Episode 88 Emily Holdman, Permanent Equity

Emily is a Managing Director at Permanent Equity, a St. Louis-based private equity firm that his made its reputation as its name suggests – by investing out of 30-year funds that enable longer term holds and relationships with founding entrepreneurs.  Emily and the hosts sail through her childhood in Indianapolis, college as a journalism major at the University of Missouri and a first job in marketing in Los Angeles.  There, she connected with Permanent Equity founder Brent Beshore, returning to the Midwest and joining the firm in 2009.  Much discussion ensues on how the Permanent Equity model differentiates the firm in a market largely defined by investor liquidity requirements. Emily also has the misfortune of dealing with the hosts after a spring layover.  Rusty?  No.  Bristling with sports rivalries and other resentments ?  Always. 

Transcript

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Andy, nice to see you. I saw all over your LinkedIn feed about 97 posts from your time in Las Vegas at Dealmax. That looked exciting. Sorry to miss it. It was great. Your absence was remarked upon by people who know both of us. Yeah, that's exciting. But we just wrapped up a lovely conversation with Emily Holdman of Permanent Equity. A friend of yours, new friend of mine. Last lovely conversation. Sharp mind, bright mind, active mind. What'd you think of the conversation? It left me cold, honestly. Well, as you say, I've known Emily for a while. Think of her as one of the younger stars of our profession. So it was great to catch up with her and hear about the permanent equity story. And as we said at the beginning, by being a fund organized for longer hold periods, Permanent has a differentiated take on the market and One Response to Higher Valuations and More Competition I've often said, and you've heard me say many times, the world doesn't need another middle market equity firm and if you wiped out half of them tomorrow, the world wouldn't miss a beat. But you know, it's nice to hear about these differentiated models, these long hold funds that are formed to really focus much more on capital appreciation and allowing a business to stay in the hands of the folks that founded it. There's many different ways to go ahead and invest institutional capital, theirs being one of them. I also particularly liked our exchange on proprietary deal flow, which in 2026 certainly means something different than it meant 20 years or so ago. Yeah. And you know, at the risk of complimenting you in this short overview, my takeaway in that discussion was that firms like Permanent Equity and New Heritage Capital can be more generous, more philosophical about there being a limited auction rather than a one off because you're confident that you have a differentiated approach. And a best in class approach can stand up better to comparison shopping. For sure. For sure. But Andy, you know, before we start, I don't know if you know this, but when it comes to maximizing the efficiency of an M and A deal, no one does it better than SRS AC. Since 2007, SRS Acium has brought unmatched expertise inside an innovation to deliver superior escrow agent, paying agent and professional shareholder representation solutions, 88% of top global private equity firms and 84% of top global venture capital firms have worked with SRS Acium. To learn more about how SRS Acium is the smartest way to run a deal, head to srsaquium.com that's SRS A C Q U I O M dot com we hope you enjoy today's episode of Middle Market Musings. Emily Holdman, Permanent equity. From the gateway to the west St. Louis to the distinguished studios of Middle Market Musings, welcome. Thank you. Great to be here. Well, we're, we're glad, we're glad to have you here. It's been a little while. Charlie and I have both been out and about traveling. So, Charles, it's good to see you. Also nice to meet you. Emily. Thanks for joining us. Likewise. Charlie is smarting, as they say, because he's from Boston. I'm from Philadelphia. Boston has gotten the lion's share of the sports bragging rights in recent years. But the other night there was a seventh game in the NBA playoffs and the Sixers rose to the occasion and ended the Celtic season. This is more about a rivalry issue and him wanting to get past it. I can see where this is headed. I will remind everyone when the topic of basketball came up earlier on a previous episode, Andy's like, yeah, I don't really pay attention to basketball. I have no further comment about that series. I'm going to channel my inner Marshawn lynch and just simply say, I'm just here so I won't get fined. Oh, geez. So, so, Emily, you have of course spent most of your career with permanent equity. Very fine. What I've described as a long hold private equity fund in Singapore, aptly named. Yeah, the. Well, you know, I was actually, I was hoping that your maiden name was Long so then refer to you as Emily Long Hold Man. Good God. That would have been very clever. Ultimately. Didn't know this is where I was going to end up. But it would have been, that would have been great if that would have worked out that way. Andy, do you have somebody that writes those A plus jokes or they just come spontaneously? They just, it's, it's, it's the layover. It's the layover. So like last week I was at, I was on the West Coast. I was at the Omax in la. Charlie was off in Capri. So, you know, I had time while I was traveling to think of these. I don't even know. I don't even know where Capri is. Could I just, I, you know, I, I like the juice box, the Jersey. It's just off the Jersey shore. You can, if you squint, you can see it. It's a little island in the middle of the Atlantic. It's beautiful. When your kids were young, those that, that good, that good Capri sun juice in the pouch, you know, a little. Yeah, that's what it's, that's what it got its name from. First. We had a bunch of them yesterday at a lacrosse game for my daughter's team. So I know your daughter's 10, so what? Yes. Has she been playing lacrosse for a little while?

