Strategy

Canaccord Genuity Acquires Renewable Energy Advisory Business

by

Investment bank Canaccord Genuity has acquired Carbon Reduction Capital’s investment banking business (CRC-IB), which adds a U.S.-based advisory firm focused on renewable energy to its existing capital markets operations.

CRC-IB focuses on mergers and acquisitions, project finance and capital raising across renewable and energy transition markets. Clients of the group operate within the wind, solar, energy storage, carbon capture and related segments. Since its founding in 2008, the CRC-IB team has closed about 415 transactions with a combined value of approximately $91 billion.

As part of the transaction, CRC-IB partners Conor McKenna, Nick Knapp, Britta von Oesen and Gary Durden will serve as co-heads of Canaccord Genuity’s newly formed Energy Transformation group within its U.S. Sustainability – Energy and Industrial Transformation investment banking platform. The group will provide M&A, project finance, capital raising and advisory services to public and private companies and financial sponsors across renewable energy, commercial and industrial markets.

Jeff Barlow
Jeff Barlow

“Our acquisition of CRC-IB builds on the strong momentum within our advisory franchise and reinforces our strategy of focusing on our core strengths, anchored in advisory and capital raising across high-growth sectors,” said Jeff Barlow, chief executive of Canaccord Genuity (U.S.). “It also accelerates our sustainability ambitions by leveraging deep sector expertise and unlocking new opportunities to increase our market share in the U.S. and globally.”

Canaccord Genuity (TSX: CF) is an independent, full service financial services firm, with operations in two principal segments of the securities industry: wealth management and capital markets. The firm’s capital markets division offers institutional and corporate clients investment banking, merger and acquisition, research, sales and trading services from offices across North America, the United Kingdom, Europe, Asia and Australia, with sector coverage in healthcare, technology, consumer and industrials. Canaccord Genuity was founded in 1950 and is headquartered in Toronto.

Conor McKenna
Conor McKenna

“Joining Canaccord Genuity marks a significant milestone for CRC-IB, enhancing our ability to serve a growing base of domestic and international clients through a fully independent structure with international reach, allowing us to deliver expanded opportunities for our clients,” said Conor McKenna, partner and senior managing director of CRC-IB. “Equally important, both organizations share a strong cultural alignment and a complementary vision for long-term growth.”

Solomon Partners and Keefe, Bruyette & Woods were the financial advisors to CRC-IB.

PIK and Preferred Equity Financing Structures: Balancing Flexibility with Risk

by

The Rise of Non-Cash Pay Capital Structures
In an environment where interest rates remain elevated and exit timelines have extended, private equity sponsors are seeking new ways to balance liquidity needs against operational realities. As a result, Configure has observed an increase in non-cash pay capital structures. Payment-in-kind (PIK) instruments, holdco PIK structures, and preferred equity solutions have increased in prominence.

These structures share a common thread: they allow sponsors to raise capital while preserving cash at the operating company level. Yet, the mechanics and long-term consequences of each differ substantially. For private equity sponsors, understanding when, where, and how to deploy these tools can make the difference between enabling growth and creating unnecessary capital structure constraints.

The Mechanics of PIK Instruments
At its core, a PIK instrument is one in which interest is paid not in cash, but through the accrual of additional principal or securities ‚ or paid-in-kind. Instead of an immediate outflow of cash debt service, the obligation grows over time, typically compounding until maturity or a liquidity event.

Traditional PIK Notes are structured as subordinated debt. Lenders receive compensation in the form of added principal, which results in a larger balloon payment at maturity. PIK toggle notes offer the issuer flexibility to switch between cash-pay interest and PIK interest, often at a stepped-up rate if toggled to PIK (the “PIK premium”). Holdco PIK Notes are issued at the holding company level, structurally subordinated to operating company debt. They rely on upstream distributions or exit proceeds for repayment.

