Ep. 148: Dustin Ackerman, Future Standard | Mid-Market Secondaries and Growth at a Reasonable Price

0:00Dustin Ackerman: Hey everybody, before we get started with today's episode, I want to take an opportunity to tell you about my new book, AI Marketing Blueprint. It just hit number one bestseller status across multiple categories on Amazon, and it walks you through a proven framework that we are taking our clients through here at How to SaaS and how to stay relevant and visible in a world with AI platforms. One of the biggest problems that we have seen across clients and companies is that the traditional channels that they relied on, like paid search or SEO, have declined significantly or are getting more expensive and competitive.

0:34Dustin Ackerman: The reason for this is that a lot of buyers are starting to self-educate themselves and research on AI platforms. So a lot of that volume that was previously going to those channels is now moving to these new AI platforms. So to stay relevant, the book walks you through seven new rules that companies in all kinds of verticals and industries need to consider so that they can continue growing their pipeline and revenue and ultimately their enterprise value. So if this applies to your business or one of the companies that you've invested in, I definitely recommend that you pick up a copy. It's available on Amazon, on Apple Books, on Barnes and Noble, and even share it with your teams.

1:10Dustin Ackerman: Grab a bunch of copies so that you can kind of consume the content together and start to apply it to your business. And with that said, let's move on to the episode. Welcome to the Private Equity Value Creation Podcast, where we interview leading investors, operators, bankers, and advisors to help you answer one question. How do we increase the enterprise value of our companies? My name is Shiv Narayanan, and each episode, I will dive deep with a guest to help you become a better value creator and capital allocator. So with that said, let's jump right in and let's get started with today's episode.

1:46Dustin Ackerman: My guest today is Dustin Ackerman, and he is the Managing Director at Future Standard. And what I really enjoyed about this conversation is that Dustin specializes in secondaries and working with GPs on their primary investments as they do some co-investing on the side as well. And there is a ton of value that Dustin brings to the episode in terms of how they look at different investments and LPs and finding liquidity for the investors that they're working with and how they evaluate assets. And especially in current market conditions with how uncertain things are, secondaries have become such a hot button topic.

2:21Dustin Ackerman: We've done a couple of episodes on it, but Dustin's perspective was a fresh one. And there's a lot of great takeaways for GPs and just people who are investing in companies across the board. So I hope you take away from it as much as I do. Enjoy the episode.

2:40Dustin Ackerman: All right, Dustin, welcome to the show. How's it going? It's going great, Shiv. How are you? Pleasure to be here. I'm good. Excited to have you on. So why don't we start with your role in Future Standard and let's go from there.

2:52Shiv Narayanan: Absolutely. Happy to. So my background is a little bit unique. You know, I started working for some of the bigger banks, Golden Saks, then went to Royal Bank of Scotland, but, you know, really had a passion for the private markets. I had done an internship in kind of venture capital, private equity, wanted to get back in that space. And so I joined a firm called Portfolio Advisors over 10 years ago, and we've now combined with another firm called FS, and we are now Future Standard. So that's where we sit today. I've been with the firm for more than 10 years. We invest capital into the private equity space, but our business broadly invests in private equity, private credit, private real estate, and other alternatives.

3:40Shiv Narayanan: and we service clients across the institutional landscape as well as private wealth. So we're an expert in middle market private equity. That's really kind of the landscape that we operate in predominantly. And so happy to dive into that a little bit with you today. Yeah.

4:02Dustin Ackerman: And can you walk us through that? Like what types of investments are you making or how are you working with the private equity space in particular?

4:09Shiv Narayanan: Yeah, absolutely. So our business model is one that is focused. It's a sponsor-centric model. So we build relationships with private equity sponsors as well as private credit sponsors. And then we ultimately provide them with capital for their funds. We co-invest alongside them in the deals that they're doing. We have a big secondaries business where we are leading and investing in GP-led continuation vehicles. The GP-led secondary market has increased significantly over the past five or 10 years. So we're very active in that space. And then on the credit side, we leverage those sponsor relationships that we have to deploy capital into senior and junior credit opportunities.

4:58Shiv Narayanan: opportunities. So middle market companies who are looking to raise debt financing, we leverage that sponsor relationship to get a seat at the table as a potential lender in those deals. Got it.

