Three Decades of Middle-Market Investing From an Unexpected Hub

When private equity firms establish headquarters, they typically choose Manhattan, Boston, San Francisco or London. Sami Mnaymneh picked Miami. The unconventional choice in 1993 reflected both personal preference and practical considerations. Three decades later, HIG Capital manages $70 billion from that Florida base.

Mnaymneh serves as founder, executive chairman and CEO of the firm he launched with Tony Tamer. HIG Capital now operates 19 offices worldwide, employs over 1,000 people and has invested in more than 400 companies. The firm’s current portfolio exceeds 100 businesses with combined revenues above $53 billion.

The journey from startup to industry heavyweight involved identifying market inefficiencies, building operational capabilities and expanding into multiple strategies while maintaining focus on middle-market opportunities.

Wall Street Origins

Mnaymneh began his finance career at Morgan Stanley’s New York offices after completing graduate degrees at Harvard University. He earned both a J.D. from Harvard Law School and an M.B.A. from Harvard Business School with honors, following undergraduate studies at Columbia University where he graduated first in his class with a B.A. summa cum laude.

The dual legal and business training proved foundational for private equity. Transactions involve complex corporate law, securities regulations and contractual arrangements requiring both financial and legal expertise. Many practitioners hold either business degrees or law degrees. Fewer possess both.

Following Morgan Stanley, Mnaymneh joined The Blackstone Group as a managing director. Working at Blackstone in the early 1990s meant participating in one of private equity’s pioneering platforms as the industry was still developing modern practices and structures.

The Blackstone experience exposed Mnaymneh to sophisticated deal sourcing, rigorous due diligence, complex transaction execution and systematic portfolio company value creation. However, Blackstone focused primarily on large transactions. Middle-market companies received limited attention despite representing thousands of businesses needing capital solutions.

Market Opportunity

Mnaymneh and Tamer identified a gap in 1993. Companies with enterprise values between $50 million and $500 million struggled to find appropriate capital partners. Mega-funds focused on billion-dollar deals found middle-market transactions too small to move the needle. Local investors and family offices lacked the sophistication and resources middle-market companies needed.

This disconnect created opportunity. Less competition should allow better entry valuations. Middle-market companies often had greater operational improvement potential than mature, well-managed larger corporations. The sheer number of middle-market companies provided abundant deal flow if properly sourced.

However, middle-market investing required different capabilities than large-cap transactions. Smaller companies typically lacked sophisticated management teams, robust financial systems and operational best practices. Simply providing capital wouldn’t create value. Firms needed expertise to work directly on business operations.

HIG Capital built an investment team combining financial skills with operating experience. Many hires came from consulting backgrounds or previous operating roles rather than pure finance pedigrees. This decision reflected Mnaymneh’s belief that middle-market success required understanding business fundamentals alongside financial engineering.

Strategy Expansion

HIG Capital began as a traditional leveraged buyout fund but expanded over time into seven distinct strategies. The platform now includes private equity, growth equity, direct lending, real estate, infrastructure, special situations debt and growth-stage healthcare.

Each strategy addresses different opportunities within the middle market. Growth equity targets businesses not ready for buyouts but needing capital to scale. Direct lending provides flexible debt solutions. Real estate focuses on value-add properties requiring repositioning. Infrastructure investments target essential service providers with stable cash flows.

The diversified approach creates multiple benefits. HIG Capital can provide various forms of capital to companies at different development stages. Portfolio companies might receive growth equity initially, later refinance with HIG Capital debt, then pursue management buyouts backed by the private equity funds.

Multiple strategies also generate steadier cash flows to limited partners than relying solely on buyout exits. Debt funds produce regular income. Real estate and infrastructure generate periodic distributions. Buyout funds return capital through exits concentrated in later fund years. The combination smooths distributions over time.

Lending Platform Growth

WhiteHorse, HIG Capital’s direct lending arm, has become one of the firm’s largest strategies. The platform launched to provide middle-market companies with flexible debt capital as banks retreated from lending following the 2008 financial crisis.

WhiteHorse has invested approximately $18 billion in 285 companies since inception. The platform closed its fourth fund at $5.9 billion in August 2025, one of the year’s largest middle-market lending funds. Fund IV continues targeting senior secured loans to both sponsor-backed and non-sponsor borrowers with EBITDA between $30 million and $100 million.