PIK financing at the holding company level can also provide incremental capital for bolt-on acquisitions without straining the senior debt package.

Lastly, preferred equity is a hybrid solution. While not technically debt, preferred equity carries contractual return features (often with a PIK element), sits senior to common equity, and may come with governance rights or downside protections.

Importantly, some PIK preferred instruments are structured to convert into common equity at maturity or upon a liquidity event. This means that what starts as a compounding claim on value can ultimately become dilutive to common shareholders, making it critical for investors to model both the cash flow impact of PIK accruals and their eventual effect on ownership.

Each of these instruments occupies a different position in the capital stack. While traditional debt is serviced from the operating company’s cash flows, PIK and preferred equity rely more heavily on future events — such as exits, refinancings, or recapitalizations — for repayment.

Why Sponsors Use PIK Financing
The renewed interest in PIK structures is not surprising. The key attraction is liquidity flexibility. Common use cases include liquidity relief, where operating companies face constrained cash flows; a PIK instrument avoids burdening the business with current interest expense. Sponsors may use holdco PIK or preferred equity for dividend recapitalizations to extract liquidity without increasing leverage at the portfolio company.

When structured appropriately, PIK and preferred equity offer several clear advantages, including cash preservation.

PIK financing at the holding company level can also provide incremental capital for bolt-on acquisitions without straining the senior debt package. Additionally, as exit timelines lengthen, PIK instruments bridge capital needs, whether for growth or liquidity management. Lastly, at times, sponsors employ PIK or preferred equity at the fund or GP level to meet capital commitments, fund continuation vehicles, or support cross-portfolio initiatives.

In each scenario, the common denominator is flexibility: the ability to preserve cash today while deferring repayment obligations to a later, more favorable moment in the future.

PIK vs. Preferred Equity: Key Differences
Although both PIK and preferred equity preserve cash, the two structures differ meaningfully in economics, treatment, and implications, as outlined here:

Risk/Return Profiles: PIK notes are debt instruments. They carry a contractual obligation to repay, albeit one that is subordinated. Preferred equity, by contrast, sits below debt in the capital stack and typically commands a higher expected return to compensate for its risk.

Treatment by Ratings and Lenders: PIK instruments are often viewed as leverage, whereas preferred equity may receive partial equity credit depending on terms. This distinction can influence both the company’s reported leverage metrics and the perception of other lenders.

Tax and Accounting: Interest on PIK notes may be deductible, subject to limitations. Preferred equity returns, however, are not interest expense and can affect reported earnings differently.

Governance Rights: Preferred equity investors often negotiate for consent rights, board seats, or enhanced reporting privileges. PIK noteholders may have fewer governance levers, though covenant protections are notable.

Investor Base: PIK notes often attract private credit funds, hedge funds, or specialty finance vehicles. Preferred equity is more commonly provided by credit opportunity funds, insurance capital, and, in some cases, co-investing LPs.

For sponsors, the decision between the two often hinges on balancing cost, flexibility, and control.

Market Trends and Applications
The current macro backdrop has made PIK financing especially relevant. With higher-for-longer rates, cash-pay debt service can be an outsized burden, making preserving cash through PIK accruals an attractive option. Extended hold periods mean M&A markets are driving sponsors to hold assets longer, increasing the likelihood of mid-hold liquidity needs. Alongside continuation vehicles and NAV-based strategies, sponsors are turning to PIK and preferred equity for creative financing solutions.

Sponsors must therefore view these instruments not as a cure-all, but as part of a holistic capital strategy.

Examples of such applications include a sponsor funding a bolt-on acquisition through holdco PIK debt to avoid renegotiating senior facilities, a dividend recap structured through preferred equity, which provides liquidity to investors while maintaining operating flexibility, or a GP financing its commitment to a continuation vehicle using a PIK-preferred instrument provided by a specialty lender. In each case, the instruments serve as liquidity valves — sometimes defensive, sometimes offensive.