She has. She's been playing for two years and it's been, it's been a fun sport for her to get into. I'm quite tall, so I'm 6: 6:19

1. So she plays basketball as well, and I think, think that's probably ultimately where she'll end up. But lacrosse is kind of the equivalent of the soccer team. And she didn't like soccer, didn't find it that fun, and by comparison, has very much leaned into lacrosse. And her dad was a hockey player. And the setup of the field is not dissimilar. And she likes, as she's gotten older, she likes checking, so definitely got some of her dad in there. Don't ask me why I, I, I think this, but I have the idea, I mean, maybe just periodic trips to St. Louis, that St. Louis is kind of a lacrosse bastion in, so away from, away from the East Coast. Right. It's true. It's grown quite a bit in the Midwest. I think holistically, there's a good cohort in like Michigan and Minnesota as well. So we actually live in Columbia, Missouri, so we're about two hours away from St. Louis, which is for, to your point, six, somewhat unfortunate for lacrosse because we have one club here and we've got to do all the traveling to go see everyone in Kansas City and St. Louis to play. But in St. Louis, they have quite a lacrosse cohort, especially for the girls, which is awesome because, you know, on, on the spectrum of sports, it's a sport that takes a lot of different types of skills, but also crosses over nicely into so many other activities. So you've got sort of the endurance piece, but you've also got the skills development, the team atmosphere, all of those things. And so for those purposes, a of the girls have started playing, and we're excited about that because it's actually a sport that I think is a good foundational way for girls to, you know, get confident, develop an understanding of like, spatial awareness and also figure out how to work as a team. Yeah, it's a great, great game. So. Well, let's, let's go back to your childhood. You ended up, moved around a little, ended up in Indianapolis. Yep. Grew up in mostly Indy, was born in Dallas and Indy at that point in time was still reminiscent of a farm town. Like, I still had cornfields by the house that I grew up in, but we. We just had, like, a normal, normal, everyday childhood. But for the most part, my dad worked in transportation. He traveled quite a bit. And I just got to grow up around a combination of entrepreneurs, farmers, and people who, like, really, I don't know. I did have, like, the classic 80s 90s childhood. So all the things that have come up lately and the memes about, you know, being offline, being outside, riding bikes, picking blackberries, like, those were legitimate things we did as children. And I think it served us well both in terms of just being able to, like, go out and, you know, pay attention to the world around you and also, like, a sense of adventure. So it was. I was blessed. I had a good childhood. So you're a journalism and econ major from the University of Missouri. Right. How did you end up at Mizzou? Was that a foregone conclusion or. It was not. I mean, I really wanted to go far away. So by the point that I went to college, my family had moved to St. Louis, and so I went to high school in St. Louis, and I wanted to get as far away from the Midwest as possible and develop my independent identity. And so I really wanted to go to the East Coast. And I had several schools that I had prioritized as being really important. And my mom was strategic in how she played it. She said, just apply to Mizzou as, like, a backup. And I did. And the economic package there was incredible because I got to go to school for free. And she said, it's okay. You can still look into these other schools. And then she took me to do my tour of Mizzou the week before declaration weekend. And if you come to Columbia in the spring, it's absolutely gorgeous. And it's, like, the most ideal time to see Mizzou's campus. It's beautiful. The flowers are blooming, everyone's outside. And it just has that old, classic university feel. And so I came and I said, this is actually magical. I will love this. And then the next December, I did call her and say, that was tricky. I saw what you did there. But I really enjoyed my time nonetheless. It was a great place to go to school. And, yes, and the journalism economic double major thing was really just a combination of interests. And then Mizzou is known sort of nationally for its journalism school. And so there was a good rigor to that program. And I think over my career has served me well just in terms of being able to communicate. Communicate. As Charlie knows, I was a student journalist in college, worked on the daily newspaper, and I. I think of that as great background that extends into our work. Talked before about the quality of curiosity. It helps to be curious, but it also. Journalism is about the compulsion to get the story, to find out what. What the answer is. And you gotta pound pavement. You've gotta do primary research. You've gotta pull in lots of perspectives and realize what's an anecdote and what's statistically relevant and also sort of what's important for the reader, which is a sort of interesting, nuanced process at the end. Right. And then so 20 years later, when you're analyzing a business and they come in and they say, well, you know, we're not just a chemicals company. We're also a chemicals management company. Is that true? You know, you get the story. Right, right, right. Well, the story part of it, narrative building is always really fun, but also it's a little bit of. I don't know, I think. And you probably know this to be true. Andy, like to ask good questions, you actually have to be interested in the answers. And so it's like the. The irony is, like, you spend an entire semester at the journalism school in a class that's called news, and your responsibility every week is to go out and get a story, and it has to be a material story, and you've got to be able to ask the questions and really want the answers. And in that, you know, I sort of laugh sometimes when I go into a site visit now because you're basically hosting the same kind of conversation. It's just that the person sitting on the other side of the table actually wants to be there most of the time. Compared to sometimes when you were trying to get a story in college, they didn't want to talk to you. Emily, what you said about, you know, asking questions, that you're really interested in the answer. I did. I couldn't help but notice that Andy wasn't writing down and taking a note of that, because I think that's really important as a podcast host as well. And sometimes he misses the mark in that. But when you graduated from Mizzou, did you tell us jokes? Charlie, every once in a