Why searchers prefer larger targets

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Over the past few months, I’ve been presented with five separate opportunities that contemplated the acquisition of a company with $7M or more of EBITDA (this compares to the Search Fund average of $2.2M for the 2022-2023 cohort of Searchers).

While I acknowledge that five data points don’t constitute a trend, at the very least this has piqued my curiosity. While the Search Fund ecosystem has worried – seemingly for over a decade now – about the possibility of middle-market Private Equity firms moving down market, it’s interesting to ask whether the inverse may now be happening, at least to a certain extent:

Are Search Funds moving up market?