Benefits for Private Equity Sponsors
When structured appropriately, PIK and preferred equity offer several clear advantages, including cash preservation, which is critical in businesses with tight liquidity or high reinvestment needs; financing flexibility, which provides capital without the immediate burden of servicing cash-pay debt; and a broader investor base, which brings in capital providers beyond traditional banks, diversifying funding relationships.

Additionally, these instruments can be tailored — toggle features, step-up pricing, equity kickers — to align with sponsor objectives. There is also strategic optionality, as investors can enable dividends, add-ons, or growth initiatives without destabilizing the operating company’s balance sheet. For sponsors, these features can create meaningful breathing room in a volatile environment.

Risks and Tradeoffs
Yet the same features that make PIK attractive also introduce risks. Sponsors must weigh:

Compounding effect: PIK accruals can snowball, leading to a significant repayment obligation at maturity.

Cost of capital: PIK and preferred equity are among the most expensive forms of capital, often with double-digit yields.

Structural subordination: Holdco placement or equity ranking increases repayment risk, which investors price accordingly.

Governance concessions: Preferred equity, in particular, can dilute sponsor control through consent rights or board seats.

Exit complexity: Preferred equity can create misaligned incentives or disputes in distribution waterfalls, potentially complicating the dynamics between sponsors and LPs.

Sponsors must therefore view these instruments not as a cure-all, but as part of a holistic capital strategy.

Looking Ahead: The Role of PIK and Preferred Equity
Looking forward, PIK and preferred equity are likely to remain integral components of private equity financing playbooks. Several themes are shaping their trajectory:

Expect more usage in GP- and LP-level financings, including continuation vehicles and NAV-based strategies.

Structures combining delayed draw features, toggles, and equity participation will proliferate.

Direct lenders, opportunistic credit funds, and insurance-backed vehicles are all competing aggressively for these mandates.

As long as base rates remain elevated, sponsors will continue to value the cash-preserving features of PIK and preferred equity.

Ultimately, these instruments represent a balancing act: immediate flexibility traded for long-term cost and complexity. Sponsors who use them judiciously — aligned with deal strategy and exit visibility — can extract significant value without overburdening portfolio companies.

About Configure Partners
Configure Partners is a credit-oriented investment bank specializing in debt placement. The firm provides the highest level of client service and execution to middle-market private equity sponsors in acquisition finance, refinancing, and dividend recapitalization transactions. Configure is one of the largest firms dedicated to debt advisory. We’ve developed our processes and systems to ensure execution across all types of financing transactions. Unlike other debt placement groups, we don’t treat debt advisory as a secondary service offering to M&A — debt placement is our entire business.

Importantly, we consider ourselves an extension of our clients in the market, and we treat lenders accordingly. The cumulative effect of this approach is particularly powerful in a more difficult financing environment where debt capital is less “abundant.” The results of the Configure methodology speak for themselves, with over 80% of our revenue coming from a repeat source of business.

If the above article has sparked a question or thought concerning PIK financing structures, please feel free to reach out to any of our Configure team members or visit our website at www.configurepartners.com.

About the Authors

Mark Birkett
Mark joined Configure in 2025 as our first banker in Chicago, bringing over two decades of experience supporting private equity firms and middle-market borrowers across a range of debt products, including those supporting acquisitions, growth, recapitalizations, and refinancings.

During his career, Mark has underwritten and advised clients in structuring and executing more than $6 billion of financings comprising senior debt, subordinated debt, structured capital, and non-control equity.

Before joining Configure, Mark was a Senior Managing Director at Hilco Corporate Finance. Prior to joining Hilco Corporate Finance, Mark was a Managing Director in

the Leveraged Finance Group at William Blair. Previously, he served as Partner and Managing Director at Livingstone Partners, a lower middle-market investment bank. He was also an Underwriter at GE Antares Capital.