while, there's just got to be a joke. I will generously say that. Don't you think that whatever baseline we were both at 80 odd episodes ago, don't you feel like we both have gotten to be better listeners and questioners? I'm sorry, I wasn't listening to what you said, I was thinking about my next question. Emily, when. When you graduated from Missouri, you're going to be great. Did you ever think that you'd become a managing director of a middle market private equity fund? I mean, what was the grand scheme to my career aspiration? Charlie? I don't think I knew how private equity, nor the titling. So no, that was not what I was after. I mean, honestly, I have always just really enjoyed understanding, like how businesses function and understanding how specifically to grow them, which is what led into initially I went into advertising and marketing. And so as you can imagine, sort of the allure there was like, how do you grow revenues within a company? And so that was initially what I was interested in. And there were interesting job opportunities as a result of the journalism school. They had a lot of associations with different agencies around the country. And so that kind of was the pathway that I thought I was headed down. And I did start my career in marketing services. So I met Brent, be sure, who is the founder and CEO of our firm, Permanent Equity. And I met him because he had started a marketing firm and that marketing firm had gotten into commercial production, which was sort of the overlap of where I had started my career career. And I found a news article about him and reached out and said, what in the world are you up to in the middle of Missouri? And I had. My future husband was here. You were based in LA at this point? That's right, yes. And my future husband was here. So I had other personal reasons why I wanted wanted to potentially move back. But I found this article, reached out to him and we ended up having a multi day email exchange followed by him saying, come out, let's have a conversation. And that was in 2009. So it was not a time where people were on, on the whole hiring or entertaining people whose job description was sort of unknown at the time. And so I came and met with him and he said, okay, let's do this, come to work and we'll figure out something for you to do. And so the initial job was something around at the time it was called new media, but like technologies, social websites, those kinds of things, and came to work for him. And that was kind of a crazy journey. But we ended up getting approached about buying a business within nine months. And so the transition to getting into M and A was incredibly organic and serendipitous, but not intentional by anyone's part. And the cool part was he used an SBA loan to buy that first company. They said they were in Marketing services as well, which is why the introduction had been made. But really they were a government services contractor. So they recruit physicians and nurses for the National Institutes of Health and branches of the military under long term contracts. So it's fundamentally different than the project based work that we were doing. But it had been a business for over 20 years, had great long standing relationships. And once we got involved in that business and we were on the cap table and we could influence how decisions were being made within the organization, nothing we did was rocket science, but it did materially improve the bottom line of the business in under two years. And we paid back the SBA early and we could kind of continue forward in building that business. And we still own it today. So it's a St. Louis based business and it's one of those stories like I refer to it as the little engine that could. It's a business that could have gone off and done a bunch of other things, but they are exceptionally good at doing this thing. And we refer to that as small but important. But it's been clarifying over the years that like the businesses we love the most and the ones that we can steward the best long term are small on a relative scale, but really important and critical to the line of work that they're in. And it was an epiphany for us to stop being a service provider and to look for other companies we could get involved in and help support long term. You shared a lot there and there's a lot to get to. But before we talk about permanent equity and how you all look to differentiate yourself, and I think it's an important component of the conversation we're going to have before we get there. I just want to ask a question. When you were just sharing what you just shared and in 2009 you were introduced to Brent, what did Brent see in you that led him to think it says, Emily's the type of person I want to build this enterprise with. You didn't have the traditional banking or private equity background. What did you bring to the table? Well, number one, I think he hired me as a young kid. It was not that we were going to set out to become partners from day one. And I think that the other side of it was it was a sparring match. So I still give him grief about this 17 years later. But we, we sat down for what I thought was going to be like a 30 minute informational interview and I think we talked for about four and a half hours. And it was a sparring match. It was just like, what are you interested in? What do you think about this? How do you look at this? What would you do here? What kinds of clients would you be interested in working with? And like, and his energy level is still exceptional. And it's one of the things that he does best is like, he's really great at identifying talented people and motivating them to go out and do things. And in that way, like, I got sparked with all kinds of ideas just by meeting with him. So I was excited and I think he is really good at taking options on people to see what they can set out to achieve. So Emily, when you joined in 09, what did the firm look like? How many people were there? It sounds like you were focusing really on the front end more on a deal by deal funding model, is that right? So at that point we wouldn't consider ourselves to have been truly investors at that point. He was an entrepreneur. He had started several companies and so the holdings were really what you consider to be a founder's holdings of companies. Right. And then we were approached about buying that first company. So there were about 30 people that worked for the ad agency that he had started and he had another entity that was relatively small with a handful of other people. And so there was a team, but that team was very much practitioners within the marketing space. When we invested in the, the recruiting firm, then he began to travel almost daily to go into St. Louis to work