Investment Parameters - Direct Investing
Where we primarily focus, and why it matters.
Transaction Type
Acquiring majority stakes in founder- and family-owned businesses, specializing in critical ownership transitions and recapitalizations. In certain circumstances, we will consider a minority equity investment
Target Size
Focusing on lower middle-market enterprises with stable cash flows. EBITDA is typically ranging between $1M and $7M.
Holding Period
Patient capital with a long-term horizon. We are built to hold investments across multiple cycles to ensure legacy preservation.
Geography
Headquarters must be located within the Continental United States, with a preference for the East coast and a focus on the Tri-State and Mid-Atlantic areas so we can leverage our domestic operations and advisory network.
Beyond
Direct Investing
In addition to our core strategy of investing directly in founder-led businesses, GraceCap deploys capital across complementary strategies that broaden our reach and deepen our market perspective:
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FUND COMMITMENTS - Selective limited partner positions with specialist equity and credit managers whose strategies complement our direct portfolio and extend our access to opportunities outside our core focus.
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CO-INVESTMENTS - Participating alongside trusted general partners in transactions that fit our investment thesis but exceed our typical check size, allowing us to engage with larger opportunities while maintaining disciplined exposure.
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REAL ESTATE - Two paths, depending on the opportunity: passive participation in large syndicated transactions led by established sponsors, and active sponsorship of commercial acquisitions where GraceCap leads the deal and the asset management work that follows.
What we look for
We seek durable scalable businesses with defensive market positions, low customer concentration, and a clear reason to exist in their niche.
Favorable industry dynamics
Scalable, with operating leverage
Non-cyclical demand profile
Consumable product or service
Sectors of focus
Deep, hands-on experience across five industry groups.
Industrial Services
Companies performing recurring, contracted work for industrial customers — funded out of their customers' operating budgets rather than capital budgets, and often providing mission-critical services that create meaningful switching costs.
Niche Manufacturing
Companies that design and produce specialized products for narrow, well-defined end-markets where scale, brand, or proprietary engineering create defensibility. Often critical components for infrastructure, aerospace, or medical applications with high barriers to entry.
Business Services
Asset-light service providers with recurring or contracted revenue, operating in fragmented end-markets where growth is driven by labor productivity and customer retention rather than capital investment.
Distribution & Value-Added Distribution
Companies that source products from manufacturers and resell them to end customers — earning margin by doing meaningful work beyond moving boxes. That includes technical product selection, custom configuration, kitting and light assembly, application engineering, customer training, just-in-time delivery, or specialized inventory holding.
Healthcare Services
Companies that deliver care, support care delivery, or process the administrative and financial flows around care. Not pharmaceuticals, medical devices, or diagnostics — services only.
Building Products
Manufacturers and distributors of products used in residential and commercial construction — from specialty components to systems-level offerings. We focus on businesses with defensible product positions, durable contractor or specifier relationships, and exposure to repair-and-remodel demand alongside new construction.