Audax Private Equity decided it’s a good time to add another sector to its investment strategy. The private equity firm recently said it will expand into the financial services sector. Why financial services and why now? For Audax, maybe the better question is, “Why not?”
“The segue into the financial Services sector is a natural next step for Audax and will complement the firm’s historic focus on investments in business services, consumer, healthcare, industrial services & technologies, and software & technology sectors,” Audax said in a release. “By combining Audax’s platform and established buy & build approach with the growing team’s experience and expertise, Audax is well-positioned to identify and invest in compelling opportunities in the financial services industry.”
Audax will target investments in business services, insurance services, financial technology and wealth management, as it looks “to capitalize on the rapid innovation in financial technology,” the firm adds. To help find deals in the sector, Audax recently hired William Allen as a managing director. He was previously with Carlyle and brings more than two decades of investment experience in the financial service sectors across asset and wealth management, business services, capital markets, community banking, financial technology and insurance services.
Audax, which has offices in Boston and San Francisco, has made over 140 platform investments since it was founded in 1999 and averages seven add-ons per platform. Audax recently announced it closed its 1,000 add-on acquisition. The firm is currently investing out of its $3.5 billion sixth private equity fund, which was raised in 2018. In August, Audax-backed SJE Inc. bought L.W. Allen Inc., a manufacturer of wastewater systems, from Gen Cap America.
PE firms have been spending more time over the last few years creating platform companies and growing those businesses through small add-on acquisitions. For Audax, that is a trend that is not going to end anytime soon.
– Demitri Diakantonis