on transitioning that company because the reason that it was being sold was that the founder wanted to retire. And, and so he ended up driving in and I ended up stepping up into leading larger and larger parts of the marketing firm that he had originally founded while he was doing that. And so we did that for, you know, about 18 months. And the epiphany was really that nothing was rocket science and that we had identified that there was an exceptional team that needed long term stewardship. They didn't want to go anywhere. They were proud of the work that they did. They had developed a reputation over the long term and their founder simply wanted to separate his personal life and be able to retire as anyone might want to do, but still see the business continue on without him. And that was an epiphany in and of itself. But the other fact was we had materially improved the business over that time. And it wasn't doing anything, you know, sort of specific or detailed. It was just doing some basic understanding of what are functions you all want to do, listening to the people who worked there about ways that they thought things could be Improved upon and being, you know, strategic and understanding how to prioritize opportunities that sat in front of them. And so based on that, we said there have to be more companies that look like this. And so that was sort of led into the curiosity of looking at a lot of things now. The timing was interesting because it was, you know, by that point, 2011, and so things were coming out of the Great Recession. Permanent equity is often described as doing private equity without the typical exit pressure. How would you explain your business model in a few sentences? So permanent equity invests with no intention of selling. In private companies that care. What happens next is the way that we refer to it, ever selling, no intention of selling. So it doesn't mean that we will never sell, but over the course of the firm's history, we've sold one company. So how do investors think about when they give you X amount of money to invest in private companies? Is it a distribution type of payback or how do people, how do your investors think about giving you money in the return that they hope to earn? So we refer to it as beer money. And beer money is the money at the end of the day that can be distributed out based on the profits earned. And the way that we operate companies is to invest again with the intention that we are not looking for who will sell it to next, but intend to operate it and see it grow over the long term. And that's the stewardship model that we abide by. And as we do that, we make distributions. How do people think about the return on principle? I mean, at some point they want to know that the bar is going to get sold. It's true. But honestly, depending on the profitability levels of the companies, you can see that done without selling. It might take some time, but it can still be done. And the other side of that that's true for us as well is we're not using third party leverage in our transactions. And so the balance sheet is ours to work with post close. And that means that we can make material reinvestment. We are not otherwise obligating the company based on the transaction. So we have optionality in that regard. But it also means that we can make material distributions and certainly if the business grows alongside that sort of balance sheet makeup, we can pay back the principal. How many companies are in the portfolio right now and is it all, I assume it's all control investing, is that right? That's correct. So all control oriented investing. And we have 15 companies in the portfolio today. So like I said, we've sold One company, and we actually just sold it earlier this year, so that was a big milestone for us. I bet they say it's better to sign checks on the back than the front, and I kind of like that, too. It was. It was bittersweet, but it was good. So I just want to go back to core competencies. At the beginning, you were talking about your background a little bit on Brents. A lot of people in our field take it as an article of faith because it's their background that to get into this, you need to have a grounding in accounting, corporate finance, business school, or another setting where you're trained in evaluating business models. I mean, it sounds like you all had other skills. You didn't have that. How. How did you think about either backfilling or sidestepping the traditional private equity approach? So, I mean, we still have a pretty eclectic team. Our CIO was a playwriting major in college, so it's still very much made up of people who came about their positions through being deeply curious and just trying to understand things on a first principles basis and also trying to use whatever skills and experiences they've had in the best interest of the companies. And that comes in a lot of different flavors. Right. But from the standpoint of, like, we've never been to sort of like, distill down what you're saying, Andy. We've never been like, spreadshirt, spreadsheet first people. The spreadsheets are there. And we abide by all of the normal rules today. But to be quite honest, when we started out, we did back of the napkin math. If it didn't make sense on the back of a napkin, we weren't going to do it because we weren't trying to believe that we were smarter than we were. If it didn't make sense and you couldn't pencil it out, we just shouldn't do that deal. The nice part was we really did that, you know, that studying, if you will, that most people do in a business school, since we were doing so as entrepreneurs and operators on the heels of the Great recession. So between 2009 and 2015, you could get quite an education in multiple ways. And the nice part for us was that we were also looking at hundreds of companies every year during that period. And we did three deals in 2015 off of our balance sheet. They were all companies that we started to get to know in 2012. And so we followed those companies for three years, getting to know them, them getting to know us and seeing how they performed and whether or not we could understand how the cash flowed through the organization, how they made money, how they increased their market share over that time. And we gain that confidence while they gain confidence with us. And certainly we paid more in 2015 than we would have paid in 2012. But that education was happening. It just was in the real world. Emily, when you bring in, when you transact with an owner, what percentage of the time does that individual that was in the first seat at close is in that same first seat, you know, call it five years down the road. Are you really buying into their vision and empowering them or are you