5:12Dustin Ackerman: And in terms of focus or what areas are you trying to come in, or at least as part of your portfolio, where you would say that's your primary type of investment that you're making where you're driving the most amount of value for your own investors or your own funds?

5:29Shiv Narayanan: Sure. So I think about it in a couple of different ways. I mean, we invest across many sectors. So for the most part, a little bit sector agnostic, but obviously we have themes and conviction on certain sectors over others. But we have a pretty diversified portfolio and a diversified sponsor base that we work with to deploy capital. But I would say where the focus really comes in is focusing on companies that are sub$1 billion of enterprise value. So companies that are typically in that range of 10 to maybe 75 or 100 million of EBITDA, that's really the sweet spot for us in terms of where we like to deploy capital.

6:11Shiv Narayanan: There are a number of reasons for that, But, you know, one of which is often companies of that size, it's potentially the first time they're taking private equity capital. And we we really like those opportunities. We think there's a lot of that low hanging fruit that could be captured in in terms of institutionalizing those businesses, helping, you know, a founder owned or a management, you know, owned business that's been operating for 20, 30, 40 years, helping them to kind of take their business to the next level, helping them to grow their sales team, helping them to do an acquisition. Maybe they've never done an add-on acquisition and they want to grow outside of the local region that they've been operating in for a long time, but they don't have the expertise to do that.

6:54Shiv Narayanan: And so our thesis is really we can, you know, we alongside the sponsors we work with can go in and really help these companies to become institutional businesses and grow them from a sub$1 billion business to a company that is in the$1 to$2 to$5 billion range. And then those companies really become attractive assets for the larger private equity players, right? The bigger brand names in private equity that everyone kind of recognizes that they're hunting in that landscape. And we like to be a seller of those businesses upstream to the bigger private equity players. So that's really what we're focused on and what we try to do is build a portfolio that is concentrated in sub$1 billion type businesses, helping these companies to grow and scale.

7:47Shiv Narayanan: You can generate good growth rates on these smaller businesses, but you also find that you're not competing as much on price. They're more attractive assets at better prices. We think a lot about GARP, which is growth at a reasonable price. So in today's market, a lot of assets, especially those that are touching anything with technology or AI, are trading at pretty high multiples. So we think about how can we deploy capital into really high quality businesses at a more reasonable EBITDA multiple. And that's what we feel like you can do in the middle market. And in many cases, these companies also have a lot less leverage.

8:25Shiv Narayanan: So we think there's a lot of risk mitigation that can happen because these companies are more lightly levered. you're not using financial engineering to drive the returns. So we like that dynamic. And really, that's the backbone of everything that we are doing. That informs the sponsors that we build relationships with. That informs the deals that we back with equity capital, the deals that we back with credit and debt financing. And really, that's what makes us unique is that we are so disciplined on staying true to that middle market thesis.

8:56Dustin Ackerman: Yeah, I really like that, the GARP acronym, growth at a reasonable price, because many times you have companies that are growing fast, but EBITDA margins shrink considerably because they're over-investing in certain areas. Can you expand on that? How do you evaluate whether a company is in a reasonable range or what that reasonable range would be for a particular business or vehicle?

9:16Shiv Narayanan: Yeah, it does depend on sector. There's some healthcare businesses that we've been looking at recently and have invested in over the last five to 10 years that, you know, are trading in multiples that are, you know, kind of in the high teens, right? But what you have to underwrite is, are these businesses growing? Do they have a moat around, you know, the margins? Do they have a good, you know, payer mix? Like what are the dynamics of that healthcare business that justify a little bit higher multiple? If you look at the industrials portfolio, we're pretty active in kind of industrials and services.

9:48Shiv Narayanan: And, you know, obviously those are trading more in the low teens and potentially some trading in the single digits. And look, we're underwriting strong growth rates. We want to know that these businesses have the capability to grow and expand their market share. Frankly, when we partner with a sponsor to do it, we're underwriting what is their expertise in that sector? Have they done this before? Have they owned and managed a business that is in that sector? And how were they successful? Can they recreate that value creation playbook with this new asset. And so, yeah, it's all relative. We certainly are thinking about each sector on a sector-by-sector basis in terms of what GARP means, but we're certainly very focused on that as we deploy capital.