Mark earned his MBA from the Ross School of Business at the University of Michigan and his B.S.B.A. in Finance from Villanova University.

Joseph Weissglass
Joseph has focused his career on providing advisory services to middle-market companies regarding debt advisory, liability management, and restructuring engagements.

Joseph joined Configure Partners from the Middle-Market Special Situations practice at Guggenheim Securities, where he served as Vice President. Prior to joining Guggenheim, he was part of the Global Finance and Restructuring Group at Barclays Capital in New York.

Joseph graduated with a B.S. in Construction Science and Management from Clemson University and with an MBA from the University of North Carolina Kenan-Flagler Business School. He is a FINRA General Securities Representative (Series 24, 63, 79) and holds the Certified Insolvency and Restructuring Advisor (CIRA) and the Certification in Distressed Business Valuation (CDBV) designations.

Joseph remains active as a thought leader in the private debt space. His insights and commentary on market trends have been featured in industry publications, including Bloomberg, Private Equity Professionals, Mergers & Acquisitions, Private Debt Investors, PitchBook, The Deal, and LSEG Loan Connector.

The 401(k) Revolution: Private Equity’s Boom or Bust Moment?

by

he idea of integrating private equity (PE) into 401(k) plans is back in the spotlight, and the question isn’t just can it be done, it’s should it be done, and who will choose it? The U.S. government has signaled that it is open to allowing these investments within defined contribution plans. But even if regulators open the floodgates, a chain of hurdles remains: Retirement plan administrators must decide if they’ll permit private equity funds on their platforms, which specific funds to offer, and how to manage the operational chaos that could follow. Most importantly, individual employees must opt to allocate their own contributions to these riskier investment vehicles.

This isn’t as simple as dropping a new ticker into a 401(k) menu. Imagine a corporate plan committee debating whether to offer high-fee, illiquid private equity funds alongside low-cost index funds. It’s a conversation that makes even sophisticated fiduciaries break into a sweat.

The Bitcoin Parallel
Consider the uproar when Fidelity began allowing 401(k) participants to invest in Bitcoin. Critics called it speculative and warned it would signal the end of the retirement account as we know it. While the option grabbed headlines, it’s worth asking how many investors actually opted in. Private equity carries different risks, but the psychology isn’t dissimilar particularly when retail investors are conditioned to think like day traders on platforms like Robinhood or E*TRADE, watching every price tick up or down in real time.

Can private equity firms handle the operational demands of millions of $100 contributions, each needing real-time reporting, record-keeping, and customer support?

401(k) investors, by contrast, are accustomed to the slow-and-steady nature of daily Net Asset Value (NAV) strikes and quarterly statements. They aren’t refreshing their phones every five minutes because they are in it for the long haul and count on sustained growth with limited downside. When private equity becomes a 401(k) option, investor expectations could shift dramatically in terms of returns, access to market data, and liquidity.

Daily NAV and Liquidity Challenges
To be fair, some mutual fund-style vehicles already offer private equity exposure with daily NAVs. These funds, however, still require steep minimums for the average 401(k) participant (often $25,000) and offer only quarterly liquidity. That is still a major improvement over traditional private equity where minimums are in the millions and liquidity is non-existent unless you can find a secondary buyer.

To compete with mutual funds, private equity firms will need modern, always-on portals that deliver intuitive dashboards with real time valuations.

Scaling this model for tens of millions of retirement accounts would be unprecedented. Can private equity firms handle the operational demands of millions of $100 contributions, each needing real-time reporting, record-keeping, and customer support? Current infrastructure, designed for a few dozen institutional limited partners, is nowhere near prepared to scale.  The providers of 401(k) plans will have an operational burden to negotiate with private equity fund providers.

The ERISA Question
Compliance is another colossal challenge. ERISA rules impose strict fiduciary standards on plan sponsors, and adding illiquid, high-fee assets like private equity could amplify legal risks. There’s valid reason hedge funds aren’t offered in 401(k) plans today: the complexity of proving that these products are in the “best interest” of participants is daunting. Any misstep could invite lawsuits and reputational risk.