really viewed as change agents to help people kind of accelerate the growth? So I would say it's about half and half. So it's about half what we would refer to as legacy transition. So really working through a succession plan so someone can take steps up and out of the business for personal reasons. The other half of the time we are partnering and we call that a growth partnership. And the partnership model is that that person intends to be with the business long term and they're not looking to go through a typical three to five year, you know, sort of consecutive hold cycle. Right. They want one partner that they're going to have for a longer period of time. And in both of those scenarios we can be really helpful. It's just a question of like, what are, what is their motivation in going to market in the first place? You are listening to middle market musings brought to you by Greenberg Variations Capital and New Heritage Capital. Emily, I'm curious to know in 2026 what your funnel looks like, because it's striking us that there are particular through lines that you look for in businesses that are fit with those two approaches. But my guess is you see a lot of companies where the owner isn't long term oriented, the valuation is too high, it's going to be more of a market clearing, exhaustive auction, whatever level of detail you're comfortable. How many deals are you looking at in a year these days? And how do you think about the way it funnels down? I mean, we look at a lot of opportunities throughout the year. So we keep in touch with a broad network of advisors and we see things that are marketed in the typical functions. But most of those advisors also know sort of what we stand for and who we work best with. And you know, the tagline of the firm is stewarding companies that care what happens next. They typically are going to call us when they know that they have a founder or a family owner who is going to care about more than just the enterprise value headline or more than just the cash at close. And there can be complexities to that situation beyond that, but typically it's going to be the combination of those two factors. They still care about the economics, they still want to be, you know, for a fair deal to take place, but they care about other elements as well. And so the truth of the matter is, you know, 8 out of 10 times the owner will say, I care about everything as long as you're also the highest price. Right. But there is the model whereby people say, no, my family, you know, has been here for multiple generations. We're a community employer. We want to remain a community employer. And I am not going to, you know, and this is not fair for most owners to consider it this way, but they will say, I don't want to selfishly walk out the door and leave everyone else to sort of deal with the aftermath. I want to do so in a way that honors, you know, sort of the loyalty that they've had for, for me. And those are the situations where we are going to be the strongest fit. And so, you know, the advisory community we've gotten to know over the years certainly knows us for that. We also believe that private equity should be more of a direct to seller, direct to owner, you know, funnel. And so if you go to our website, we have a lot of content and a lot of tools that are meant to sort of peel back the curtain of like, how private equity grows businesses and what, what are the things that we're good at and why Succession, actually a complicated, you know, sort of endeavor. And those types of things are we do. Because what we find to be true is every owner has a small network of people that they really, really trust. And this is a, you know, any sort of transaction, any sort of transition is going to be something that they only are going to trust those people to have their best interests at heart. Our goal is to make sure those people have as much information as they can and whether that leads to them knocking on our door or on someone else's, because they have clarity of why they're going to market and what they're looking for. Our ambition is that, you know, empower the seller to understand what they're looking for and if, and what they're solving for. And if we can do that, we think we'll ultimately have the best relationship and best set up for a deal. And so it is true that we've also had people who just send us a note and say, hey, I want to talk, and I Think I'm trying to accomplish this and let's see if it makes sense for us to do it together. And those lead to good outcomes as well. You certainly have a different lens than the majority of the market. How do you source? What percentage are represented by the trusted advisor versus what percentage is done more on a negotiated basis? And are there any pitfalls negotiating outside of a process that might test that kind of approach? And I'm asking for. Maybe you've also done that. Yeah, exactly. I'm actually asking for ourselves because we can talk about that, but I'm interested in what your experience has been. Yeah. So, I mean, I, I've had this conversation many times with LPs as well, because everybody hears proprietary deal flow and they're like, oh, that's the best thing you could possibly have. And the truth is, proprietary deal flow is what it is. It's. It's complicated. People haven't made necessarily the same level of commitment and it's hard to know exactly how it's all going to come together. It's a lot more of a harried ground, if you will. By comparison, if we look at, you know, what do we see volume wise? Volume wise, we see the most from the market. Right. Represented opportunities that are being circulated to some population. We sometimes get to see them in a different capacity because we offer a different solution, but we're still seeing volume from that side. But we also get a lot of interactions from people who say, I just want to get to know you. And maybe it's not now, maybe it's two to five years from now. And so again, based on our time horizon, that's great. Based on the typical private equity horizon, that wouldn't be great. So I think there are trade offs depending on the model that you're operating under. We have an entire event called Main Street Summit that we host once a year and it has about 1500 operators that come to it. And they come to Columbia, Missouri and come for three days of kind of a festival atmosphere entirely focused on operations. And we have peer investors around, we have LPs around and we have, you know, operators and owners of companies. And those people are interacting with the purposes of forming relationships that ultimately may lead somewhere and it may involve a transaction, it may not. But for the purposes of thinking about, you know, if you're going to develop proprietary