10:38Shiv Narayanan: I think relative to our large cap peers who are playing into bigger businesses, our valuations look much more you know, reasonable, reasonable on an at an on entry basis.

10:49Dustin Ackerman: Yeah. What about some of the stuff that you're talking about where you're coming in as a co-investor almost with these with these GPs, like how involved are you in the actual vetting of those investments and on the operational side of actually creating enterprise value with those investments?

11:06Shiv Narayanan: Yeah, it's a good it's a good question. And it does kind of depend on the situation, right? And the relationship that we have with a sponsor. In many cases, we are serving as a limited partner advisory board member for these sponsors. So we have a lot of visibility into what the sponsors are doing. And they view us as a strategic partner in those instances where we're strategic capital helping them get a deal done. We are always a minority partner. in the underwriting. We are, in some cases, we're underwriting that deal side by side with a sponsor, potentially prior to them even winning a deal, providing equity commitment letters, helping them get to a point where they can be competitive and win a new transaction.

11:55Shiv Narayanan: And then obviously what we're underwriting is what is the sponsor's angle for winning that deal and what is the value creation that can be had. Our team doesn't necessarily get as involved directly with the value creation, but we are very closely integrated with those sponsors. We know what they're doing. We know they're operating partners. We know what those partners are going to do when they get into that business and try to help create value. So our goal is to underwrite opportunities where we know and have certainty that a sponsor will be able to drive value because they have a certain person who is an expert in CRMs or implementing ERP systems into a business.

12:44Shiv Narayanan: And so that's what's going to drive value in the first 90 days of the hold period. So we're very much alongside the sponsor, but as a minority investor. And I think that model really works for us given that it gives us that diversification across many sponsors who are sector experts, right? And I think this is a great way to build a very diversified portfolio across sectors. The benefit that we have is that we partner with healthcare experts, right? Who are only doing healthcare deals in the three or four healthcare verticals that they really focus on. But that doesn't mean that we're only doing healthcare deals as we have another sponsor who's focused on consumer deals and a sponsor is doing industrials or services.

13:26Shiv Narayanan: And we can kind of pick, handpick those experts and then benefit from the value creation that they are implementing because of that expertise and that knowledge that they have. But we can then for our clients build a very diversified portfolio across the important sectors of the economy.

13:43Dustin Ackerman: That's great. I guess with that though comes like you get needing to get operation involved in certain situations. How does your team approach that or how have you structured your team to be able to work with GPs where you are involved at the board level or vetting some of these investments and looking at where those levers are versus where let's say you're just more of like a financial partner?

14:05Shiv Narayanan: Yeah, no, it's a good question. I mean, in most cases, if we're, you know, we may be a board observer in certain co-investment situations, you know, in most cases, we're a strategic financial partner. The reason that the sponsors use us to get those deals done is, you know, a sponsor when they're thinking about investing their next fund and, you know, they're say a billion dollar fund, they're going to do 10 deals on average, you know, 80 to a hundred million dollar check sizes. You know, there are going to be deals that are going to be 150 million, 200 million in check size, and they need strategic partners who can be there on day one to help them co-underwrite the deal and to be there in terms of equity financing and equity equity capital.

14:49Shiv Narayanan: So our sponsors view us as that partner where, you know, we've already invested in their funds. We know them really well. They can come to our teams and we can underwrite a deal and, you know, seven to 14 days, get up to speed, work with the sponsor to, you know, then get to a point where we can be providing that capital to them. In very few instances are we getting into the weeds with those sponsors. We defer most of that to the sponsor because they are, frankly, the experts and they're very hands-on with their individual companies. Our portfolio is obviously much more diversified across many, many investments and many funds and sponsors.

15:30Shiv Narayanan: And so we're less in the weeds, but more at a, you know, 10 ,000 foot view monitoring where our sponsors are creating value and how they create that value.

15:40Dustin Ackerman: Yeah, that's great. I guess, you know, you also have another side of your business where you're focused on the secondary. So like what percentage of your business are some of these primary investments, if you will, versus the backing LPs and their funds or secondary investments? Yeah.