The Transparency Gap
Retail investors won’t tolerate the reporting delays that private equity has traditionally operated with, which is often 30–90 days behind reality. To compete with mutual funds, private equity firms will need modern, always-on portals that deliver intuitive dashboards, real-time valuations, and clear explanations of performance. Meeting these expectations would require a costly overhaul of private equity’s legacy technology stack, from data aggregation to customer support.

Cost vs. Reality
Even if private equity firms manage to build this retail-grade infrastructure, how will they pay for it? The average 401(k) contribution is around $3,000 to $6,000 annually, which translates to roughly $60–$120 in administrative fees per person per year. That’s a razor-thin margin to fund robust digital platforms, compliance teams, and cybersecurity on par with major banks.

Revolution or Risk?
This leaves us with the real question: Is this the next big boom for private equity, or a setup for failure? While the promise of unlocking a slice of the $8.9 trillion 401(k) pool is enticing, the operational and fiduciary obstacles are monumental. Plan administrators, fund managers, and even regulators will need to agree on how this can be done responsibly.

Without massive reinvention, rethinking fee models, investing in cloud-native platforms, embracing API-driven data sharing, and building AI-powered support, private equity risks becoming the next “Bitcoin-in-401k” headline. It could all be exciting in theory but rejected in practice by both fiduciaries and participants.

The Verdict
The private equity industry faces a choice: evolve into a transparent, investor-friendly, retail-ready model or remain an elite asset class, inaccessible to the masses. The 401(k) revolution may be coming, but whether it will be a boom or a bust depends on how prepared private equity is to rewire its DNA.

–  END –

About the Author
Philitsa Hanson is Head of Product – Equity and Fund Administration at Allvue Systems, a provider of cloud-based software, data management, and outsourced services for the global private capital markets. Serving private equity, venture capital, private debt, and fund administrators, its platform supports portfolio monitoring, fund accounting, investor reporting, and compliance. By integrating workflow automation with centralized data, Allvue enables managers to improve operational efficiency, transparency, and scalability. Headquartered in Miami, Florida, the company delivers solutions to general partners, limited partners, and administrators worldwide.

© 2025 Private Equity Professional | August 14, 2025

Trump Administration Considers Opening $9 Trillion 401(k) Market to Private Equity Investments

by

The Trump administration is contemplating an executive order that would permit private equity firms to access the nearly $9 trillion U.S. 401(k) retirement market. This initiative aims to allow private equity firms such as Blackstone, KKR, and Apollo to offer investment options within 401(k) plans, potentially transforming the landscape of retirement savings in the United States.

The proposed directive would instruct federal agencies—including the Department of Labor, the Treasury, and the Securities and Exchange Commission—to assess the feasibility of integrating private equity into 401(k) plans. This move could potentially unlock significant new capital for private equity firms, which have been seeking broader access to retail investors.

While proponents argue that private equity can offer higher long-term returns suitable for retirement timelines, critics warn of increased risks, such as higher fees, leverage, and valuation opacity. Concerns also include the potential for reduced liquidity and the complexity of private equity investments, which may not be suitable for all retirement savers.

The Trump administration’s current considerations indicate a renewed interest in facilitating private equity access to retirement savings.

For private equity funds, gaining access to the 401(k) market presents a transformative opportunity. The influx of retail capital could provide a more stable and long-term funding source compared to institutional or short-cycle investors. It would also diversify their investor base, reduce fundraising volatility, and enable fund managers to deploy larger pools of capital over extended investment horizons. Additionally, consistent contributions from retirement savers could smooth out capital inflows and enhance fund planning. As traditional PE fundraising becomes more competitive, tapping into defined contribution plans offers firms a substantial growth channel and deepens their integration into mainstream investment ecosystems.

