February 8, 2016
Interviewed by: Privcap
Video Clip
Login to view full video

The CFO and Operating Partner

Operating partners at Z Capital have experience spanning different industries, allowing for the opportunistic private equity firm to be agnostic when it comes to its middle market investments. The firm’s managing director and operating partner, Tim Clayton, says the approach has worked well.

Operating partners at Z Capital have experience spanning different industries, allowing for the opportunistic private equity firm to be agnostic when it comes to its middle market investments. The firm’s managing director and operating partner, Tim Clayton, says the approach has worked well.

The CFO and Operating Partner
With Tim Clayton of Z Capital

Mike Straka, Privcap: Welcome to Privcap. I’m Mike Straka, joined by Tim Clayton, Managing Director and Operating Partner at Z Capital Partners. How are you?

Tim Clayton, Z Capital: Good, Mike. How are you doing?

Straka: First of all, what is your role? You’re Managing Director and anOperating Partner—explain what that means.

Clayton: Operating Partner really…focuses on improving the operations of the different companies we own. At Z Capital, we’ve invested a lot of resources in bringing together an array of functionally-oriented operating partners to really be able to drive growth initiatives and value-improving initiatives at the different operating companies. My role is the oversight of the CFO function within the operating companies.

With all my background in the Pricewaterhouse (before—years ago) and then being a CFO of a number of different companies since then, Jim asked that I work with the different companies to help oversee their CFOs to make sure they’re looking at the right things every day and developing the right value-oriented improvement guidelines. I work with the other operating partners who are focused on supply-chain initiatives, manufacturing improvements and marketing improvements. Those are the types of things the operating partners will do.

Straka: What are some of those verticals you’re working in?

Clayton: Z Capital is a very opportunistic, value-oriented firm, so we look at a number of different companies that go across a number of different industries. There’s no one industry we concentrate on, but the different members of the operating partners can apply that expertise, if you will, to all these different companies. So, we’ll have an operating partner whose primary background and expertise is in supply-chain management and manufacturing. So, companies that have those elements—he’ll spend a lot of time working with those management teams.

We have another one who’s focused on more marketing capabilities, others that are focused on IT and another focused on human resources. Then, mine is the CFO or the financial-oriented disciplines within a company. We all work together to work on improving the activities and operations of the different companies.

Straka: What kind of companies does Z Capital look for?

Clayton: I tell you, that’s a good question. We will look across spectrums for companies that have a value—it’s a value-oriented type of strategy at the firm, but very opportunistic also. So, we’ll look for things that need performance improvement, if you will, turnaround capability. That’s why the operating partners are there—to help drive those value enhancements and turnaround types of initiatives. We’ll look for companies that might just have a bad balance-sheet situation or others that might need growth capital, and we utilize the firm’s capabilities and intense research capabilities to find tuck-in acquisitions to help drive the scale of those businesses to help add value. It’s any number of those different types of companies that we would look for, without any real industry concentration.

Straka: What’s your sweet spot? You’re in middle market, right?

Clayton: I would say we like more of what I’ll call traditional businesses: manufacturing, distribution or marketing kinds of companies. We don’t do a lot of high-tech or healthcare types of companies, but the vast array of businesses we’ll get involved with are those traditional, middle-market types of businesses. Jim has talked about MSDP, an auto-parts manufacturer we’ve been involved with over the past 18 months or so. We’re involved with a restaurant business in California. We’re involved with a direct-sales company, along with a consumer-products business. So, it’s a lot of basic kinds of businesses.

Register now to watch this video and access all content.

It's FREE!

  • CHOOSE YOUR NEWSLETTERS:
  • I agree to the Privcap terms of use and privacy policy
  • Already a subscriber? Sign In

  • This field is for validation purposes and should be left unchanged.