Post by 1BusinessWorld

Brett Hickey, Founder and CEO of Star Mountain Capital, shared his insights on the U.S. lower middle-market, private credit, and private credit secondaries at 1FinanceWorld. With 25 years in private markets, Hickey’s career began at Citigroup, where he gained invaluable experience in global investment strategies. Today, Star Mountain Capital manages over $4 billion in capital with over 90 professionals and 40 operating partners. The U.S. lower middle-market, comprising businesses with annual revenues between $10 million and $250 million, represents 44% of U.S. GDP. An estimated 95% of these businesses are founder-operated, presenting significant opportunities as many owners approach retirement. Star Mountain specializes in this segment, targeting businesses with EBITDA between $5 million and $50 million, and avoids startups and larger, more efficient markets. Hickey emphasized the importance of managing leverage in private credit, citing research that highlights leverage as a key predictor of default risk. He introduced private credit secondaries, where Star Mountain provides liquidity by purchasing existing investments, offering compelling returns with lower volatility. Hickey highlighted the recession resilience of smaller businesses in essential sectors like traffic control services, roadside repair, and preschools. Emphasizing the human element, he stressed understanding business owners' goals and building relationships to align interests and create long-term value. Cultural alignment and employee empowerment are crucial for business success. Hickey expressed optimism about the prospects of private credit and the lower middle-market, noting that diversification and geographic spread are key strategies for mitigating risk. Star Mountain Capital's focused approach positions it to capitalize on these opportunities, making it a leader in the lower middle-market investment space. PrivateCredit #LowerMiddleMarket #InvestmentStrategies #StarMountainCapital #BusinessGrowth #EconomicResilience Seth Farbman Brett Hickey Sam Edge Andreas Schweitzer Grange Johnson David Mandel John Sheehy Henning Stein, Ariel Barack Jeff Mathews Nikos Avlonas Jaco Vermeulen Jeff Siegel Faye Sykes, Patrick Anderson Andrew Ludwig Marcos Rocha Glenn Tyranski Shahriar Afshar Ben Johnson