“Defined contribution plans are the next frontier for private equity,” said Jon Gray, President and COO of Blackstone, “The structure needs to evolve, but the demand is clearly there.”

The administration’s consideration of this policy change reflects a broader shift toward expanding investment options within retirement accounts, aiming to provide savers with access to a wider range of assets. However, the potential risks and complexities associated with private equity investments necessitate careful evaluation and implementation to ensure the protection of retirement savers.

In June 2020, the Department of Labor issued an Information Letter under the Employee Retirement Income Security Act (ERISA) concerning private equity investments as a component of professionally managed asset allocation funds offered as investment options in participant-directed retirement savings plans, such as 401(k) plans. The letter clarified that private equity investments could be included in such funds, provided that plan fiduciaries adhere to their responsibilities under ERISA.

Subsequently, in December 2021, the Department released a Supplemental Statement to address concerns that the Information Letter could be misinterpreted as broadly endorsing private equity investments. The statement emphasized that plan fiduciaries, especially those of small plans, may lack the expertise necessary to evaluate the prudence of private equity investments in designated investment options. It cautioned against the perception that private equity is generally appropriate for inclusion in 401(k) plans.

Despite these clarifications, the Trump administration’s current considerations indicate a renewed interest in facilitating private equity access to retirement savings. Industry executives predict that offering private equity funds to 401(k) retirement plans could attract substantial new assets. However, widespread adoption remains uncertain due to legal concerns and ongoing regulatory processes.

“We shouldn’t treat private equity as toxic or golden,” said Joshua Gotbaum, retirement policy fellow at the Brookings Institution, “it’s just another tool. What matters is how and when it’s used.”

The potential inclusion of private equity in 401(k) plans has sparked debate among financial experts. Some argue that private equity investments can provide diversification and potentially higher returns over the long term, aligning with the retirement goals of plan participants. Others caution that the complexity, higher fees, and illiquidity associated with private equity may pose significant risks, particularly for average investors who may not fully understand these investments.

As the administration continues to evaluate this policy shift, stakeholders across the financial industry, regulatory agencies, and plan sponsors will need to carefully consider the implications for retirement savers. Ensuring that fiduciary responsibilities are upheld and that participants are adequately informed about investment options will be crucial in navigating this potential transformation of the retirement savings landscape.

© 2025 Private Equity Professional | June 5, 2025

How to Control Healthcare Costs Throughout Your Portfolio With New Insurance Model

by

During the five- to seven-year window that private equity typically owns businesses, firms have a value creation plan to increase profitability so they can sell or take the company public. Those plans frequently involve go-to-market strategies or cost reductions like offshoring some business areas. But private equity firms often ignore one of the largest items on a P&L statement: employee benefits.

Improving the cost structure of employer-sponsored health insurance is incredibly effective in enhancing profitability, especially for middle-market PE-backed companies, but leaders are understandably wary of changes that might spark employee backlash or drown HR teams in administrative tasks.

Many companies in the portfolios of private equity and venture capital firms are struggling with health insurance costs.

Fortunately, there’s a new model — the individual coverage HRA (ICHRA) — that delivers quality, personalized healthcare for employees while giving the business control over insurance costs and eliminating the risk of double-digit renewals that can devastate a balance sheet.

Here’s how ICHRA can help control healthcare costs throughout your portfolio:

Why PE-backed companies are turning to ICHRA
From speaking with industry leaders, it’s clear that many companies in the portfolios of private equity and venture capital firms are struggling with health insurance costs. Perhaps the worst part of a traditional group health plan is the unpredictability.

Strong financial management is built on data-driven decision-making — accurately forecasting revenues and proactively anticipating expenses. But there’s no way to adequately prepare for health plan renewals. A company’s annual rate increase is tied directly to the risk pool of its group insurance. The plan may include 150 employees; if one of those employees or their dependents has a difficult diagnosis or requires specialized care, that will cause the overall group rate to skyrocket. All of the organization’s careful financial planning is now meaningless.