15:56Shiv Narayanan: Yeah. Great question. So we do about two to three billion dollars every year in primary capital on the secondary side. It's around one to two billion of secondaries deployment. We're investing capital out of multiple funds on the secondary side. We focus on LP secondaries. That's kind of the bigger part of our business. And we also have a GP led secondaries business that is a growing part of our firm. It's also obviously a growing part of the overall secondaries landscape. But those two things are very complementary to each other, frankly. A lot of the secondary activity that we look at and see and ultimately invest in, over 70 to 80 % of that is in GPs that we've already backed on a primary basis.

16:42Shiv Narayanan: So we already know the manager. We know the assets really well. Our secondary team is able to underwrite with a high degree of conviction those assets, when they're going to exit, what the valuation should be. And that gives our secondaries team a real leg up, right? In terms of we already know these sponsors super well. In many cases, the sponsors can be very restrictive on who is buying those assets in the secondary market. And because we already have the relationship, we're in a great place to bid on those assets, often in a less competitive situation. If a sponsor is only approving two to three potential buyers, You know, that's better than being in a situation where there are 10 secondary buyers all competing on price to win the deal.

17:26Shiv Narayanan: So, you know, that's really where we operate is in that kind of space where there is an intersection between the primaries and the secondaries business.

17:34Dustin Ackerman: Yeah, that's really interesting because a lot of secondaries investors only do secondary investing. And whereas in your case, it's almost like a pipeline from the primary investments that you're deploying capital into. And then you're able to see, OK, there's an opportunity here and there's more to potentially deploy in a secondary format.

17:55Shiv Narayanan: That's exactly right. And we also benefit, too, from having significant relationships with the LP community, right? The investors in those funds who are looking to generate liquidity. Our businesses long have relationships with the biggest public pensions, foundations, endowments, who are using the secondary market as a portfolio management tool. and we have relationships with them such that we can have, in some cases, bilateral conversations with sellers and come up with a liquidity solution for them because of that relationship.

18:29Dustin Ackerman: We'll get back to the show in just a moment, but before we do, one of the most common and important value creation levers that we hear about on the show from private equity investors and our own PE partners is go-to-market. Yet, when these same PE partners bring us into their portfolio companies or new target investments that they're exploring, we find that the marketing function is quite immature, underutilized, and under-optimized. And so that's a huge opportunity that we see inside these companies. And if you have a portfolio company that you feel like it's scaled a lot faster to drive more pipeline and revenue, or you're looking at a new investment where you feel like that could be core to your investment thesis, well, we'd love to explore that with you and figure out how we can partner with you to drive more enterprise value creation on the marketing side, similar to the way that we've done with major PE firms like TA, Updata, HG, SDG, and many more.

19:22Dustin Ackerman: At this point, we've done hundreds of engagements across hundreds of industries and verticals, and we have a ton of benchmarks and frameworks that we bring to these engagements to help you drive as much enterprise value as quickly as possible. So if that sounds like something that you might be interested in, you can just email me directly at shiv at howtosass.com or go to our website and schedule a demo. And we'd love to speak with you about it further. And now with that said, let's get back to the show.

19:48Shiv Narayanan: How much of your business is being driven by that need from the LPs

19:53Dustin Ackerman: versus, let's say, the funds themselves or the companies that you're potentially primary investors in?

20:00Shiv Narayanan: Yeah, so the secondaries market broadly has gone to a point where LP secondaries are half the market, GP secondaries are half the market. So what that means is half of secondary volume today is driven by the GPs who are looking to generate liquidity in their portfolio through taking a single asset, moving it into a secondary continuation fund and providing their LPs with some DPI through that manner. So that's half the market. And that's not necessarily today half of what we do, but it's a good portion of 20 to 30 % of what we do today in our portfolios are those opportunities where a GP is taking an asset and providing liquidity on a single name basis, coming to the market.

20:46Shiv Narayanan: And as secondary buyers, we're providing that liquidity.

20:49Dustin Ackerman: On the LP side,

20:51Shiv Narayanan: what's driving liquidity there has been a number of things over the past few years. We've certainly seen the denominator effect impact some of the bigger investors in private equity in 2022, when you saw the public markets decrease significantly, some investors were over allocated to private equity. So they came into the market and started selling assets. You've also seen in the market, fundraising has picked up pretty significantly for secondaries over the last three to four years. And because of that, a lot of sellers are viewing the market as, hey, it's a good time to sell because there is plenty of capital.

