E-commerce technology is a great example of how we are working to share knowledge.
Many of the e-commerce innovations being developed by our venture companies are applicable to helping our later-stage companies better serve their customers. In today’s environment, customers are seeking online ordering, customer service and other technology-enabled capabilities regardless of whether it is a consumer-oriented business or a company
selling an industrial product. Pritzker Group’s experience across the full spectrum of early
and later-stage enterprises creates a unique platform for innovation and growth.
How do you measure an investment in innovation against the returns?
MN: Investing in innovation demands a long-term perspective. For example, one of
our companies, Signicast, wanted to build a state-of-the-art, industry-leading facility for the
production of highly automated, precision-casted parts. After four years of strong growth,
Signicast needed the additional capacity this facility would provide and wanted to offer expanded capabilities to its customers.
While most private equity firms might look to monetize their investment after four years,
Pritzker Group supported the $50 million facility expansion because it will further Signicast’s
market-leading position and generate solid long-term returns. Because we’re unencumbered
by the need to sell businesses and return capital to investors within specified time frames,
we’re able to give companies latitude to make smart investments that will pay off over the
When assessing a company, what types of screens do you use to evaluate a
team’s ability to innovate?
MN: There are several key data points we use to evaluate a management team’s ability to
innovate. First, we review the company’s history of new product or service introductions. In-
novative companies have a robust pipeline of new products and strive to have a meaningful
percentage of their revenues from products that are less than three years old.
Second, we conduct market checks with key customers, competitors and other market
participants. Then, we assess a company’s profitability. Innovative companies create pre-
mium products and services customers are willing to pay more for, which in turn leads to
Finally, we test management teams and company cultures to see if they are receptive to
new ideas and open to working in true partnership with us. That’s essential. You cannot be
wedded to today if you hope to innovate for the future. //
Pritzker Group Private Capital is a Chicago-based middle-market private equity firm with
North American portfolio holdings.
Q&A WITH MICHAEL NELSON // Investment Partner, Pritzker Group Private Capital