The new model is especially attractive to employers with a multi-state footprint.

These are the moments when a company most wants to be there to care for its employees — to help them through a challenging time and assure them they’ll be supported. But there’s a harsh reality to the situation: one employee’s health diagnosis can have dramatic consequences for the business. As the company’s costs skyrocket, the CFO has no choice but to shift costs and increase employee contributions. One person’s health status has an immediate financial impact on the other 149 people in the group plan.

The vast majority of companies don’t exist to choose health insurance plans. Why should a company that builds software or manages restaurants be making healthcare decisions for their employees? And why don’t the employees — each of whom has specific, personal health needs — have a say in the matter? With ICHRA, employers let go of group plans and instead provide an allowance to employees to buy health insurance on the individual market.

The playbook for applying ICHRA across a portfolio
ICHRA can save money for both employers and employees when the individual market is less expensive than the group healthcare market. PE firms who are not exploring the potential for an ICHRA win-win may be leaving money on the table. More importantly, ICHRA means that employers are no longer financially shouldering the burden of high-cost claimants. Employees can choose the quality coverage that best meets their needs — benefiting from a competitive market as carriers slash premiums to attract customers — while employers no longer nervously await their renewal.

Additionally, traditional insurers have strict participation requirements. If a carrier knows your company only has 5% enrollment, they’ll decline to quote because they assume only the poorest-risk employees are enrolled. ICHRA has no such requirements.

In addition to providing stability for the employer, ICHRA also provides flexibility to employees.

The new model is especially attractive to employers with a multi-state footprint. One-size-fits-all plans are a poor fit for those companies. PE-backed businesses growing quickly by acquisition are often bringing together different employers, and trying to harmonize group plans every time is a miserable exercise. Alternatively, businesses that use ICHRA simply fold the newly acquired company’s employees into their existing ICHRA plan and let them choose their insurance.

Finance and HR leaders sometimes worry that putting hundreds or thousands of employees on an ICHRA plan means they’ll have to hire people to handle the day-to-day management, but that’s not the case. Vendors like Take Command help employees find the right plan, then handle everyday employee inquiries and ensure the HR team is not dealing with every question. These vendors can also help companies proactively communicate the available plans and average costs.

Cost savings and employee freedom of choice
Business leaders understand the risk of having an employee get sick and require expensive care. As a result, employers often try to join a consortium and participate in larger group plans. The arrival of ICHRA means that companies can now join the largest imaginable risk pool — the more than 20 million Americans who purchase health insurance on the individual market. When spread out across that pool, an expensive diagnosis has no impact on the overall cost.

That stability allows financial leaders across a PE firm’s portfolio to finally set a predictable, consistent budget for health insurance costs. Many organizations provide employees with a monthly allowance — typically between $500 and $1,000 — to purchase an ICHRA plan on the individual market. When renewal season arrives, the employer can simply continue contributing the same amount, avoiding unpredictable cost increases.

In addition to providing stability for the employer, ICHRA also provides flexibility to employees.

Prototek, a PE-backed digital manufacturing company based in New Hampshire with more than 250 employees, experienced this firsthand. As the company expanded rapidly through mergers and acquisitions across nine locations in multiple states, it faced a steep renewal hike under its traditional group health plan — a challenge that threatened the company’s efforts to improve benefits for employees.

Jenifer Combs, Prototek’s director of human resources, was determined not to shift the burden onto employees. Instead, the company adopted ICHRA, maintaining its existing healthcare budget while even reducing out-of-pocket costs for some team members.

“We get to pick the dollar amount,” said Ms. Combs. “From a budget perspective — especially since we’re private equity-held — that’s key. You can base it on that and next year make an adjustment if need be. The beauty is that employees get control over both their coverage and costs.”