21:29Shiv Narayanan: There's a lot of potential buyers out there and I can potentially get a good price for assets. So you're seeing more active portfolio management on the private equity side. A lot of sellers are now, they're not first time sellers, right? If you would have talked to us five or 10 years ago, a lot of the sellers that we were buying assets from, it was the first time that they had gone through a secondary sale in their portfolio. And so didn't have as much experience, kind of didn't know what to expect. Now you're seeing repeat sellers in the secondary market using the market as a portfolio management tool.

22:07Shiv Narayanan: The market's becoming more and more efficient, which I think is kind of great for everybody, right? That market continues to grow. I think it was north of$200 billion last year. It's going to be north of$250 billion this year. Very big and increasingly big market, more efficient. So I think it's good for both buyers and sellers from that perspective.

22:26Dustin Ackerman: Why do you say that? Help me understand. Why do you say that that's good for everybody?

22:29Shiv Narayanan: Yeah, I mean, I think as long as you can remain price disciplined, like it's certainly good for the sellers in terms of, you know, there's opportunity to manage your portfolio and sell. If you can remain disciplined on price, it's good for the buyers. There's just more opportunities to, you know, deploy capital. There's more transactions being had. Um, you know, if you can maintain that edge in terms of competing on price, like I mentioned earlier, in terms of certain situations where it's like a limited option, a carve out, right? One of the things that we really like to do on the secondary side is if you've got a big seller that's selling a billion dollar portfolio, you know, we like to look at those, that pool of assets and say, for example, it's 20 funds.

23:14Shiv Narayanan: we'll look at that portfolio, but we'll come back to the brokers or to the seller and say, well, we want to buy just these two assets. We have a relationship with that GP. We know the assets really well. We want you to carve out that portion and we're going to just buy those individual assets. We frankly think that's a very unique competitive dynamic given that there's those situations. It's because we're on a restricted list from that GP. We're one of the approved buyers. And so, you know, we can, we can compete for that asset and not have to compete on price or competing on, on a relationship.

23:52Shiv Narayanan: So that's a good place for us. So, you know, the market continues to grow. The GP led market is, is something to really watch. And, you know, there's a lot of exciting things happening on that side of the table. A lot of the sponsors that we work with who've held an asset for three, five, six years, they really like the business and maybe they've laid the foundation for great growth to happen over the next three to five years. But just given how long they've already held it, they may want to give LPs an opportunity to generate some liquidity. So they'll come to the secondary market and they'll talk to folks like us to provide that solution where they give LPs a chance to sell a portion of their stake in that asset or they could roll.

24:39Shiv Narayanan: They could continue to maintain, you know, their, their investment in the deal, but they're providing the liquidity opportunity. And then they're using secondary buyers like us to provide that equity capital in kind of the interim phase, kind of while they're still holding the business, still generating and creating value, um, and still do what the LPs are desiring, which is, Hey, we still want some DPI. We still want some liquidity.

25:01Dustin Ackerman: Yeah. I guess from a liquidity standpoint, totally see that being a good thing. But I'm curious, like your take on this, isn't it like a not the best thing where funds are needing more and more secondaries as a way to return capital to LPs? Because that means that the companies that they've invested in are not functioning at a level where they can actually exit those investments and return capital through an actual sale.

25:25Shiv Narayanan: Yeah, there certainly is a dynamic in that market where not every single asset continuation vehicle is created equally, right? Some of those assets, you are dealing with that dynamic of sponsors held it for five or six years, they want to sell it, but the current market is not giving them the price that they would want for that asset. So naturally, they need to hold that asset for another couple of years and hope that the market turns a little bit and maybe they can get a better price for that business. You have to be really careful about those opportunities, right? Like you don't want to be the provider of liquidity in a situation where, you know, an asset is going to just get stuck in a sponsor's portfolio.

26:07Shiv Narayanan: So we, you know, we watch that and we underwrite that and we're very cognizant of that potential dynamic in the space. But that certainly isn't true for all GP-led continuation stories, right? There are many, many assets out there that have really strong growth trends. The sponsor has done a really great job of managing it to this point. And sure, they could take it to market and sell it for a good price today. But they recognize, like, why give the next GP another 2 to 3x turn when we could capture that in the next three years? So a little bit of it is, you know, they're recognizing the opportunity to continue to create value in a business they've owned for a long time.

