H.I.G. Capital Expands Small-Cap Investment Capabilities Through Team Growth and Fund Development

Small-cap and growth equity investments have become focal points for H.I.G. Capital’s expansion strategy, with the firm building a dedicated 40-person team targeting control equity investments in North American companies with EBITDA under $15 million. The approach addresses underserved market segments where operational complexity and limited institutional competition create attractive opportunities.

Harrison B. Davis joined H.I.G. as Managing Director within the Small-Cap & Growth team, bringing over 15 years of lower middle market private equity experience. Davis previously served as Partner and Co-Head of TZP Group’s Small-Cap strategy before transitioning to H.I.G.’s Miami office.

“Harrison’s deep perspective and operational expertise, coupled with his investment acumen in the small-cap sector, will further strengthen our platform,” said Camilo E. Horvilleur, Co-Head of the H.I.G. SCG Fund. “We look forward to partnering with him as we continue building the leading small-cap private equity franchise.”

Davis’s background spans business services, industrials, consumer, and technology sectors with experience at Brown Brothers Harriman Capital Partners and management consulting roles advising private equity-backed companies. His expertise addresses operational challenges and growth initiatives characteristic of small-cap investments.

Small-Cap Investment Characteristics

Companies with EBITDA under $15 million often face operational complexity, limited management resources, and growth constraints addressable through capital infusion and operational support. H.I.G.’s small-cap strategy leverages the firm’s resource advantages and operational expertise to invest in businesses with elements of business, industry, or transactional complexity.

The dedicated SCG team provides specialized focus addressing small-cap investment requirements differing from larger middle market transactions. Team members develop sector expertise, operational capabilities, and transaction execution skills specific to smaller companies requiring hands-on involvement and patience throughout development.

Portfolio company support extends beyond capital provision to include management team enhancement, operational process implementation, technology system deployment, and strategic planning assistance. H.I.G.’s organizational resources enable small-cap companies to access expertise and capabilities unavailable to competitors their size.

Transaction sourcing in small-cap markets requires proprietary relationships with business owners, intermediaries, and industry participants. H.I.G.’s team develops networks across sectors and geographies identifying investment opportunities before competitive processes or through situations where sellers value partnership over price optimization.

Growth Equity Investment Approach

H.I.G. Growth Partners targets companies with established business models and expansion opportunities through market development, product enhancement, or geographic expansion. The strategy emphasizes minority and majority investments in businesses demonstrating traction, product-market fit, and scalable operations.

The GLD Shop exemplifies H.I.G. Growth’s investment approach, with the Miami-based jewelry brand achieving revenue growth exceeding 130% over four years while reaching substantial profitability levels. The company’s evolution from digital disruptor to category leader demonstrates H.I.G.’s ability to support brand development and operational scaling.

“GLD’s evolution from a digital disruptor to category leader has been part of our aligned vision with Christian and the senior management team since our initial investment,” said Evan Karp, Managing Director at H.I.G. Growth. The partnership enabled team expansion, product portfolio development, and marketing strategy enhancement driving growth.

Growth equity investments typically involve less operational restructuring than traditional buyouts while requiring strategic guidance, network access, and capital support enabling accelerated expansion. H.I.G.’s approach balances management team autonomy with value-added support addressing specific growth initiatives and operational priorities.

Operational Value Creation in Small-Cap Companies

Small-cap portfolio companies benefit from H.I.G.’s operational resources including finance function support, technology implementation guidance, sales and marketing expertise, and strategic planning facilitation. The firm’s hands-on involvement addresses capability gaps while building organizational infrastructure supporting sustainable growth.

Management team development represents critical value creation drivers in small-cap investments where founder-led businesses require professional management capabilities. H.I.G. assists with executive recruitment, organizational design, and talent development initiatives strengthening leadership teams and operational execution.

Financial controls and reporting systems implementation provides visibility enabling data-driven decision-making and performance management. Small companies often lack sophisticated financial infrastructure, creating opportunities for improvements generating operational benefits and facilitating future capital raising or exit transactions.