In addition to providing stability for the employer, ICHRA also provides flexibility to employees. Rather than providing too little coverage for some employees and too much coverage for others, the individual market allows employees to choose the right amount for their families. With ICHRA, employees choose the services and providers that matter most to them. Whether it’s keeping a family doctor they like or choosing a network with the hospital closest to their home, the individual market offers dozens of options to meet the needs of every employee.

One of the roles of a private equity firm is to outfit its portfolio companies with the right systems and tools. For businesses staring down sky-high renewals or trying to assimilate a newly acquired company into their own, ICHRA is a powerful tool that controls costs while giving employees back control of their healthcare. It’s a proven lever for value creation.

About the Author
Jack Hooper is the CEO and co-founder of Take Command, a Dallas-based SaaS company that offers health reimbursement arrangement administration. Jack is a founding member of the HRA Council and has served as Chairman of the Board. He is a graduate of the Wharton School of Business and has been featured in The New York Times, BenefitsPro, Dallas Morning News, Bloomberg, and more. His motto? “Health insurance was never meant to be this complicated.”

Contact Jack Hooper at [email protected]

© 2025 Private Equity Professional | May 9, 2025

Janney Continues Acquisitive Ways with Buy of TM

by

Janney Montgomery Scott has agreed to acquire middle market investment bank TM Capital, a provider of M&A advisory services across the business services, industrials, healthcare, and consumer sectors.

TM Capital is led by CEO James Grien, has 17 managing directors and nearly 50 employees with offices in Atlanta, Boston, and New York City. TM Capital has completed nearly 60 M&A and private capital transactions from 2021 to 2022 with an aggregate $5.8 billion in value, and over 450 transactions with a combined value of $30 billion since the firm’s founding in 1989.

“We’re thrilled to join forces with Janney, a firm that shares our cornerstone values and vision. Janney brings us immediate scale and important resources to further enhance our client relationships,” said Mr. Grien. “Together, we offer a more diverse set of products and services across a combined eight industry verticals in which we have proven domain expertise. We’re looking forward to exceeding expectations and achieving new levels of success as part of the Janney team.”

The acquisition of TM Capital continues an acquisitive period for Janney’s Capital Markets Group and follows the July 2022 addition of 21 professionals from Boenning & Scattergood, including Managing Directors James Adducci, Christopher Chapman, Charles Crowley, Chad Hull, and Tony Latini; and the addition of several senior bankers this past year.

“We’re excited to welcome TM Capital to Janney,” said Joe Culley, the head of the capital markets group at Janney. “The tenured team brings nationally recognized experience in complementary and additive business lines to our existing investment banking practice, including greatly expanding our private equity client base. Their strong reputation will be an immediate value add to our business.”

At closing, TM Capital will continue to operate under its current brand with Mr. Grien and Jarrad Zalkin co-leading the business. Both Messrs. Grien and Zalkin will report to Matt Veneri, the head of investment banking at Janney.

“This acquisition showcases our strategic plan in action – two firms with shared values and similar cultures coming together to enhance their businesses and better serve their clients,” said Mr. Veneri, “The TM Capital team brings more than 325 years of combined experience and a mutual standard of excellence. We couldn’t ask for a better partner.”

Today, Janney’s Capital Markets Group has more than 200 professionals who provide investment banking, equities, and fixed income services to corporate, institutional, and municipal clients. Over the past 3 years, Janney has completed 283 capital markets and M&A transactions totaling more than $46 billion in value.

Philadelphia-headquartered Janney Montgomery Scott is a provider of wealth management, capital markets, and asset management services and is a wholly owned subsidiary of The Penn Mutual Life Insurance Company.

“We see a distinct opportunity to partner with boutique investment banking firms looking to scale, and we’ll continue pursuing acquisitions, lift outs, and strategic hires over the next several years,” added Mr. Culley.

Houlihan Lokey was the financial advisor to TM Capital on this transaction.

© 2023 Private Equity Professional | November 14, 2023