Episode summary
Billion-Dollar PE Firm on Complexity, Alpha, and Corporate Carve-Outs
How I Invest With David Weisburd
· · 33 min · Hosts: David Weisburd · Guests: Josh Adams
Summary
Josh Adams says OpenGate Capital has built its edge by leaning into complex, unloved, multi-jurisdictional businesses, especially corporate carve-outs and orphaned assets. He argues that the firm is not trying to be a financial engineer; it creates value through operational improvement and by turning messy carve-outs into standalone businesses that can later be sold to strategics. He says OpenGate has completed 37 corporate carveouts in 20 years and has learned a playbook for handling situations that many buyers avoid.
The biggest strategic shift is toward Europe, which Adams says offers more inefficiency than North America and therefore more opportunity. He says OpenGate now spends 70% to 80% of its time there, with local presence and sector expertise proving essential. Rather than waiting for bankers to bring deals, the firm goes directly to corporates, talks with CEOs, CFOs, heads of M&A, and divisional leaders, and uses what Adams calls a triangle offense of corporates, operators, and bankers to get in front of transactions early.
Adams also argues that private equity is becoming more concentrated, with large firms turning into asset management companies, while specialist firms should still win if they stay focused. He thinks alignment matters, because OpenGate invests meaningful GP capital alongside LPs, and he emphasizes that relationships, trust, and judgment compound over time just like investment returns.
Key takeaways
- Josh Adams says OpenGate’s edge comes from tackling complex corporate carve-outs and orphan assets that others avoid.
- Adams says Europe now absorbs 70% to 80% of OpenGate’s time because the market is more inefficient than North America.
- OpenGate tries to win on speed and certainty by speaking directly to corporates before a banker-led process starts.
- Adams argues specialist firms can outperform as private equity consolidates into larger asset-management platforms.
- Adams says meaningful GP co-investment changes behavior and keeps the firm aligned with LPs.
Notable quotes
“We think about oursel as not financial engineers but operational engineers”
“Europe has a tremendous amount of complexity, one of which that we navigated since 2007”
“our biggest way that we focus our time and energy is speed and certainty”
“we've done 37 corporate carveouts in 20 years”
“the benefit of focus is immediate. The benefit of synergy is theoretical”
How the episode opens
Complexity to us comes in the form of these complex unloved businesses orphan assets that ultimately have led to the businesses being really challenged. We think about oursel as not financial engineers but operational engineers. How do you create value?
It has to be an alpha generating kind of returns and that to us has always come in the form of what's in your control operational improvements. Josh, you're a partner at OpenGate Capital, billion-dollar firm based in New York in Paris. Before we started recording, you mentioned that you guys are shifting more towards the European market.
Why is that? Yeah. Well, we've been investing since 2005 and originally founded back in in Los Angeles, which is part of the DNA of myself and Andrew Niku, the founder of the firm, who came from Platinum Equity, which also is based there in in Los Angeles.
There's a little bit of history with Europe. Europe has a tremendous amount of complexity, one of which that we navigated since 2007. We opened an office in Paris, which was a little bit of a unique place to do it.
Being a Brit, it wasn't something I was that comfortable with at the time, but joined in 2012. We quickly saw the amount of opportunity in the European market. Later, we've now seen many firms move to Europe saying, "Oh, this is a great opportunity to be there.
And with all due respect, you've seen a lot of American suitcasing back and forth there. But you need to have a local presence with locals on the ground. And in Europe, more so than anywhere.
So for me, it's been a great opportunity of what we invest in complexity. So operationally focused firm investing in industrial corporate carbouts has been one of our biggest things over the last 20 years in Europe they're plentiful and the complexity is plentiful.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private equity complexity
- corporate carve-outs
- europe vs north america opportunities
- sourcing and deal timing
- operational value creation
Companies and tickers mentioned
- OpenGate Capital
- Platinum Equity
- AlphaSense
Watch the episode
Watch “Billion-Dollar PE Firm on Complexity, Alpha, and Corporate Carve-Outs” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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