Lower-Middle Market Private Equity: A Deep Dive with Levi Pettit
Levi Pettit, a CFA® charterholder and MBA candidate at Pepperdine Graziadio Business School, brings unique insights to the world of Lower-Middle Market Private Equity (LMMPE) from his experience as an Investment Associate at a single-family office, where he managed private equity and venture capital portfolios.
Drawing from his background in investment management and commercial banking, Pettit explains that “LMMPE is generally defined as companies generating revenues between $1 – $40 million. This encompasses 99.9% of businesses in the USA.”
The former University of Texas at Dallas finance and economics graduate, who served as golf team captain and earned recognition as a Cleveland/Srixon Academic All-America Scholar, points out that larger funds typically find it “more efficient and cost-effective at making 10-20 large acquisitions per fund as opposed to making hundreds of $10 – $30 million investments in portfolio companies.”
Building on his experience in enterprise risk management and credit analysis at Veritex Bank, Pettit emphasizes both opportunities and challenges in the sector. “52% of families do not want to pass their family business down to their children,” he notes, highlighting a significant opportunity for LMMPE firms.
Regarding technological transformation, Pettit observes that “small businesses and public sector entities are not naïve. They know they will have to incorporate artificial intelligence into the infrastructure of their business to survive and grow over the next decade.”
However, the Magna Cum Laude graduate also stresses the importance of understanding risks, noting that “investors should be mindful of liquidity risks generally associated with private equity investments.”
Pettit concludes that while “LMMPE has historically generated significant returns and is poised to continue to do so,” success requires careful manager selection and thorough understanding of fund strategies. For more, be sure to follow Levi Pettit on Bluesky.