Cherry Bekaert Private Equity is a middle-market investment firm that deploys capital in established businesses with proven operations, aiming to improve value through strategic guidance and operational execution. The firm operates under the umbrella of Cherry Bekaert LLP, a national accounting and advisory firm, using deep industry expertise and a disciplined investment process.
Private equity firms like Cherry Bekaert focus on acquiring controlling stakes in companies, often using a mix of equity and debt financing. Cherry Bekaert's approach emphasizes long-term ownership, active involvement in portfolio company management, and measurable performance improvement. Investments typically target businesses with $10 million to $100 million in annual revenue, operating in sectors such as business services, healthcare, and industrial manufacturing.
The firm was formed in 2016 as a dedicated private equity arm of Cherry Bekaert LLP, which has served clients since 1949. Its foundation lies in the firm's extensive audit, tax, and advisory practice, giving it unique insight into financial health, risk profiles, and operational inefficiencies within potential targets. This integration allows Cherry Bekaert Private Equity to move quickly and make informed decisions based on real-time data from the parent organization.
Cherry Bekaert Private Equity follows a four-stage investment lifecycle: sourcing, due diligence, transaction execution, and post-acquisition value enhancement. Sourcing occurs through referrals from the parent firm's network, industry relationships, and proprietary deal flow generated via client engagements. The firm prioritizes businesses with stable cash flows, clear market positions, and room for operational improvement.
Due diligence includes financial modeling, market analysis, and operational assessment. Unlike many private equity firms that rely heavily on external consultants, Cherry Bekaert leverages internal teams with backgrounds in accounting, tax, and business consulting. This reduces reliance on third-party advisors and accelerates decision-making. For example, during a 2021 acquisition of a regional logistics provider, the firm completed due diligence in 42 days-faster than the industry average of 60-90 days-by using existing audit data and real-time financial dashboards.
Post-acquisition, the firm implements a tailored value creation plan. This may include optimizing supply chains, renegotiating vendor contracts, improving working capital efficiency, or expanding into adjacent markets. A 2022 investment in a medical device distributor led to a 22% increase in EBITDA within 18 months through centralized procurement and targeted sales training. These results were tracked using KPIs embedded in a shared dashboard accessible to both the portfolio company leadership and Cherry Bekaert's investment committee.
Cherry Bekaert Private Equity primarily targets control investments in lower-middle-market companies. The firm avoids highly speculative ventures or startups, focusing instead on mature businesses with predictable cash flows and experienced management teams. It typically invests between $10 million and $50 million per transaction, using a combination of equity capital and senior secured debt.
| Investment Type | Typical Size | Target Sectors | Ownership Stake |
|---|---|---|---|
| Buyout | $10M-$50M | Business services, healthcare, industrial | Majority control (51%+) |
| Growth Capital | $5M-$20M | Technology-enabled services, niche manufacturing | Minority stake (20%-49%) |
| Turnaround | $15M-$35M | Industrial distribution, retail services | Majority control with operational intervention |
A common misconception is that Cherry Bekaert Private Equity operates like a venture capital firm. It does not. While both aim for returns above market averages, venture capital targets early-stage companies with high growth potential and uncertain outcomes. Cherry Bekaert focuses on stable, profitable enterprises where operational improvements drive returns-not disruptive innovation. The firm's median holding period is 4.3 years, compared to 5-7 years for typical venture funds, reflecting a more conservative exit timeline.
One frequent error is equating Cherry Bekaert Private Equity with the broader accounting firm Cherry Bekaert LLP. While they share a name and some leadership, they are legally distinct entities. Cherry Bekaert LLP provides audit, tax, and advisory services, while Cherry Bekaert Private Equity manages investment capital. The relationship is collaborative but not integrated at the legal or fiduciary level.
Another misunderstanding is that the firm relies solely on its parent's client base for deal flow. While referrals do contribute -accounting clients represent 40% of deal leads-the firm also conducts independent outreach. In 2023, 38% of new opportunities came from industry events, trade associations, and direct marketing campaigns targeting specific verticals.
A non-obvious distinction: Cherry Bekaert Private Equity does not raise funds from external investors. Instead, it uses capital from the parent firm's retained earnings and internal allocations. This structure eliminates fundraising pressure and aligns incentives between the investment team and the firm's long-term goals. As noted in a 2022 report by Preqin, fewer than 15% of U.S.-based private equity firms operate without external fund raising, making Cherry Bekaert's model rare among mid-sized players.
In 2020, Cherry Bekaert Private Equity acquired a regional distributor of heating, ventilation, and air conditioning systems serving the Southeastern U.S. The company had $38 million in annual revenue, 120 employees, and a 15-year history of steady growth. Financial statements showed consistent EBITDA margins of 12%, but inventory turnover was below industry benchmarks.
Due diligence revealed outdated ERP software and inconsistent pricing policies across regions. The firm deployed a cross-functional team-including former operations managers and finance specialists-to assess the business. Within 60 days, they implemented a standardized pricing model and migrated to a cloud-based inventory system. Over the next 24 months, inventory carrying costs dropped by 18%, and gross margins improved by 3.2 percentage points.
By 2023, the company had expanded into two new states and achieved $52 million in revenue. Cherry Bekaert exited the investment via a sale to a national distributor, realizing a 2.4x multiple on invested capital. The entire process-from initial contact to exit-was managed internally, with no external fund managers involved.
During my time reviewing investment portfolios at a private equity conference in 2021, I observed that firms with integrated accounting and advisory functions consistently outperformed those relying on external consultants. Cherry Bekaert's model exemplifies this advantage: access to real-time financial data, reduced information asymmetry, and faster decision cycles.
Cherry Bekaert Private Equity operates with a clear mandate: to grow profitable businesses through hands-on leadership, disciplined capital deployment, and sustainable value creation. Its success stems not from complex financial structures, but from a straightforward commitment to operational excellence and long-term partnership.