Becker Private Equity & Business Podcast
The Rise of Independent Sponsors in Private Equity – Insights from Gregory Hawver of McGuireWoods LLP 3-17-25
Mon, 17 Mar 2025
In this episode, Gregory P. Hawver, Partner at McGuireWoods LLP, discusses the growing role of independent sponsors in the deal-making world. He breaks down how independent sponsors differ from traditional private equity funds, their unique deal structures, and why this investment model is gaining traction. Plus, he shares insights on the upcoming McGuireWoods Independent Sponsor […]
Chapter 1: Who is Gregory Hawver and what does he do?
the independent sponsor practice at McGuire Woods in the conference coming up. Then we'll talk about what are independent sponsors? What are the deal structures look like? Why is this area emerged so much? Give us a second on yourself in the McGuire Woods independent sponsor practice conference.
yeah scott absolutely and and thanks for having me on i'm a long time listener and big fan of the podcast so uh appreciate you having me my name is greg hover um so i'm a partner in the private equity group at mcguire woods i sit in the chicago office and Within the private equity group at McGuire Woods, we really focus on the middle market to lower middle market.
Two of our strengths within our private equity group are health care and our independent sponsor practice. And I know that on this podcast, you know, health care is discussed quite a bit. And as a listener, I thought it'd be fun to double click on the independent sponsor space.
Cause it's, uh, it's an area where McGuire woods, uh, you know, I'll, I'll humbly say that, that we are sort of the biggest, um, you know, legal practice within the independent sponsor space. We host, uh, the largest conference in the space. So in October of this year in Dallas, we will be hosting the McGuire woods independent sponsor conference, uh, We've had it annually for eight plus years.
Last year, we had 1500 attendees down in Dallas, and those attendees were strictly independent sponsors or family offices or other capital partners investing with independent sponsors. So it's a great conference for networking for panels, et cetera. So we're excited about that.
And we have lots of other podcasts, regional groups, other sort of value add connectivity within our ecosystem here for for independent sponsors. So there's there's the plug. We'll start with the plug. Scott, appreciate it and would love to dove into the topic.
Thank you so much. We've got an audience that's a vast mix of sort of private equity and business professionals and all kinds of other people that just have an interest in business. I didn't know what an independent sponsor was, quite frankly, until 10, 15, 20 years ago. I didn't even know what a sponsor was. But an independent sponsor, that world's emerged over the last decade.
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Chapter 2: What are independent sponsors in private equity?
Tell the audience what an independent sponsor is and what that looks like.
Sure. Yeah. You know, the easiest way to think about it, Scott, is a private equity fund is a group of really smart investors that have they get together and they come up with their thesis. Maybe it's we want to be a buyout fund in the health care space in the middle market to lower middle market. They go out and gather money, a committed fund, and then they go out and find the deals.
The independent sponsor model reverses that a bit. It's smart people that go out and find a deal first. So they're out there finding, you know, owners who are looking to sell, they find the deal, they get the deal under letter of intent, and then they go out and find their investors after. And so many of those investors are family offices.
Chapter 3: How do independent sponsors differ from traditional private equity funds?
Private equity funds are increasingly viewing this as an asset class. So that's the basic the basic difference.
Thank you. And who are these independent sponsors? I come across them often like I'm dealing with one right now who was an entrepreneur and founder.
did unbelievably well now is involved in finding deals bringing them to funds or other investors and trying to put deals together talk about who are the who are the typical independent sponsors another one that i know well was a former really successful partner and leader at gtcr then went out and did a lot of his own things as an independent sponsor but give us a feel for who are the independent sponsors
Sure.
Yes. So an independent sponsor is typically someone with 10 or more years of experience, either with a private equity fund, investing and thinking about it through that lens. Sometimes an independent sponsor will be a very experienced CEO or operator with 10, 20 years of experience in a specific niche area, but they're typically very experienced.
And it sort of goes to the value add of the independent sponsor. Family offices many times view these firms as extensions of their family office and just extremely qualified private equity investors. And let me draw a quick distinction here, just so we have all the different nuances of
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Chapter 4: Who are the typical independent sponsors?
Chapter 5: What is the significance of the McGuireWoods Independent Sponsor Conference?
And we have lots of other podcasts, regional groups, other sort of value add connectivity within our ecosystem here for for independent sponsors. So there's there's the plug. We'll start with the plug. Scott, appreciate it and would love to dove into the topic.
Thank you so much. We've got an audience that's a vast mix of sort of private equity and business professionals and all kinds of other people that just have an interest in business. I didn't know what an independent sponsor was, quite frankly, until 10, 15, 20 years ago. I didn't even know what a sponsor was. But an independent sponsor, that world's emerged over the last decade.
Tell the audience what an independent sponsor is and what that looks like.
Sure. Yeah. You know, the easiest way to think about it, Scott, is a private equity fund is a group of really smart investors that have they get together and they come up with their thesis. Maybe it's we want to be a buyout fund in the health care space in the middle market to lower middle market. They go out and gather money, a committed fund, and then they go out and find the deals.
The independent sponsor model reverses that a bit. It's smart people that go out and find a deal first. So they're out there finding, you know, owners who are looking to sell, they find the deal, they get the deal under letter of intent, and then they go out and find their investors after. And so many of those investors are family offices.
Private equity funds are increasingly viewing this as an asset class. So that's the basic the basic difference.
Thank you. And who are these independent sponsors? I come across them often like I'm dealing with one right now who was an entrepreneur and founder.
did unbelievably well now is involved in finding deals bringing them to funds or other investors and trying to put deals together talk about who are the who are the typical independent sponsors another one that i know well was a former really successful partner and leader at gtcr then went out and did a lot of his own things as an independent sponsor but give us a feel for who are the independent sponsors
Sure.
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