Investment Overview
LCM provides patient capital in a range of investment scenarios where people, purpose, process, and profit all matter
Patient, Purposeful, Flexible
LCM is focused on growing its diverse investment portfolio while investing for compounding, risk-adjusted returns across investment cycles. The team seeks to avoid unnecessary risk exposure to any single company, sector, industry, or asset class.
In addition to its return objectives, LCM seeks sufficient flexibility for adapting to various market conditions, and exhibits flexibility in investment structure and duration. Importantly, the LCM team makes a concentrated effort to evaluate the people involved in each investment we consider, and how all stakeholders can find purpose and profit in our shared work together.
Although open to investments in various stages and structures, LCM most often considers preferred equity direct transactions or co-investments in growing, lower middle market companies with an established operating history, healthy business model, differentiated market presence, and a motivated leadership team with shared values for a thriving culture and a shared financial commitment to the future success of their business.
Occasionally, LCM will take a GP stake to help launch a financial services platform, or provide seed capital for a high growth potential start-up. These direct investments most often involve a high level of engagement, Board service, and a long-term approach to partnership and providing creative capital solutions.
Private Investment Considerations
LCM’s Portfolio Team takes numerous factors into account when assessing each potential partnership, including the following:
People First
LCM partners with high-performing teams comprised of values-aligned people. We look for talent with a proven track record of success and the strategic and operational focus to maintain results for the long haul. At the end of the day, businesses succeed or fail on the back of the grit, character, and execution of their leaders.
Compete to Win
We look for businesses with defensible economic moats and competitive differentiation that leads them to compete and win in the marketplace. Our portfolio companies have favorable positioning and sustainable competitive advantages, and they are held accountable to execute on their key strengths and core strategy.
Deal Alignment
Our firm’s history is rooted in value-oriented investing, and our team negotiates terms and security structure that aligns investors and management to the execution of a shared vision.
We aim to protect downside risks for our capital, but that is balanced with seeing management empowered, incentivized, and sharing in achieved outcomes.
Human Flourishing
LCM is driven by core values of excellence and stewardship for the glory of God and the good of man. Faith-driven spiritual impact, as well as other social impacts, are considered. LCM portfolio companies view culture as a competitive advantage and scale businesses that delight all stakeholders—employees, families, customers, vendors—and inspire others.
Conviction and Influence
LCM partners with businesses where we gain conviction on what needs to prove true to succeed—in the company’s market, finances, product, and people—and we assess what our role is to help get there. If we can’t add value directly, we identify those in our network or in the investor group who can. Once invested, we broker our influence to contribute to that company’s success.
“For I know the plans I have for you,” declares the LORD, “plans to prosper you and not to harm you, plans to give you hope and a future.”
Jeremiah 29:11
Representative Private Investments
2023
"Ink on paper to impact Eternity," LCM led a buyout of Christian publisher and homeschool curriculum provider, New Leaf Publishing Group, at year-end 2022.
LCM created a holding company, 226 Publishing, to serve as a platform for the firm's growing interest in supporting homeschool tailwinds. LCM joined a small group of like-minded investors to parachute in a new CEO, build the Board, and make a long-term investment in this multi-generational, family-owned business. Both participating preferred equity investment and some common equity ownership align LCM for a long-term, value-add role as lead investor in New Leaf.
In addition to attractive investment merits, 226 Publishing will drive meaningful contributions to human flourishing through a sustainable, cash-generative business with more than 50,000 individual customers purchasing homeschool curriculum, reaching 100,000+ students annually, and growing. Partnering with parents/teachers to holistically educate their children/students, LCM sees significant opportunity to make a meaningful impact through the publisher’s reach and influence to shape a child's education.
EXITED (2021)
Specialized commercial lender for rural-based companies utilizing the USDA Business & Industry (B&I), Renewable Energy for America, and other various U.S. government guarantee programs for development loans of up to $25mm.
LCM made an initial preferred equity investment in helping launch NAC, followed by subordinated debt in support of the company’s rapid growth, and was a purchaser of loan participations of the unguaranteed portions of various direct loans. A representative of LCM served as Chairman of the Company’s Board of Advisors until its sale to Veritex Holdings, Inc. (NASDAQ: VBTX). NAC now operates as a wholly owned subsidiary of Veritex Community Bank.
During the hold period, NAC grew to become the largest USDA B&I lender in the country, growing loan originations to over $300mm and impacting over 6,000 jobs.
EXITED (2014)
Data and telecommunication service provider utilizing cutting edge IP-based network broadband, cloud computing, and information technology services to small and mid-sized businesses across the U.S.
Cbeyond launched in 1999, raised $141mm in Series A funding with lead investor Madison Dearborn Partners in 2000, IPO and listed on the NASDAQ in 2005, and subsequently acquired by privately-owned Birch Communications (now Fusion Connect) in 2014 in a take-private transaction.
LCM Group provided start-up capital to launch the business in 1999, and subsequently provided additional capital alongside Madison Dearborn Partners in the Series A in 2000. An LCM representative served on the Board of Directors from 2000 - 2014.
EXITED (2014)
Concrete products manufacturer based in Brooksville, Florida. Products included a portfolio of concrete paver designs, turf block, and engineered retaining-wall block. The business was launched in 2001 and after continuous sequential growth with follow-on investment opportunities to fund expansion for the following 13 years, the business was sold in 2014 to the leading concrete products supplier in the Southeast.
LCM Group provided start-up investment capital to back an experienced manufacturing entrepreneur, and then provided additional growth capital to expand the business, including an expansion to a second manufacturing plant. A representative of LCM served on the Company’s Board of Directors.