deal flow, how do you do it? My view is it can only be done by actually trying to understand who's sitting across the table from you and developing relationships with them. We don't believe in cold calling. We don't cold email people. You know, we really try to understand, like, how, what's. What's interesting to you. How do we get to know each other? And then over time, if that leads to an opportunity where we can. Can be helpful, we think that might work. I have a question actually for. For both of you. Emily, for you first, and then Charlie, just to refresh you on what my firm, Greenberg Variations, does. You know, the focus is on targeted auctions. The private business, business owner who has a good reason for not wanting to talk to the universe. When we started in 2019, there was more willingness to work with the seller who had identified one buyer and said, I really think these are the people. My, my experience over time is that that's really hard to do even if there's goodwill and some fit. I've just seen a lot of clients get restless, you know, and it's not that good people become bad people or the business logic falls away. It's just they get tired over a few months of hearing about the world according to just one party. Here's how we do working capital. Here's how we deal with the real estate on every deal. And they just want to see more of the world. So from your standpoint, I mean, recognizing that your strengths really play in a limited situation, is being the only game in town optimal or is it better from your standpoint, is it better to be part of a small group? It's a really insightful question, and it's one of the reasons that I said earlier we believe in empowering the seller. I actually much prefer a seller who is extremely literate in the market, may have gone to market and explored many other options and was ultimately disillusioned with the options represented and said, that's not what I want. That's not what I want for the team. That's not what I want for myself. And it's the. Is still searching for something and believes that it, you know, optimistically can be brought together. Right? That's the best version when somebody one shots it. You know, I think that there's. There can be cases where it works, but by and large, you need to know what the other options are so that you don't have seller's remorse if you're sitting on the other side of the table. And for our purposes, you know, we want, we refer to it as like, we want to start in the middle ground when it comes to deal terms and those types of things. But if you don't know what the middle Ground looks like because you've never seen anything else, you know, it's easy for the other side to get skeptical. Right. And to say well that's still too extreme for what we're trying to do. Whereas if you've seen other things that are more extreme, you have a better understanding of what it means to be in the middle. Right. And so for all of those reasons, I would say I would support people understanding some level of the market and making sure that you can see variations on the theme. I mean we are not the only long term holder but the way that we structure our transactions is highly specific to the way that our fund operates and to what we believe needs to be true. There are, there are longer term holders who still put plenty of leverage on companies. Right. And so there are variations on the theme that are worth exploring even if you decide that's what you're optimizing for. But I, yeah, I believe in empowering people to really understand how the market works, what it is and then figuring out what's best for them. And I would say that my. Andy, answer your question. I think proprietary deal flow everybody views is a panacea and it's I think has a very different meaning in 2026 as compared to when I started in the year, I won't tell you which year but it didn't start with a 2 and it used to be. As the market has become more efficient, business owners, I mean how many times you visit a business owner said I could spend every minute of every hour of every day responding to inbound unsolicited interest from equity sponsors that want to invest in my business. And so I think that from our standpoint we like to compete and in Emily, for your benefit we invest in first tranche of institutional capital in a traditional non control with every negative control right in the world. This thing called the private ipo, we focus on long term greed which probably is similar. We have that in common. We're looking at people that say listen, I want to buy your business on non price objectives and I will reward you materially if you can grow and hit your upside case set of growth objectives. But we have a different LP base in that, you know, it's a five and it's a, it's a traditional private equity fund. But from the proprietary standpoint, Andy, to answer your question is that I think that when, if much like if you had an asset that represented the overwhelming majority of your net worth, let's say it's your house, you know, would you sell to the first person that knocks on the door. And the answer more often than not is not really, because I want to do a market check. I want to make sure that I'm maybe I'm not top ticking value because there are other objectives that I want to kind of achieve, but valuation is more often than not going to be the largest pie of that kind of objective pie, if you will. And so we like to have an opportunity to compare what we're offering to that of a traditional 8020 leverage recap. Because there have been instances where we've lost time and money on a one off deal where an owner after three months in saying, how do I know what you're telling me is marketing. And so having that market check I think is important. You know, I don't think it's an accident that both of you operate off of pretty sharply differentiated models. And apart from the fact that, you know, you're both inherently generous, people make the observation that it's easier to be more generous when you feel like your approach is differentiated and you can say, you know what, we're best in class. So yeah, talk to different people, get different looks. And if we're the right fit for you, then we're confident that most of the time we'll end up with the assignment. The more generalized you're offering, the more, as my father would say, you don't want the prospect to see the lights of Paris. I mean, I think that's incredibly true because I do think you have to be confident in what you offer to the market. And I think that if you don't know what you're offering and you're just one of, and you're offering basically capital, there are a lot of sources of capital, right. And there should be more to it than just the money that you're providing. And