26:56Shiv Narayanan: And they can kind of mitigate some of the concerns that LPs have around. It's been five or six years. I haven't had liquidity. You know, by offering the investors the option of taking that liquidity or or holding the investment. And so ultimately, I think, yeah, there's certainly things to watch for this. This market 10 years ago was very different when it was zombie assets, zombie funds that were getting pulled into continuation vehicles. Most of those were multi-asset type deals and kind of cleaning up old portfolios. Today, the market is – that's not a big part of today's GP-led market, frankly.

27:35Shiv Narayanan: The majority of these assets are good businesses. and in some cases it's like, okay, yeah, if we hold it for another two years, maybe we'll get one or two turns of EBITDA difference in a different market. That may be a reason for holding the asset for a little bit longer. As an underwriter on our side, we just want to make sure that there's still an opportunity for an exit. And usually we're underwriting these to kind of a four, three to five year, four year hold period for the sponsor. But there usually, there needs to be a strong value creation plan for those next three years in order for us to get really excited.

28:23Dustin Ackerman: Yeah. No, I think those are all great points. I think based on that, are you seeing exit activity potentially pick up or are you expecting it to increase over the next little while?

28:33Shiv Narayanan: Yeah, Q1 was a little slow. Just, you know, volatility in the overall market, I think, dampened some of the transaction activity that, you know, maybe would have been expected in Q1. But Q1 has historically always been a little bit slower on exits and, you know, picks up throughout the year. And, you know, Q4 is typically one of the bigger quarters in terms of volume. So what we're hearing from our sponsors and what we're seeing in our own portfolio is there are are a lot of companies that are in that process of, we've hired an investment banker, we're talking about bringing it to market, we're just thinking about the right timing, you know, for that lining up the right potential, you know, buyers for that, whether it's a sponsor, sponsors or strategics, etc.

29:22Shiv Narayanan: You know, some of the noise in the overall macro, you know, has potentially slowed that down with respect to, you know, the conflict in Iran, and some of the other, you know, dynamics that we're facing on the macro side. But overall, I do believe in what we're hearing from our sponsors is that exit activity is picking up in the back half of this year. And one of the dynamics that we see in the middle market relative to just the overall PE market is the middle market is a little bit more insulated to some of the headwinds that you face on the exit front because there are more natural buyers for these smaller businesses.

30:00Shiv Narayanan: Then if you're talking about a$5 or$10 billion private equity backed business, you've significantly narrowed the field of potential buyers. If you're talking about a$700 million business, you can easily identify 12 sector expert PE sponsors who have invested in that space that will be potential buyers for the asset. So I think liquidity has been a little bit more predictable for us in the middle market, just given that dynamic of you're selling upstream, you're selling to, you know, kind of that middle layer of private equity sponsors.

30:31Dustin Ackerman: Does that change kind of where you deploy your capital? Because if you're, let's say, more excited about a particular sector or you see exits potentially ramping up, there is a path to generating more liquidity for your investments too. Like, does that change kind of how you deploy your capital or where you're focused?

30:48Shiv Narayanan: I mean, at the end of the day, for our clients, we're building longstanding, diversified portfolios. So, if we ever are tilting a portfolio one way or another in terms of sector by sector, it's very much on the margins. So if it's, you know, our technology exposure is typically 15%. If we were leaning in there, it might go up to 18 to 20, right? Like we're not taking significant sector bets. You know, we just, we believe truly in the benefits of diversification across the asset class. And so, you know, we'll do a little bit on the margins, you know, here and there. There are obviously some sectors that we have shied away from because you've seen, you know, fewer and fewer exits.

31:40Shiv Narayanan: And it's been harder to exit a company. Like, for example, in the healthcare space, private equity, you know, some sponsors got super excited about the dental service organizations, you know, the dental space or like the pet care veterinary space. Sponsors got really excited. A lot of sponsors got into that space. And now it's a lot harder to exit those businesses at the multiples that they paid because the excitement has waned a little bit. So you have to be cognizant of some of those trends. But we certainly believe that as we look at deals at entry, that the exit path is pretty clear. The big thing for us is we're not going to be reliant on the ups and downs of the IPO market.

