Gerry Cardinale, RedBird founder, managing partner and chief investment officer, and Andrew Lauck, partner, shared the firm’s strategy for the investment with PE Hub, including how Go Rentals fits in with the New York firm’s portfolio.
A Newport Beach, California-based luxury car rental provider, Go Rentals was co-founded by brothers Kavous and Kaye Gitibin in 1995, and they still lead the company.
Go Rentals has “all the attributes of what we like,” Cardinale said. “It’s a closely held business, a family business with a very entrepreneurial DNA that has built a scalable business over a long period of time that clearly has legitimacy and differentiation in the marketplace.”
RedBird also invests in the private aviation industry, which has natural connections to Go Rentals’ business.
In 2020, RedBird invested in Jet Linx, an Omaha, Nebraska-based private jet membership and aircraft management company. RedBird is the largest investor in Jet Linx and is in a shared control position.
In 2021, RedBird invested in Blade – a New York-based service that flies people in and out of city centers via helicopter and jet charters – when the company went public in a SPAC. The PE firm increased its stake in Blade to 5 percent in January.
Also in 2021, RedBird was a minority investor in BETA Technologies, a Burlington, Vermont-based aerospace manufacturer developing electric vertical takeoff and landing aircrafts.
An influence in RedBird’s interest in Go Rentals was an already established channel partnership with Jet Linx, in which clients could rent a luxury car from Go Rentals to ride in after flying on a private jet with Jet Linx.
Lauck said there’s potential for additional customers in sports, media and film for Go Rentals’ services.
Those industries are right up RedBird’s alley. The firm counts investments in sports teams like the Boston Red Sox and AC Milan and media outfits such as LeBron James and Maverick Carter’s SpringHill Entertainment.
“This is a platform that has portability to so many other markets, but it’s anchored in service at the end of the day,” he said. “They are without a doubt the best in class service. It’s the exact car that you want, when you want it, where you want it.”
After the travel pandemic-driven travel drought, the floodgates are now open.
“I think you’ve seen it across the spectrum on travel over the last year and particularly in 2023,” Lauck said. “Travel is a booming category that’s heavily driven by pent-up demand, and today it’s playing out as a release of the backlog of people who couldn’t get to where they wanted to go in 2020 and 2021.”
“The challenge with private equity today is that everybody says they add value, but to do that, you really need to shift the focus a bit towards writing business plans, not just investment committee memos,” Cardinale told PE Hub. “When I started out 30 years ago, showing up with money was the value add, but today everybody has money, so how do you make a difference?”
Expertise is RedBird’s differentiator.
“Talk is cheap,” he said. “Adding value to entrepreneurs in their domain is very hard to do. We try to invest in areas where we bring legitimate expertise.”