Private Equity: Seaside Equity Partners Raises $325M Fund II
Seaside Equity Partner's Founder and Managing Partner Andrew Thompson discusses raising its second fund, the firm's portfolio performance and investing in San Diego.
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Seaside Equity Partners, a San Diego-based private equity firm, has raised $325 million for its second fund.
The firm invests hundreds of millions into low-to-middle market businesses.
Alongside PE firms JMI Equity and StepStone Group, Seaside Equity is one of the largest private equity firms in the region.
We explore the firm’s investment portfolio and its unique acquisition strategy.
Please enjoy this breakdown of Seaside Equity Partners.
High-Level Overview
Founded in 2017, Seaside Equity Partner’s mission is to invest in “mission critical companies” in the Western U.S.
Seaside Equity has raised a total of $500 million from “blue-chip” limited partners.
What makes it unique? The firm employs a buy-and-build strategy, in order to make them attractive to major PE or strategic buyer. They primarily acquire founder, family, and entrepreneur-owned businesses.
It typically acquires businesses with less than $15 million EBITDA.
Founding Story
The Founder and Managing partner is Andrew Thompson.
Prior to Seaside, Thompson worked as the Managing Partner at Wafra, a global alternative investment manager with $32 billion AUM.
For a decade-plus, he focused on lower mid-market acquisitions and helped establish their West Coast office in 2014.
Departing in 2017 to launching Seaside, Thompson and built out a small investment team and began investing on a deal-by-deal basis.
After building a reputation and strong portfolio, Seaside was able to close $160 million for its first debut effort, which was above its $125 million initial target.
Now with two successful exits under its belt, Seaside has matured as trusted private equity firm that manages hundreds of millions, and continues to build momentum.
Seaside Equity acquires businesses in three key sectors:
Commercial Services (plumbing, HVAC services, etc.)
Tech-enabled Services (IT infrastructure, compliance, etc.)
Education Training Services (continuing education, certifications, etc.)
Investment Portfolio
Seaside has made a total of 29 investments, with 17 add-on acquisitions.
Its portfolio includes two Colorado-based companies: Peak View Roofing, a leader in roofing and exterior services and Absolute Performance Inc., which provides end-to-end managed IT infrastructure solutions in the US.
Other companies include BlueThread Services, Cascade Training, and Outdoor Dimensions, which also provide mission critical services.
The firm prides itself in is its ability to source, perform due diligence, as well as create significant value.
“We always try to keep everything simple and not overcomplicate things. We focused on doing the small things extremely well, over and over. The decisions we made early on are beginning to compound into much larger opportunities today,” said Andrew Thompson, founder and managing partner at Seaside Equity Partners.
Recent Deals
Seaside sold portfolio company Andersen Commercial Plumbing, a plumbing and HVAC services provider, to Sun Capital Partners in July 2022.
The firm deployed its “buy and build” strategy for this deal by acquiring an additional eight plumbing companies prior to selling.
This led Seaside Equity to a significant exit in four years, said Thompson.
Seaside also acquired FirstLine Road Solutions in October 2022, which is a heavy-duty towing company that provides roadside services.
Raising its Second Fund
In December, Seaside raised $325 million for its second fund.
Exceeding its initial fundraising goal by $100 million.
Investors include endowments, foundations, corporate and public pensions, insurance companies, consultants, family offices and individuals, and others.
Seaside’s unique approach and differentiated investment strategy helped generate significant support from a broad base of limited partners.
“We had substantially more interest than we took on,” said Thompson. “We have also seen 100% retention from all of our investors in fund one who remain invested in fund two.”
Expanding in San Diego
Seaside will continue to partnering with founder, family, and entrepreneur-owned businesses for its second fund.
It expects to invest at least 8 businesses out of the newer fund.
Thompson expects to double its firm’s headcount in 2022, hiring additional investment associates, among other key roles.
“To be discipled, we are playing the long game and want measured growth over time,” said Thompson. “We are very fortunate to be headquartered in San Diego, it has been great for recruiting local talent, and I hope it will be my last stop.”
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