St. Cloud Capital’s Managing Partners at the National Summit for Middle Market Funds Sees Growth in Pool of Small Businesses Needing Capital

On October 6th, 2019, St. Cloud Capital, LLC Managing Partners Benjamin Hom and Kacy Rozelle went down to Palm Beach, Florida for the annual National Summit for Middle Market Funds (National Summit). This annual conference is hosted by the Small Business Investors Alliance (SBIA). St. Cloud participates in this conference as each year’s summit “offers a unique environment to connect with 400+ fund managers, limited partners, investment bankers and select service providers over the course of three days. The National Summit program offers participants engaging speakers, exceptional networking, and essential content, all in an attractive setting.” Hom and Rozelle heard from speakers like Greg Williams, Editor-in-Chief at WIRED, about the impact of A.I. on businesses.

Why attend the National Summit? Mr. Rozelle says, “Every year, I look forward to Brett Palmer’s ‘Legislative and Regulatory Review’ of the U.S. Small Business Administration’s Small Business Investment Company (SBIC) program. Mr. Palmer is president of the SBIA and his up-to-the-minute status review of the challenges and opportunities facing the broader private equity industry as well as the SBIC program is always insightful and revealing.” Mr. Rozelle added, “At St. Cloud, we are always interested in how the SBIA is working to advocate for appropriate regulation and smart tax policy to promote investment and the growth of small businesses.”

St. Cloud keeps up to date with industry news, such as U.S. Small Business Administration “modifying its method for calculating average annual receipts used to prescribe size standards for small businesses,” which will go into effect January 6, 2020. This would expand the pool of small businesses as the government will give more contracts to small businesses. In addition, “private equity-backed acquisition values, measured as a multiple of cash flow, have exceeded valuations in global stock markets,” according to Forbes and Bain & Company, creating an opportunity for higher profits and returns.

Furthermore, St. Cloud values the National Summit and is a regular participant because the National Summit offers many resources for its attending firms. Several years ago, the SBIA initiated the CapitaLinx program within the National Summit. This program consists of a series of pre-scheduled introductory or follow-up meetings between general partners and limited partners. St. Cloud is able to capitalize on this networking and fundraising opportunity. For example, several of St. Cloud’s current limited partners were first introduced through this CapitaLinx program. In addition, Mr. Hom points out, “The National Summit is a ‘never-to-miss’ event for St. Cloud because we attend networking events with other SBICs and get to spend time with our service providers and fund counsels.”

St. Cloud has a deep involvement with the SBIA. Both Kacy Rozelle and Benjamin Hom have served as Western Region Presidents and on its National Board of Governors. Mr. Rozelle and Mr. Hom have also both chaired the annual Western Region Conference over different years. In these roles, the gentlemen contributed their extensive private equity and direct lending experience to advance the mission of SBIA.