Halbar Partners focuses on thesis-led investments that align experienced industry leaders with growth opportunities at the moment of scale for the benefit of our investors. Pulse 2.0 interviewed HalBar Partners co-founder Nate Wasson to learn more about the firm.
Nate Wasson’s Background
Wasson’s expertise and insight have been in shaping investment strategies for over two decades now, particularly at the intriguing intersection of institutional family enterprise, investment management, and impactful strategy. And Wasson said:
“I am the co-founder of HalBar Partners, the co-founder and principal member of Alvearia, a family office co-investment platform, and a founding member of the angel/VC group Keiretsu Forum Chicago.”
“I have over 20 years of expertise advising investors and family offices, as well as their portfolio companies and mid-market businesses. His experience lies at the intersection of institutional family enterprise, investment management, and impact strategy for national and international investors. I spent my early career in investment management, business banking, and as a JPMorgan consultant, leading teams ranging in size from two to 200. I later served as a Principal and Managing Director for Bank of Montreal’s US Private Bank, where I was involved in security selection, portfolio construction, marketing, operations, management, and investment product evaluation. After leaving the Bank of Montreal, I developed the Midwest family office practice for Capital Group. There, I developed an investment strategy for pre-institutional family offices focused on public and private opportunities. I am a subject matter expert in private equity, secondaries, ESG, and portfolio construction.
I have an undergraduate degree from Valparaiso University and an MBA from the Yale School of Management, with a concentration in asset management.”
Evolution Of HalBar Partners’ Thesis
How has HalBar Partners’ thesis evolved over time? Wasson noted:
“Our thesis initially involved some hedging positions and some other more complicated strategies. And we realized, like any good investment group, that the most crucial part is to keep our thesis pure and straightforward. Initially, we were getting into hedge territory regarding how we constructed the investment thesis. What we realized is that what investors want, especially for sophisticated capital allocators, is they didn’t want a strategy that was mixed up between potentially a hedging strategy, a private equity or strategy, and a venture strategy. They wanted something that was much more pure, that would be easier to put into their overall asset allocation models.”
“We then stripped out anything that wasn’t related to the growth equity strategy and the operator-led investment strategy that we had, and it was a home run.”
“We also built on this idea of operator-led acquisitions in the lower middle market through the concept of search funds. And that’s how our thesis evolved over a couple of years with the planning phase down.”
Challenges Faced
What challenges has Wasson faced in building your firm, and has the current macroeconomic climate affected your firm? Wasson acknowledged:
“The current macroeconomic climate has helped our firm. We benefit from the fact that many folks who have built these fantastic lower-middle market businesses are ready to retire. And we’ve talked about this several times: there’s a silver tsunami heading our way of folks who have been running these lower middle market companies and are now ready to move into retirement and divest from those assets.”
“Now, these companies have a leadership void or a succession challenge. And we’re very fortunate that over the next ten years, we will be able to fill a need that’s just as prevalent as the macroeconomic condition of retiring baby boomers in the US. And we’ll be able to put leaders into these companies to help them grow into the future.”
Favorite Memory
What has been your favorite memory working for your firm so far? Wasson reflected:
“So, the favorite memory always comes down to people. My favorite memory at this point was a chance for me to meet my partner down in Austin, and we had a chance to go through a deep dive into the thesis and understand how we were going to construct it. It was one of those moments where you understood the purpose and passion and why you partnered up with somebody in the first place. And having that time with Yuen at the beginning was just really exciting.”
Significant Milestones
What have been some of your firm’s most significant milestones? Wasson cited:
“So, like all firms, you have to have somebody who believes in you. We have been very fortunate as we built the thesis and were able to socialize it with several institutional investors. One of those investors, Reichard Capital, decided that they wanted to be all in, not just on HalBar and me, but they wanted to be all in on this asset class. Given their family and the legacy business that their family has built over the last 100 years – It was an incredibly validating point to know we were onto something, and really onto something that the market was going to be excited about because it was a new way of investing in this lower middle market acquisition space.”
Would you like to share any specific investment success stories? Wasson highlighted:
“There’s a water company in West Texas that delivers water to a number of different groups in the heart of Texas. I’m most excited about the journey that one of our entrepreneurs, Nate Taylor, took. He’s a United States Military Academy West Point grad. He was in the Army, and then he had an outstanding career. He went to Yale, and he finished his MBA, and he came out, and he’s like, I really want to operate and build a company. For many of us, building a company from the ground up could be a very daunting task, especially for those of us who are more mid-career professionals. He’s come out on top and has successfully led this company into its next chapter.”
Assets Under Management
After asking Wasson about the firm’s assets under management, he revealed:
“We’re finishing up a co-GP raise as we speak, and we’re targeting a $100 million fund with a hard cap of about $150 million overall.
Industry Focus
What are some of the industries that your firm is focused on? Wasson explained:
“It’s important to understand that the Hallbar ETA strategy is not focused on a specific industry.”
“We’re industry agnostic at the fund level and believe in the diversification that it provides.”
“We are passionate about finding entrepreneurs with deep industry expertise and focused on supporting them and finding a company to buy and operate. It’s one of the core tenets of why investing in a fund-type structure makes a lot of sense.”
“When you’re trying to make institutional investments in entrepreneurship through acquisition, you need that diversification, but you also need deep domain expertise in an area to run a company. Most of the time, when you go to a fund or investment strategy, if they’re generalist, they might be just kind of average at everything.”
Differentiation From Other Firms
What differentiates HalBar Partners from other firms? Wasson affirmed:
“We can access lower middle market investing in Europe if you’re in the US. Or, if you’re in Europe, get access to lower-middle marketing in the US. What differentiates us is that we can tap into entrepreneurship through an acquisition program and invest in the deals that come out of that program, which is rare.”
Future Goals
What are some of your firm’s future goals? Wasson concluded:
“We want to continue to expand our investment strategies that support entrepreneurs. And as time goes on, we would love to continue to do fund one and roll into a second and third fund in this space.”
“Another goal is to help entrepreneurs find the credit they need to buy these lower-middle-market businesses. I think for entrepreneurs looking for credit can be tricky, especially if they don’t have those contacts. For us, it is building an investment strategy that helps fund entrepreneurs on both the equity and debt sides. Getting those deals closed would be a wonderful way to continue building and supporting entrepreneurs.”
