to go and an exciting journey ahead.

There are plenty of targets to acquire, so that will not be a constraint in the short/medium term. The trick is maintaining the balance of Entrepreneurs, Investors and Lenders who are active in the market as we grow. Spinning each of these ‘plates’ in concert will help our market continue to grow, but it will take work and focus from everyone in the community to maintain that momentum. I’m looking forward to a bright future ahead for SFs and EtA more broadly across Australia, New Zealand and Asia-Pacific!

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