Sourcing, Structure and Scale: How LP First Capital Is Navigating Today’s Deal Market
The current market is placing a higher premium on sourcing discipline, transaction structure and capital partner selection.
Ahead of the Independent Sponsors Summit in New York, Logan Lowery of LP First Capital shares how those dynamics are affecting deal execution, where the firm continues to find proprietary opportunities and how it has completed approximately 70 transactions without managing a traditional fund.
Where are you actually finding deals in this market that others aren’t?
Our best opportunities are sourced proprietarily via our management teams or direct outbound efforts from our portfolio companies. In addition, we see a lot of opportunities from smaller brokers. We have also seen a growing population of small buyside firms emerge in the last 24 months, significantly more than we saw a few years ago.
What’s changed most in how you’re getting deals done compared to 12–24 months ago?
We have run across more patient sellers recently than in years past. These sellers are not under any requirement to sell, and they take their time more in negotiating LOIs, working through diligence, and negotiating all of the transaction documents. The terms need to be how they prefer them, because they are not in a rush to sell. This dynamic has required us to think more creatively on structure and overall deal execution, rather than taking the typical cookie cutter approach to term sheets, legal docs, etc.
Where are you seeing deals stall most often right now?
Legal negotiation remains a key hurdle of our transactions. The emergence of AI review has led to many founders being more aware of and intelligent around the parameters of the legal documents. In some cases, this can be helpful, but in others it can be a real barrier to overcome if the seller or seller counsel is receiving poor guidance (or simply guidance that lacks context) from AI.
What makes a capital partner stand out to you today?
Our firm focuses on industries with significant industry fragmentation, and heavy M&A is often a component of our thesis. Capital partners that have a proven track record of acquiring and integrating a high number of add-ons stands out to us. There are a lot of firms that say they have interest in this type of investing, but have yet to demonstrate that in their very own portfolio companies.
LP First Capital has completed approximately 70 transactions while operating as an independent sponsor. What has allowed you to achieve that level of scale without relying on a traditional committed fund?
We have really strong capital partners for our acquisitive portfolio companies. So, although LP First Capital does not have a committed fund, we are often leveraging a large committed fund that backs our primary capital partner. Effectively, we get the benefits of the fund without having to manage the administration or raising of the fund.
At the Independent Sponsors Summit in New York, you’ll join the session “Should I Raise a Fund?” What is one difficult question you believe every sponsor should be prepared to answer before beginning that process?
In my opinion, the sponsor must know their identity and have a proven track record demonstrating that identity. What types of opportunities are they chasing based on size, scale, industry, growth.
About the Interviewee
Logan Lowery is a Partner at LP First Capital, an independent sponsor focused on investing in and building lower-middle-market businesses. LP First Capital targets fragmented industries where operational growth and strategic acquisitions can create long-term value.
The firm has completed approximately 70 transactions while operating without a traditional committed fund, partnering with institutional capital providers to support acquisitions and portfolio company growth. Lowery’s experience spans proprietary deal sourcing, transaction structuring, capital partnerships, and executing add-on acquisition strategies.
