Investcorp sees opportunity to double investment with CrossCountry Consulting

'The reason why we think it [CrossCountry] will be resilient is that a lot of our services are not tied to those macro factors,' said Tayeh.

Investcorp is looking to at least double its investment in CrossCountry Consulting, a global business advisory company, claiming the sector has the potential to withstand the macroeconomic headwinds, said Dave Tayeh, the firm’s North America head of private equity.

Earlier this month, Investcorp acquired a majority stake in CrossCountry, a McLean, Virginia-based company that was founded in 2011 to provide accounting, finance, risk, operations, cyber, and technology-enabled transformation services to CFOs in public and private organizations.

With various offices across different continents, CrossCountry has over 700 professionals who work with clients in the private equity, financial services, life sciences, real estate and hospitality sectors, among others.

Tayeh said that CrossCountry has a compelling return potential with less downside risk. “We want to earn at least two-and-a-half times our money,” he said, adding that the financial advisory space has a very resilient outlook that can weather shocks to the economy.

“The reason why we think it [CrossCountry] will be resilient is that a lot of our services are not tied to those macro factors.”

What stood out for Investcorp in CrossCountry is the company’s collaborative team culture that can attract people to be part of a broader team, Tayeh said. “Finding the right culture in the right organization – and ensuring it’s structured to enable and facilitate continued growth over a sustained period of time – is really important.”

Another reason Investcorp invested in CrossCountry: “When you combine the resiliency and growth characteristics of the end market with the specifics around CrossCountry’s ability to grow – including its existing geography, services, opportunities for further penetration and potential for M&A – and pair it with a very highly cash-generative financial model…that is what creates a great risk adjusted return opportunity.”

In executing M&A to further scale CrossCountry, Tayeh said Investcorp will look at a combination of factors – such as the potential to add new geography, services and market access. “Doing it via acquisition of a firm that already has a nice presence can be more efficient than building it from scratch,” he said.

Dave Tayeh, Investcorp

Tayeh said CrossCountry’s edge lays in its ability to offer a suite of services in-house that many of its competitors cannot match. Therefore, clients “will look for firms like CrossCountry who have a demonstrated competence and expertise in their areas of focus, and who can deliver the right value proposition.”

Investcorp always brings the management teams from its portfolio companies together to reflect on the state of the economy and other business trends that are key in running businesses so that executives share ideas and learn from each other, Tayeh said.

Together with other strategies, this will be a sounding board for management.

“We do leverage as much as we can our experience across other professional services investments, whether directly working with the management team, or connecting CEOs and/or other senior executives together so that they can share thoughts and best practices,” he said.

Tayeh said Investcorp taps into experienced board members too to help steer their portfolio companies in the right direction, a strategy from where CrossCountry will benefit from.

“We are very aggressive commercially,” he said. “Any way we can to leverage our network to help our portfolio companies, we do it.”