I think that the other side of it is also true. I very much abide by the 20 hole punch card buffet rule of we should only get involved in things where we can materially be helpful. And so there is a mutual evaluation that should occur where there can be an absolutely phenomenal company, phenomenal team. Everything about it is great. And we might not be the right fit. And it might be for valuation reasons, it might be for operational reasons, it might be because we know a firm that is so good at that specific thing, we want them to end up with the right partner. And I think that is understanding that you're a participant and that you want the best outcomes for everyone and that ultimately over the long term you will do best by only Getting involved in things where you can materially be helpful and helping everybody else to find the right suitor for them. Before you started taping Emily, you mentioned that you all are generalists. In a world that is further embracing industry specialization. Why do you think people choose permanent equity where you may not have the deep domain expertise as some of the other people that you might be competing against? Well, so the, the model that we abide by is we really focus on what we call the taste like chicken layer of what it takes to scale a business. So these are all the back office. I'm sorry, I'm not, I don't know that term. The chicken layer. It tastes like chicken. It tastes like chicken. It's the same everywhere across industries. Right. You've got to be good at incentivizing and retaining really good talent. The ante to play the game, if you will. Okay, yeah, exactly. It's the fundamentals. It's the fundamentals that are the same everywhere. And so those are the areas where we really try to stay focused in terms of being operationally helpful. You can always benefit from growing your funnel. You can always benefit from understanding your unit economics better. You can always benefit from improved systems and processes. There's technology implications to that. And you know, ultimately, as we talked about before, succession planning and really thinking about the broader leadership that it was would take to get to a larger and greater scale are things where we can be materially helpful. The idea that we who are not in the day to day of operations in a particular industry would better understand the nuances of that industry or why they're in the position that they are in inside the market is something that, you know, we just ultimately don't think we have a better perspective on. So what we're interested in finding are the market players who are small but important. They have incredible relationships, incredible reputation, and they sit in a position in the market that allows for them to choose who they want to work with and how they grow. And if we find that type of opportunity, those people know their industry intimately. They may not have the risk profile, risk taking profile at that stage of their career to do some of the things that they know with conviction could benefit the business. And so that's another area where we can be materially helpful. But it's a different mindset of saying we want to be good at stewarding great businesses. They should already be good at what they do. We don't need to tell them how to be good at it, but we can help them to understand that something that they Solve in one way today can be solved in greater scale and capacity by doing it another way as we go forward. Right. And those are the types of things where we try to be helpful. So it's very much a generalist mindset, but it's not without operational tactician. It's just not taking the approach of we have some foresight on the way that the chemicals industry is going to turn in the next 10 years and so we're going to start buying up a bunch of companies in the chemicals industry and saying we have a thesis on it. It's not that. When we were back talking about how you thought of beer money as an index of return, the thought passed through my mind. This may be fair, maybe unfair, that I see this model working more easily on moderately valued businesses than highly valued businesses. Another way of saying that is that a moderately valued cash generative business in three or four years is going to throw off a much more substantial portion of its enterprise value than a more highly valued business. That's just arithmetic. And I guess another way of saying it is that if you're able to realize growth or improvements in the more modern moderately valued business from a cash flow generation standpoint, it looms larger. Is that a fair hypothesis or does do you find that your, your model works fine for businesses approaching or exceeding double digit multiples? Yeah, yeah. I appreciate the diplomacy of the question and how direct it got at the end. I think that to, to the extent that if you look across our port portfolio, we have paid a wide range of multiples from low single digits to double digits. And from that standpoint the idea is we want limited downside. And then it's a question of how agile is the company and how great is the opportunity in terms of the upside and how prepared are they to realize that opportunity. And that really determines the spectrum along with risk sharing. So between those things and understanding its actual cash profile today, that's really what it comes down to in determining what is the appropriate multiple. But I think that if you take, if you extract out and talk about it in sort of like non M and A terms. Right. We like businesses where there are things about their future that allow for us to pull on multiple levers. Some of them may be low hanging fruit and some of them may be things that are going to take five to 10 years to play out and the seller's willingness to participate in that, as well as an understanding of how clear that opportunity is, it has a direct reflection on what we're willing to pay as well as just the stability of cash flows and their current reputation and how scaled and big they are today. So it's all of those things. But it's true that, you know, if you pay a lower price, I mean, fundamentally, to your point, objectively, the arithmetic is easier to get to if you pay a lower price. But we also know that, you know, again, it needs to be a fair transaction. Like we aren't trying to buy cheaply and sort of dupe a seller because there are all sorts of perverse incentives that occur if you try to do that. We want to be an ethical participant. We want to be competitive in the market, but we want to be competitive for the right reasons. Right. So we're not willing to stretch to necessarily be the highest bidder. We want to be a competitive bidder that is also offering other things that really matter