BNC 125 sponsor: Rob Edwards of Ridgemont Q&A
Sponsors of Business North Carolina’s 125 Private Companies
Rob Edwards is a partner and co-founder of Ridgemont Equity Partners, which spun off from Bank of America Corp. in 2010. Ridgemont’s staff has more than doubled in size in the last decade. Like many top N.C. finance executives, Edwards began his career at the Bowles Hollowell Conner & Co. investment bank in Charlotte. The Winston-Salem native and UNC Chapel Hill graduate also worked for Allied Capital Corp. in Washington, D.C., then earned an MBA at Harvard University. After a stint with McKinsey & Co., Edwards joined Banc of America Capital Investors in 1997.
He discussed Ridgemont’s path in the following interview:
Tell us about Ridgemont’s history.
Our roots have always been in North Carolina — our practice started in 1993 in Charlotte as the internal private equity investment arm of Bank of America and its predecessors. We transitioned out of the bank in the summer of 2010 and created Ridgemont Equity Partners. The six founders of Ridgemont have worked together for an average of 24 years and we’ve invested over $4.5 billion in more than 150 companies. Today, Ridgemont is the largest private equity firm in North Carolina and one of the largest in the Southeast.
What has been the key to Ridgemont’s growth?
We have raised more than $4 billion of capital since the formation of Ridgemont in 2010, and our team has more than doubled in size during that time. Our growth has been largely driven by our level of investment activity and portfolio responsibilities. Each year we review thousands of opportunities and we have closed 25 new investments over the last 12 months. About a third of those were new platform investments and the remaining were businesses we acquired through our portfolio companies.
Inc. named Ridgemont to its list of “Top 50 Founder-Friendly Private Equity Firms.” How do you partner with company founders?
We have a long history of partnering with entrepreneurs and have invested more than $1.2 billion in founder-led businesses over the past nine years. More than 70% of our platform investments have been situations where Ridgemont was the first institutional investor or re-backed the same management team over multiple transactions. In partnership with founders, we have realized revenue growth of over 115% across our portfolio by executing a variety of corporate development activities and other strategic initiatives. These initiatives have generated substantial long-term value. Building leading businesses alongside entrepreneurs is truly our passion — and we’ve had a lot of fun along the way.
How much of your work involves N.C. companies? Is that changing?
Ridgemont invests across North America as we tend to be mostly driven by sector-focused themes and growth potential. That said, North Carolina is home to many businesses across the industries in which Ridgemont is active — business and industrial services, energy, health care, technology and telecommunications.
We have invested in several businesses headquartered in the state including a third-party logistics business named Transportation Insight based in Hickory, and a building products distributor named The Cook & Boardman Group based in Winston-Salem. Additionally, many of our portfolio companies have locations and operations within North Carolina. There are some very interesting opportunities in utility services, transportation, health care services and software that we intend to pursue in the coming years. While we invest in businesses based across the U.S. and in Canada, we naturally have an affinity for companies headquartered in the Southeast and in North Carolina, in particular.
Why did the partners decide to operate the business here?
Charlotte is an ideal market to build a private-equity business. As a large financial hub in the Southeast, Charlotte has a history of developing an outstanding talent pool through experience gained at global and regional banks, consulting firms, principal investment practices and other professional service organizations.
There are also a number of undergraduate and graduate programs that produce high-quality candidates. About 55% of our employees earned at least one degree at a college or university in North Carolina. In addition, Charlotte is an attractive alternative to other cities given the number of job opportunities and quality of life, which has allowed us to recruit talented professionals from outside the state. Finally, Charlotte offers resources to assist in our growth, including leading professional service firms and banks and an airport with nonstop flights to business destinations across the U.S.
Why invest in North Carolina businesses?
There are many compelling reasons to invest capital in businesses with significant operations in North Carolina. First, the population growth has been among the fastest in the country for several years. Revenue is generated from a diverse set of industries, including financial services, energy, industrial, transportation, technology, health care, consumer products and services and other sectors.
From a geographic standpoint, we have an optimal location in the Eastern time zone with easy access to many of the most dynamic markets. The economic and political environment in North Carolina is business-friendly with the appropriate incentives in place to encourage businesses to relocate here, and to keep capital flowing into our market. We will absolutely continue to build Ridgemont in our Charlotte headquarters and seek investment opportunity within our state in order to perpetuate this growth and bolster North Carolina’s reputation of being a great place to live and work.