Live Oak Capital Partners is a private equity firm focusing on control investments in lower middle market companies. Founded in 2013 and headquartered in San Francisco, Live Oak Capital has raised over $500 million of capital across two funds. The firm invests in business services, healthcare services, and technology-enabled services companies typically with $3-10 million of EBITDA. Live Oak Capital takes majority stake and partners with existing management teams to accelerate growth. The firm has extensive experience in the following sub-sectors: IT services, healthcare IT, healthcare services, pharmaceutical services, insurance services, financial technology, and business process outsourcing. Live Oak Capital has been an active investor with 16 platform investments completed to date.
Investment Strategy of Live Oak Capital Partners
As a private equity firm, Live Oak Capital Partners focuses on control buyouts and recapitalizations of profitable, lower middle market businesses across North America. The firm looks for established companies with $10-40 million of revenue and $3-10 million of EBITDA. Typical equity investments range from $10-25 million. The ideal business profile that Live Oak Capital seeks includes: (1) Niche market leaders: Market leaders in defensible niche markets with sustainable competitive advantages and high customer retention rates; (2) Companies with recurring revenue streams and predictable cash flows; (3) Businesses with opportunities for organic and acquisitive growth: Live Oak Capital leverages its extensive network and relationships to assist with add-on acquisitions and accelerating growth post-investment; (4) Strong management teams: Live Oak Capital partners with proven managers and provides operational support to drive performance.
Investment Sectors and Portfolio Companies
Live Oak Capital Partners invests across three sectors: business services, healthcare services, and technology-enabled services. Its portfolio companies in the business services sector include legal services, insurance services, and outsourced business services. Healthcare services investments focus on pharmaceutical services, physician practice management, and other niche provider models. The firm’s technology-enabled services portfolio includes financial SaaS and IT services businesses. Notable portfolio companies of Live Oak Capital Partners include IntelliCentrics, acquiring physician staffing and credentialing companies focused on delivering technology-enabled healthcare staffing solutions to hospitals; Ceribell, developing rapid EEG medical devices for the intensive care unit; and A-LIGN, providing cybersecurity, compliance, and assurance services.
Investment Team and Fundraising
Live Oak Capital Partners was founded by veteran private equity investors Rick Bagge and Tom Martin. Rick and Tom worked together for over 15 years at the private equity group TH Lee Putnam Ventures prior to founding Live Oak Capital. The two lead an experienced investment team with 40+ years of cumulative investing experience. The firm has a lean model and leverages a network of operating advisors to assist with due diligence and driving post-investment value. Live Oak Capital has successfully raised over $500 million of capital across two funds, Live Oak Private Fund I and Live Oak Private Fund II. The first fund closed on $265 million in 2013 and its successor fund held a first close on $275 million in 2018.
Investment Performance and Distributions
As of March 2022, Live Oak Capital Partners has invested over $400 million of equity capital into 16 platform investments, primarily based in North America. Over its two funds, the firm has realized 9 investments and generated gross distributions over 2.0x multiple of invested capital. Notable realizations include IntelliCentrics, sold to Elepheus; Auto Data Direct, sold to IHS Markit; andarxiv, sold to Litera. Live Oak Capital has demonstrated strong performance across its two funds, as evidenced by its successful fundraising track record and growing LP base which includes fund of funds, pensions, endowments, and family offices.
In summary, Live Oak Capital Partners is a San Francisco-based private equity firm focused on lower middle market control buyouts across three sectors: business services, healthcare services, and technology-enabled services. The firm pursues a partnership-oriented investment approach and provides significant operational support to drive growth and performance. With a successful investment track record across two funds, Live Oak Capital has emerged as an active investor in U.S. lower middle market private equity.