Four questions that guide our private equity investments

In private equity, discipline comes from being clear about what matters and applying that clarity consistently. At Pacharbor Capital Group, we approach investing as fundamental investors. We focus on quality businesses in sectors we know deeply, where we believe we can be constructive partners and help create long-term value.

That means staying anchored in fundamentals across sectors, geographies, and market environments, and resisting the temptation to chase short-term momentum. A consistent way of evaluating opportunities, with teams that have been tracking specific sub-sectors and market trends for decades, helps us align as a team and remain focused on what ultimately drives durable performance.

Question 1: Does the business have a reason to exist?

We begin by assessing whether a company plays a meaningful role for its customers and stakeholders. Put simply, if the business were no longer operating, would anyone feel the impact?

We look for companies that are embedded in the ecosystems they serve – businesses customers rely on as part of their day-to-day operations. When a company is essential to its customers, it often reflects durable demand, long-standing relationships, and a value proposition that extends beyond price.

Starting here keeps our focus on relevance and purpose before moving into deeper analysis. It anchors our thinking in whether the business truly matters to the people it serves.

Question 2: Is it a good business?

Once a business clears that first question, we focus on whether it has strong underlying fundamentals. This includes the attractiveness of the sector, competitive positioning within the industry, and whether the business has the potential to benefit from structural or long-term tailwinds.

We look for businesses that, in our view, are built to last, with management teams that are capable of driving continued performance. These are not just companies performing well in a particular moment, but those positioned to sustain and grow value over time. This perspective helps us distinguish between short-term performance and long-term resilience.

Question 3: Do we have a reason to own it?

Not every good business is a good fit for Pacharbor Capital Group. This question forces us to be honest about whether we bring something distinctive to the table.

We look for situations where we can connect our sector expertise, operational capabilities, global network, or past experience with similar businesses in order to bring differentiated insights and angles to the opportunity, seeking to drive value creation. If we do not believe we can be constructive partners and help the business through its next phase of growth, we are comfortable stepping back.

This filter is about alignment. Alignment between the opportunity, the management team, and what Pacharbor Capital Group can contribute.

Question 4: Are we investing at a valuation that supports our return objectives?

Valuation discipline is intended to apply to every investment decision we make. No matter how attractive a business may be, price matters.

By the time we focus on valuation, we have already spent significant time understanding the business, its role in the industry, and whether we believe we can be good partners. That understanding is built over years of sector focus, pattern recognition, and work alongside similar companies, helping us develop proprietary insights and the conviction behind them. That work helps ensure we are evaluating the opportunity with a clear view of the fundamentals.

We look at whether the entry valuation supports our return objectives and reflects the long-term characteristics of the business and what we believe we can do with it under our ownership. This discipline helps keep decision-making grounded and consistent, particularly in markets where enthusiasm can move faster than fundamentals.

Valuation does not drive the decision on its own, but it serves as an important check. It helps ensure that our investment approach remains focused on risk-adjusted returns and long-term value creation.

The filters applied in practice

To see how this discipline translates into real investment decisions, consider Medline, one of our recent portfolio company IPOs.

Medline is a long-standing healthcare company that supplies medical products and services to hospitals, clinicians, and healthcare systems globally. With a large operational footprint and deep relationships across the healthcare ecosystem, it plays a meaningful role in supporting patient care and the day-to-day operations of healthcare providers.

As we evaluated the opportunity, Medline provided a clear example of how our approach helps build conviction – grounded in the role a business plays in its industry, the durability of its fundamentals, and the opportunity for partnership over the long term.

Medline

When you walk into almost any hospital in America, you’ll find Medline products. They’re on the shelves in supply rooms, loaded on carts rolling down hallways, and in the hands of doctors and nurses. With 43,000 employees and more than 2,000 trucks delivering supplies every day, Medline has become part of the invisible backbone of the US healthcare system, with more than 50 years of uninterrupted revenue growth.

"Medline is the largest vertically integrated medical products manufacturer and distributor to healthcare facilities. Next time you're in a hospital or a doctor's office, you will undoubtedly notice Medline products.”

-Steve Wise

1. Does this business have a right to exist?

For Medline, we believe the answer could not be clearer. The company plays a critical role in the healthcare system. Its products are used every day in hospitals, surgical centers, and clinics. If the company were no longer operating, customers would feel the impact immediately.

That sense of responsibility is something we consider Medline to take seriously. The business is focused on service, reliability, and execution, and that mindset shows up in how the company operates day to day.

2. Is it a good business?

Medline’s long history is one of reinvention and adapting to the needs of its customers. Founded as a textile company making aprons for butchers, it pivoted during World War I to supply scrubs and gowns for nurses. Decades later, a customer complaint about distribution sparked another transformation, prompting Medline to get into prime vendor distribution.

Over time, the company expanded beyond manufacturing into distribution, which allowed it to simplify procurement and improve reliability for healthcare providers. That evolution was driven by listening to customers and responding to what they needed. The result is a business with durable demand, strong customer relationships, and an operating model built to support scale.

3. Do we have a reason to own it?

Medline did not need capital alone. The company’s scale and complexity, which spans thousands of product lines, global sourcing, and has one of the largest private distribution networks in the US, required partners who could support the next phase of growth while respecting what had made the business successful over time.

Pacharbor Capital Group and its partners brought experience working with large, complex, family-led businesses, as well as healthcare expertise and capabilities across procurement, logistics, digital and data science, and government relations. The goal was not to change what worked, but to provide resources and support that could help the company continue to scale.

4. Are we investing at a valuation that supports our return goals?

Valuation discipline was an important part of the decision to invest in Medline. By the time valuation came into focus, we had already developed a deep understanding of the business, its role in the healthcare system, and the strength of the management team. That work allowed us to assess the opportunity with a clear view of both the fundamentals and the long-term potential.

At that stage, in our view, the fundamentals were clear: this was an essential business with durable demand, a culture anchored in service, and a leadership team that had proven itself through change. That foundation gave us confidence that we were underwriting a business with resilience and visibility.

While this approach does not guarantee outcomes, it works to ensure that opportunities are evaluated with consistency and a focus on fundamentals. It provides a shared way of thinking about risk, partnership, and long-term value creation.

Medline is one example of how we seek to apply this discipline in practice. It reflects the type of business we look to invest in and the kind of partnership we aim to build over time. While every investment is different, the way we evaluate opportunities remains consistent, helping us stay aligned as a team as we deploy capital.