Strategy
Our investment approach is not a formula — it is a philosophy applied with discipline across every acquisition decision, capital allocation choice, and operational engagement.
Investment Approach
LSG targets the acquisition of founder-owned, lower middle-market businesses that deliver essential services in infrastructure/energy and healthcare. Our investment thesis rests on three structural advantages: demand inelasticity, competitive moat durability, and the compounding power of patient reinvestment.
We do not operate with a fund lifecycle. Our capital structure is permanent, which means our operational decisions are made on a 10–30 year horizon — not the 5–7 year window that constrains traditional private equity.
We acquire an initial platform in each sector, then execute add-on acquisitions to build geographic density and service breadth.
We partner with existing management — not replace them. Our role is capital, governance, and strategic support.
2.0–3.5x EBITDA. We do not optimize for financial engineering. Cash flow resilience is more valuable than marginal return enhancement.
We target 4–7x EBITDA entry multiples. We walk away from overpriced deals regardless of strategic fit.
Acquisition Criteria
Lower middle market sweet spot — large enough for institutional operations, small enough to avoid crowded competition.
We target businesses with high FCF conversion. Capital-light models preferred.
Maintenance contracts, service agreements, and recurring demand cycles. We avoid purely project-based revenue.
We favor businesses with dominant market share in their specific geography — competitors who know the territory.
Sector Focus
We concentrate capital in two sectors not because they are fashionable, but because their demand characteristics are structurally durable across economic cycles, demographic shifts, and technological change.
Underground utilities, electrical infrastructure, water/wastewater systems, energy services, and the contractors who maintain the physical substrate of American civilization. These businesses serve municipal governments, utilities, and industrial operators — customers with non-discretionary capital budgets and multi-decade maintenance obligations.
Outpatient care platforms, behavioral health, home health, and ancillary healthcare services businesses that deliver care in community settings. Healthcare demand is structurally growing, driven by aging demographics, chronic disease prevalence, and the ongoing shift from institutional to community-based care.
Long-Range Vision
LSG 2050 is our 25-year vision for what this firm becomes when the permanent capital philosophy is executed with discipline across a full generational cycle. It is not a marketing document — it is an operational blueprint for building an institution that will outlast its founders.
Establish corporate governance, build advisory board, develop capital formation strategy, create institutional-grade diligence and operational frameworks. Identify and evaluate first platform acquisition candidates in both sectors.
Close initial platform acquisition in infrastructure/energy services. Deploy operational playbook. Begin add-on pipeline development. Establish initial healthcare services beachhead. Target: 2 operating platforms, $8M+ combined EBITDA.
Execute 6–10 add-on acquisitions across both sectors. Build geographic density in target markets. Begin cash distributions. Develop proprietary deal sourcing channels. Target: $30M+ portfolio EBITDA.
Mature portfolio businesses become cash engines that fund subsequent acquisitions without external capital. Selective platform sales where strategic value has been maximized. Target: $75M+ portfolio EBITDA, self-funding acquisition program.
A diversified portfolio of essential services platforms — each a market leader in its geography and vertical. Permanent capital structure maintained. Multi-generational. Target: $200M+ portfolio EBITDA, 25+ operating companies.
Capital Structure
Long-term equity capital in LSG's holding company structure. Aligned with the permanent capital thesis — investors participate in the full compounding of the portfolio over 10+ years. No forced-exit provisions.
Deal-specific preferred instruments providing preferred return and downside protection. Used to bridge acquisitions while permanent equity is raised.
Conservative senior debt from bank or non-bank lenders. 2.0–3.5x EBITDA cap. We do not layer mezzanine debt onto essential services businesses with cyclical revenue exposure.