Technology platform deployment addresses operational inefficiencies and customer service limitations constraining growth. H.I.G. works with portfolio companies to evaluate technology requirements, select appropriate solutions, and implement systems enhancing productivity and competitive positioning.

Market Dynamics and Investment Opportunities

Small-cap markets remain fragmented with limited institutional capital competition compared to larger middle market segments. This dynamic creates pricing advantages and opportunities for investors with operational capabilities and patience supporting longer hold periods and complex situations.

Business services, specialized manufacturing, niche consumer products, and technology-enabled services represent priority sectors where H.I.G. sees attractive small-cap opportunities. Companies in these sectors often demonstrate defensible market positions, recurring revenue characteristics, and growth potential through operational improvements or market expansion.

Founder transitions create investment opportunities as business owners seek liquidity while maintaining involvement through minority ownership or consulting relationships. H.I.G.’s partnership approach and operational support capabilities resonate with entrepreneurs valuing succession planning and business continuity alongside financial considerations.

Add-on acquisition opportunities enable small-cap platforms to achieve scale through consolidation strategies. H.I.G.’s acquisition capabilities and capital resources support systematic buy-and-build programs enhancing competitive positioning and creating liquidity options through larger platform values.

H.I.G. Capital’s Small-Cap Competitive Advantages

The firm’s scale and resources provide advantages in small-cap markets where portfolio companies benefit from access to expertise, relationships, and capabilities unavailable through smaller private equity firms. H.I.G.’s 500+ investment professionals and global platform enable specialized support across functions and geographies.

Sector expertise developed across H.I.G.’s broader platform transfers to small-cap investments, providing portfolio companies with industry knowledge, market insights, and relationship networks. This expertise informs investment decisions and supports value creation initiatives addressing sector-specific opportunities and challenges.

Patient capital approach enables H.I.G. to pursue longer-term value creation strategies appropriate for small-cap companies requiring operational improvements and market development time horizons. The firm’s fund structures and investor base support holding periods accommodating complex situations and gradual transformations.

Acquisition capabilities support small-cap platform development through systematic buy-and-build strategies. H.I.G.’s transaction experience, due diligence resources, and integration expertise enable portfolio companies to execute acquisitions enhancing scale, capabilities, or market coverage.

Investment Performance and Track Record

H.I.G.’s small-cap investments demonstrate the firm’s ability to identify opportunities, partner with management teams, and create value through operational improvements and growth initiatives. Portfolio companies benefit from capital infusions, operational support, and strategic guidance addressing specific development needs.

The firm’s exit activity across small-cap investments reflects value creation through operational improvements, market expansion, and strategic positioning enhancements. Successful outcomes validate H.I.G.’s investment approach and operational capabilities supporting smaller companies requiring hands-on involvement.

Harrison Davis’s addition strengthens H.I.G.’s small-cap capabilities through his transaction experience, sector knowledge, and operational expertise. His background addresses investment complexities characteristic of smaller companies while supporting team development and portfolio company assistance.

Strategic Priorities and Future Development

H.I.G.’s small-cap strategy continues emphasizing companies with defensible market positions, recurring revenue characteristics, and growth opportunities through operational improvements or acquisitions. The firm’s dedicated team, organizational resources, and operational expertise provide competitive advantages in markets where smaller companies require hands-on partnership and patient capital supporting development initiatives.

Current small-cap portfolio companies benefit from H.I.G.’s network, sector knowledge, and capital resources while maintaining operational independence and management continuity. The firm’s approach emphasizes partnership with entrepreneurs and management teams rather than replacing leadership or imposing rigid operational models.

Future small-cap investments likely will focus on sectors where H.I.G. has developed expertise through previous transactions and where market dynamics support attractive risk-adjusted returns. The firm’s track record demonstrates its ability to identify opportunities, execute transactions, and create value through operational involvement supporting sustainable growth and successful exits.