Century City-based Atar Capital is a private investment firm targeting lower middle-market companies working to create social or environmental impact. Atar specializes in carve-outs and seeks companies making between $50 million and $1.5 billion in revenue for its platform investments.
For Founder and Managing Partner Cyrus Nikou, the ability to invest in worthwhile companies while still generating returns is doable with the right approach. Atar serves as a long-term investor for its portfolio companies, providing assistance with scaling and improving operations and financial performance.
What drew you into impact investing and how does Atar Capital’s work align with your interests?
I am a firm believer that companies can innovate in a way that both benefits today’s consumers and builds a better world for future generations.
At Atar Capital, we strive to be a source of positive energy. Our ESG (environmental, social and governance) investments are a way to both generate financial returns and do good for humanity. Whether we’re bridging the gap between traditional and electric vehicles, protecting infrastructure for current and future generations, or helping create eco-friendly alternatives to plastic products, we believe there’s sustainable work to be done in every industry.
I work with my team to find innovative solutions that balance immediate market needs with long-term sustainability goals, resulting in strong financial performance.
What are your investment criteria/requirements?
At Atar Capital, we focus on lower middle-market investments and are strategic about the sustainability aspect of any industry we consider. We look at a company’s potential for growth, supply chain resilience, existing ESG principles and opportunities for organic and strategic inorganic growth as we consider investments.
Of course, we also consider the human element: What infrastructure exists to build and support best-in-class management teams? In looking for companies that not only promise financial returns but also align with our broader vision of creating value through operational improvements and societal contribution, we create holistic models for long-term sustainable growth and overall resilience.
How does your firm strike the balance between profitability and social good?
Atar Capital’s focus on acquiring and growing companies with energy-efficient, carbon-neutral, and sustainable products and services reflects the increasing importance of ESG considerations in the private equity industry.
Our sustainability- and purpose-driven investments showcase the potential of the current and future market: Consumers want sustainable solutions that solve problems and reduce harm to the environment.
By meeting them where they’re at – such as through the energy-efficient solenoids and other parts that (our portfolio company) Solero Technologies develops for traditional, hybrid and electric vehicles – we’re optimizing the current market and laying a foundation for a truly sustainable future.
Can you provide an example of one of Atar’s affiliate companies that embodies the firm’s mission? How has the company grown and/or evolved under your ownership?
I’m very proud of the work my team and I have done to support our affiliate company WinCup, the makers of the marine-biodegradable phade straw. Made from a revolutionary material that operates as well as traditional single-use plastic but is home-compostable and fully marine biodegradable, these straws solve a real consumer pain point.
We have worked with WinCup CEO Brad LaPorte and his team to expand phade from a single page in WinCup’s portfolio to a line of cutlery, paper cups and more. I’m confident that this technology will one day be the standard for restaurants and bars, doing away with both unsatisfying paper and plastic alternatives.
What differentiates Atar in the private equity space?
Atar is differentiated by our hands-on approach to working with company leadership every day, as well as reinforcing trust in employees as we optimize efficiency and work toward sustainable growth. Our entrepreneurial culture and flexible investment horizon allow us to serve as a true partner to management teams.
We also take a patient, long-term approach to value creation as a result of the flexibility that our family office structure affords us. This means we can potentially take on more complex turnaround situations that may be less attractive to traditional private equity funds with shorter investment horizons.
What does the future of impact investing look like to you?
The world of impact investing is constantly undergoing changes, with pragmatists and evangelists taking different approaches. A number of new players are also coming into the lower middle market, recognizing the potential that this sector holds.
This heightened competition may require private equity firms to differentiate themselves and find unique ways to source and execute deals, such as leveraging their industry expertise, relationships and ability to provide value-added support to portfolio companies. At Atar Capital, we know the landscape well, and we know how to work with our affiliate companies to maximize results. We’re committed to our work in making sustainability a reality both now and in the future.