32:29Shiv Narayanan: like only 2 % of the deals that we look at are ever exited through an IPO. Majority are through strategic acquisitions or through a private equity sponsor purchasing the business. So ultimately it's just a foundational thesis of ours that you're buying these smaller companies, your liquidity path is a little bit more clear and predictable because of the amount of dry powder that you have with those sponsors who are sitting, you know, a little bit bigger than where we're at.

33:03Dustin Ackerman: How has AI shaped some of this as you underwrite companies or funds? Like, how are you looking at things differently here?

33:11Shiv Narayanan: Yeah, it's a great question. It really is part of everything that we're doing today. And regardless of sector, the sponsors we're working with and the deals that we're doing, There is there's always a slide in the sim on AI and how it's being incorporated into into that investment. So we're very cognizant of that. You know, certain businesses will have quicker benefits from, you know, some of the improvements in AI and the technology there on the industrials and manufacturing side, which I mentioned, we're pretty active there. AI and machine learning, automation, robotics, like all of those things have been a real benefit to some of the sponsors that we work with in terms of improving operational efficiency at the facilities that they run and operate.

34:03Shiv Narayanan: You know, healthcare, it's been a big thing, you know, there we've invested in some businesses that, you know, do robotics. And so, you know, AI and machine learning have certainly been helpful there as well as, you know, companies that are in the life sciences space in terms of drug discovery and things like that. So it's certainly impacting really everything that we do at the company level. At our own level on the asset management side, you know, our teams are incorporating that into really everything we're doing in terms of due diligence, just helping our associates and analysts be even more efficient than they already were in terms of gathering data, understanding, digesting data.

34:49Shiv Narayanan: you know, they've become a lot quicker at, you know, producing diligence, tear sheets and things like that. So we're seeing it impact, you know, our day to day as well. And not just, you know, the underlying portfolio companies. So it certainly is a benefit.

35:08Dustin Ackerman: That's great. And I'm hearing similar things from other funds as well. So that's great to hear. We're coming up on time here, Dustin. But before we close off, if people do want to get in touch with you or learn more about future standard, what's the best way for them to do that?

35:20Shiv Narayanan: Yeah, absolutely. So, you know, we are, again, a little bit of background, you know, we're a$90 billion asset manager based out of Philadelphia, but we have offices in Connecticut and New York and Dallas, as well as international offices across Zurich, Switzerland, offices in Korea, Japan, and Hong Kong. So we've got folks, you know, really everywhere. You know, we've got a large, we had about 550 people across the organization. About 100 of those individuals are investment-focused individuals, and then obviously operations, sales, and others. But we're there. Futurestandard.com is our website, and we're easily reachable at all times.

36:07Shiv Narayanan: We're always excited to talk to people about middle market investing. So we're very passionate about the space. We love what we do. We think it's a really unique benefit to investors' portfolios. We've seen a lot of investors have noticed that in their own personal portfolio, that their kind of mid-cap, small-cap exposure has become less and less and less exciting. There's just fewer companies that they really get excited about that are of that size. And I think that's because companies just stay private for longer. And that's what we're capturing, Right. Is those businesses that are sub a billion, what used to be the small caps in the public market, those companies stay private and, you know, we're backing those those businesses.

36:52Shiv Narayanan: So always welcome to talk to folks and excited to talk to people about what what the middle market can do for their for their portfolio. Leo.

37:00Dustin Ackerman: Awesome. And Dustin, thanks for coming on and sharing your wisdom. We'll be sure to include all the links you mentioned in the show notes as well. But just from the audience's perspective, I think you shed a lot of light onto how firms can leverage secondaries and generate a ton of value in current market environment and conditions, which I think a lot of people are trying to figure out. So appreciate you doing this. Excellent. And thank you for having me on. Appreciate it. Thanks for listening to today's episode. Before you take off, just a few requests from our side. Number one, if you haven't done so already, please subscribe to the podcast on iTunes or Spotify or YouTube or wherever you go to listen to your podcasts.

37:37Dustin Ackerman: Number two, if you are in the market for due diligence services, strategy consulting, or fractional CMO services, please get in touch with us at www.howtosass.com. And third, please buy a copy of my new book, Exit Ready Marketing. It covers a ton of concepts that we take our customers through private equity investors b2b companies ceos operating partners and marketers and there's a ton of great value in there that expands on my previous book post acquisition marketing as well so with that said i hope you enjoyed today's content and we'll see you on the next episode