to what that business looks like as it goes forward. And I would say a huge element of that occurs with the balance sheet itself. What is your optionality post close and how that business survives and thrives depending on how you've structured the balance sheet in the transaction. You emphasize letting operators run their own businesses. How do you all draw the line between autonomy and intervention? Yep. So we have a CEO guide that's on our website that is transparently the expectations that we set really around authority with all of our operators. And so we try to be really upfront about how it works, works. And it talks about the priorities of beer money, it talks about delegation of authority and the daisy model on how we make decisions. But ultimately, again, they're in the business day to day. If we abstract it out, they should make good decisions. Our incentives should be aligned for them to make good decisions. You know, I think all the normal things are true. Right. When somebody is dressing something up and we're not talking about reality anymore, then we're going to start to ask, ask more questions. Right. And if someone has a certain thing that they're after that they just can't face reality around, if the feedback loops are telling us otherwise, then we're going to ask more questions in that direction. And then I would say the other thing is risk taking. So it is really interesting depending on behaviorally, what the person's background is, whether they need to be pushed or whether they need, you know, sort of encouragement to go out and take risks. Risks or if they're the type of person that needs to make sure that we're not too prone to action and haven't asked all the questions before we go out and do something sort of risky. So all of those things we consider to be our responsibility, to be supporters, to be in consistent communication, and to make sure that, you know, we sort of set the team up to take good risks and to understand sort of, that their ultimate responsibility is to make sure that we leave things better than we found them, which is the ultimate concept of stewardship. Is your daughter interested in what you do? She is, yes. She asked lots of questions. We invested in a children's clothing manufacturer a couple years ago called Riley and Crew, and that's her favorite investment because her wardrobe is now filled with Riley and Crew clothes. And she thinks it's really cool that we're in the fashion business. That's nice. It's funny what kids pick up. Up when you just. By osmosis, when they're. You know, it's the function of how we all work now. And, you know, just sitting in the car, having to listen to mom on another conference call, and you're thinking, well, they're. You know, she's on her phone. She's not paying attention to this. And then they. The best part is, like, the interviews. Yeah, the interviews. Like, because you typically do interviews, you know, with people who are otherwise employed in the evening or on a weekend or something. And so I do interviews from my house. And she'll sometimes step in, and she likes to participate. She'll come and listen. She'll say, can I ask a question? And actually, one of. One of the people here that happened, and she asked her, like, three questions in a row, and she said, that was so memorable. Holly, who works with me now, she was like, that was one of the coolest things I've ever seen, is just letting her actively participate. I think at the time, she was, like, 8 years old. But, yes, I think she'll be a pretty good interviewer by the time that she's ready to start her career. Career. But she has all kinds of plans. She's. She's more entrepreneurially minded. So we'll see where she heads. So, Emily, we have just a couple more minutes left. We always like to end and ask people your comfort zone among four different topics. Travel, sports, music, or food. Where. Where. Where would your passions lie across those four topics? Probably. And please don't say Philadelphia sports teams. No. Although I. My husband and I had this, like, serendipitous trip to Philadelphia where it was, like, March, but it was this crazy, nice weekend where it was, like, in the 70s. It was the perfect time to visit Philly. So I. Everywhere has, like, it's fun little Anecdotal story Thanks to our selfishly frying our planet, March is much nicer than it used to be. It was really nice when I was there, but the last time, but maybe not including number one, including not Philly sports or Philly travel. What else? So we do a lot of adventurous travel. I've been paragliding off of the Alps in Slovenia as an example, which is a very funny story because that's definitely more my husband and not me. And I blacked out running into the abyss. And so I do some crazy things like that. We just got back from Italy for spring break and took our daughter and that was quite a fun adventure. She did dual lingo and learns Italian a little, a little bit before we went and was conversant with the, the servers and store owners and operators and whatnot. And so that was really fun. Where were you in Italy? We went to Rome in Florence. So pretty. We had all the highlights of Rome and then ate all the food and took a couple of cooking classes and whatnot in Florence and had a great time. Outstanding. Outstanding. Well, that's great. That's very cool. But I like a good adventure. If that's like, if you ask me, like, what do I actually want to spend money on, that's what I want to do. I want to have great adventures with people I enjoy being around. That's great. Good. Emily, it's been just great having you here. Likewise. It's been fun. It went by really fast. I can't believe that it's already been almost an hour. Well, we covered a lot of ground in, you know, 45 plus minutes. But we're immensely grateful for you sharing your story and that of permanent equity. And we certainly wish you and your colleagues continued success. Thank you so much. Likewise, guys. I appreciate the time and obviously we're, we're online and if anybody has follow up questions. Permanentequity.com My email is ermittateequity.com I'm on LinkedIn as well and always happy to chat with people. Thank you for joining us. Joining us for this episode of Middle Market Musings, we'd like to extend our sincere thanks to Emily Oldman for joining us today, as well as our sponsors, Greenberg Variations Capital and New Heritage Capital, as well as our main sponsor, SRS Aquium. Thanks as well to our editor, Jason Zapolo. If you enjoyed today's podcast, we'd encourage you to like and follow Middle Market musings on Spotify, Apple, or whichever provider you use to access podcasts and of course. Feel free to share with your friends. Thanks again, and we look forward to catching you on the next one.