Firm Opens S.F. Office to Help Private Equity Investors Embrace Tech’s Growth
By, Mark Calvey, Senior Reporter, San Francisco Business Times
A slew of private-equity backed retailers going bankrupt, including San Francisco-based Gymboree this week, has more private equity firms appreciating the recurring revenue and growth that can be found in software and technology companies. Some are looking for tech investment opportunities within popular sectors for private equity investors, such as healthcare, business services and industrial manufacturers.
Rishi Jain is managing director and head of the western region for Accordion: “The private equity partners I speak with tell me they’re investing in technology or evaluating opportunities in technology,” said Rishi Jain, who is managing director and head of the Western region, leading the new San Francisco office of Accordion. “We’re excited to be here, helping private equity firms and their portfolio companies grow.”
Accordion advises some of the nation’s largest private equity firms, including Hellman & Friedman and Francisco Partners, both based in San Francisco. The firm works closely with the portfolio companies’ chief financial officers to “implement new mandates and facilitate decision-making.” Accordion’s new San Francisco office includes Jain and a couple of other professionals. He anticipates the office will employ 10 to 20 people by year-end as the firm hires talent from private equity firms and the Big Four accounting-and-consulting firms.
Jain says he’s spending this afternoon looking at 10 possible locations in San Francisco’s Financial District to set up permanent shop in 3,000 to 4,000 square feet. “It has always been part of our strategic vision to have a physical footprint in the Bay Area to complement our existing portfolio of clients to accommodate significant corporate growth,” said Nick Leopard, founder and CEO of Accordion, which serves more than 150 private firms and their portfolio companies.
“While Bay Area funds and their portfolio companies benefit from the type of outside operational expertise and support Accordion provides through its New York headquarters, they are, in many ways, unique animals with unique — and exciting — operational needs,” Leopard said. “Rishi not only uniquely understands the San Francisco market and its technology roots, but he has also served as both an operational executive and an operational adviser.”
Jain, who previously helped lead Alvarez & Marsal’s San Francisco office, also has experience in tech investment banking. Alvarez & Marsal, which some dub “the grim reaper of debt,” is often focused on distressed situations. But Jain said growth prospects and recurring-revenue models in the software and tech sectors increases the odds that private equity firms can turn make their investments profitable. It’s also a plus that there’s a long list of potential acquirers with deep pockets in the tech sector, especially given the powerful economics that come with software companies adding to their suite of products through acquisition. It’s those attributes that drew him to Accordion.
“With record fund-raising and a greater sponsor emphasis on operational improvements, there is no more exciting time to be a part of the private equity industry or its growing West Coast emergence,” Jain said. Plus, Jain learned early to look before he leaps: He broke his toe jumping off a couch as a 2-year-old.