On April 9th, Mike Cooper, Co-Founder and Partner at Shore Capital Partners, visited the Leadership Health Care Private Equity cohort as a guest speaker to provide insight into Shore’s strategy and differentiation among the private equity market, the support services Shore offers its portfolio companies, and case studies of their successful healthcare investments.
Shore Capital Partners was founded in 2009 as a premier sector-specialist investment firm that focused on microcap healthcare investments. Originally established in Chicago, as a result of the strong healthcare presence in Nashville and Shore’s focus on healthcare firms, they opened an office in Nashville in 2019. Their vision is to be a premier investor while being the first choice for entrepreneurs and executives seeking a partner for growth and since 2020, Shore has been named to Inc. Magazine’s lists of the Best Private Equity Firms for Entrepreneurs. With a focus on driving growth and positions that are diversified, Mike commented that “their most valuable asset is a predictable asset.
To offer support to their portfolio companies, Mike highlighted Shore’s Portfolio Performance Group (PPG) during the discussion. The PPG group consists of four different teams including:
- Centers of Excellence (COE) – Subject matter experts who bring functional expertise to share best practices, create peer to peer functional discipline cohorts and portfolio company operational projects
- Shore Resource Team (SRT) – Operations professionals who help new partners prepare for growth by implementing Shore’s ‘100 Day Plan’ process
- Partnership Development Team (PDT) – Development team responsible for supporting acquisition growth throughout various business development efforts and focused on sourcing proprietary partnerships across multiple verticals within the micro-cap space.
- Investment Services Group (ISG) – Experts in Capital Markets, Executive Talent Placement, Strategy & Leadership Development
- Mike also showcased the success of their CXO Executive Program that places highlight motivated and hungry, young executives in the 2nd year of their MBA program into Chief of Staff positions through their portfolio companies, providing them with a runway towards operating their own company someday.
Since its inception, Shore has established $3.4 billion in committed capital including 5 healthcare funds, 61 platform investments, and has made 14 successful exits in healthcare. As Shore focuses on building companies to be purchased by larger private equity firms, they have historically exited their investments 3-5 years after entry but due to recent market conditions, there have been less buyers. Mike emphasized however that once they see any decline in the federal funds rate, they will see a ton of businesses sell.
Mike proudly attributed Shore’s success to being process oriented. Over the course of their 14 exits, Shore’s goal has been to double the returns of their businesses compared to the industry average and within their return profile they’ve averaged a 6.9x cash-on-cash (CoC) return and an average internal rate of return (IRR) of 68.3%. Referring to their operational approach as their “secret sauce” to generate such outsized CoC return, Mike commented that though “they can’t guarantee the returns, they can guarantee the process.”