Having a dedicated US team with focus enables Inflexion to effectively support its portfolio with an expert, local presence to turbocharge growth in one of the world’s largest markets.
When Inflexion decided to establish a permanent presence in North America, it was not to chase primary deals or simply plant a flag. The ambition was much more deliberate and targeted: to support transformational acquisitions for a select group of portfolio companies, enabling them to scale in one of the most attractive yet fiercely competitive markets in the world.
Inflexion’s network led the firm to Ben Meyer, who brings deep experience in building US platforms for foreign-based investment firms. “This is essentially my third experience building a US-based practice for a foreign firm,” Ben explains. His perspective is supporting the very deliberate approach behind Inflexion’s New York expansion, with the East Coast location chosen for its depth of talent and workable time difference with London.
Crucially, the expansion is not about pursuing new standalone platforms. The focus is firmly on transformational add-ons for existing portfolio companies – transactions typically ranging from $75 million to $400-500 million in enterprise value. “We’re not trying to do primary deals in the US. This is about supporting our companies as they make transformational moves to enter the attractive North American market,” Ben says.
And for this, a local presence is the best approach from a long-term perspective – and one that Inflexion has trod before: part extension of Inflexion’s practice of expanding in Europe by ensuring the culture is on the ground permanently with a local network; part like Inflexion’s country experts in Asia and South America in that it’s about supporting the portfolio with proximity – crucial owing to Inflexion’s hands-on approach. “Importantly, we will bring individuals over to the US team from the Inflexion UK office to help provide Inflexion know-how and connectivity as well as hire local US professionals with relevant experience – two of these individuals have worked with me before,” says Ben.
At its core, the model reflects a simple philosophy:
We’re trying to create transatlantic champions. These are companies that have real reasons to exist in North America. Our job is to help them scale in a thoughtful, hands-on way.
The appeal of the US market is obvious: a vast economy with a single currency, familiar legal structures, and strong transatlantic ties. “There are commonalities between the UK and US – not only language but in many ways the legal and business frameworks,” says Ben. “And while there are certainly differences, they’re far less pronounced than in many other geographies.”
But the very attractiveness of the US makes it hyper-competitive. As Ben puts it, “The US is the deepest capitalised private equity market globally. It's where private equity was born. There’s a huge volume of deal flow – but that brings an equally high level of competition.”
Focus on success
For that reason, Inflexion has no intention of trying to cover the entire landscape. “You really need focus,” Ben stresses. “Otherwise you risk spinning your wheels.”
Rather than attempting to support its entire portfolio of over 60 companies, Inflexion has narrowed the mandate for its US office down to a tightly curated group of eight companies. These are businesses with clear North American ambitions and the operational capacity to scale through transformational M&A.
“The way we approached it was very objective,” Ben explains. “We looked at factors like size of the investment, recency of investment, M&A as core to the thesis, whether the company had strategic reasons to exist in North American and whether the company had a corporate development capability.”
That filtering process produced a shortlist of what Ben calls the “core” companies, with a couple more sitting on the periphery.
He feels this focus allows the team to be properly embedded and create proof points over the next three years. “Trying to do M&A as a tourist acquirer is simply not the same as being a native on the ground who can strategically cultivate and manoeuvre consistently,” Ben says. “This is about being close enough to management teams, advisers, and opportunities to cultivate relationships in real time, as proximity matters.”
Transformational US acquisition
The first US team proof point is already in place: Ocorian’s acquisition of E78 Fund Solutions, which the US team helped get over the line. The provider of corporate, fund and fiduciary administration services was carved out by Inflexion in 2016 and has grown through substantial M&A to now operate from 20 key global jurisdictions.
“My role wasn’t sourcing E78” he comments, pointing out Ocorian’s strong internal corporate development team. His was more about localised cultivation. “Being on the ground provided the proximity to help evaluate (and cultivate the relationship with) the management team face-to-face, navigate local legal and deal nuances, and bring an American lens to the process,” he explains.
Ocorian will combine the E78 team with its existing global fund services business, which together will comprise more than 700 fund services and regulatory and compliance experts.
With E78 Fund Solutions now closed Ocorian is considering further M&A in the US with the support of Inflexion.