Direct lending has grown increasingly attractive as interest rates have risen. Senior secured floating rate loans now offer compelling returns while sitting atop capital structures, providing downside protection through collateral. The strategy appeals to institutional investors seeking current income with lower volatility than equity investments.

WhiteHorse competes with banks, business development companies and other direct lenders. Differentiation comes through flexible terms, execution speed and relationships developed through HIG Capital’s broader platform. Companies already working with HIG Capital strategies provide natural deal flow for the lending business.

Decision-Making Structure

Mnaymneh maintains personal approval authority over all capital commitments HIG Capital makes. This centralized control is unusual for a firm managing $70 billion. Most private equity platforms delegate investment decisions to fund managers or investment committees at substantial scale.

The approval requirement means Mnaymneh reviews transactions across seven strategies, 19 offices and multiple geographies. Each requires understanding industry dynamics, assessing management quality, evaluating competitive positioning and determining appropriate capital structures.

Centralized decision-making creates both advantages and constraints. It ensures consistency in investment criteria and risk management across the platform. Individual teams cannot pursue transactions that don’t align with firm-wide standards. The process forces disciplined due diligence and strategic thinking.

However, the structure also creates potential bottlenecks. Investment professionals must coordinate with Mnaymneh’s schedule to present opportunities. Deals requiring rapid decisions may face delays. Competitors with distributed authority can sometimes move faster on time-sensitive transactions.

Mnaymneh apparently believes the benefits justify the costs. Three decades of managing investments through this structure suggests the centralized approach has worked despite the firm’s growth.

Secondaries Entry

HIG Capital recently announced plans to raise $1.5 billion for a vehicle focused on GP-led continuation funds. The move enters the growing secondaries market where the firm previously had limited presence.

The strategy involves investing in continuation vehicles other private equity firms create to extend ownership of high-performing assets. Sponsors move valuable portfolio companies from existing funds into new continuation vehicles, allowing them to retain ownership beyond typical holding periods while providing liquidity to original limited partners.

Continuation funds have grown popular as traditional exit markets have slowed. Elevated interest rates have curtailed both IPO activity and strategic acquisitions. Continuation vehicles provide alternative liquidity mechanisms. Jefferies data shows continuation funds represented 19% of private equity exits in the first half of 2025, up from 13% for all of 2024.

To build this capability, HIG Capital recruited four executives from Morgan Stanley’s private equity secondaries team. Managing Director Dan Wieder leads the group, joined by Managing Director Yash Gupta and Principals Austin Gerber and Joe Holleran. The team brings decades of combined experience to the new platform.

HIG Capital plans to invest at least $50 million in approximately 20 single-asset continuation vehicles. The firm will focus on middle-market companies across sectors including business services, industrials, healthcare and consumer businesses.

Global Footprint

HIG Capital operates affiliate offices across multiple continents. European locations include Hamburg, London, Luxembourg, Madrid, Milan and Paris. Latin American offices span Bogotá, Rio de Janeiro and São Paulo. Additional offices in Dubai and Hong Kong extend reach into the Middle East and Asia.

This geographic diversification provides access to deal flow beyond U.S. markets. European middle-market private equity faces somewhat less competition than U.S. markets, potentially offering better entry valuations and more attractive risk-adjusted returns.

Recent European activity demonstrates the platform’s global reach. Transactions in 2025 included investments across Finland, Spain, Germany, France and Italy, spanning sectors from waste management to occupational health services to aerospace logistics.

International expansion required building local teams rather than managing remotely. European deals involve different legal systems, tax structures, labor regulations and banking relationships than U.S. transactions. Cultural differences affect management practices and negotiation dynamics. HIG Capital invested in developing regional expertise in each market.

Performance Indicators

Private equity firms rarely disclose detailed performance metrics. However, certain indicators suggest HIG Capital has delivered competitive returns. The firm successfully raised successively larger funds over three decades. Institutional investors allocate capital based on track records, not marketing pitches. Continued investor support indicates returns met or exceeded expectations.

The ability to attract $5.9 billion for a single lending fund demonstrates institutional confidence. Pension funds, endowments, insurance companies and other sophisticated investors conduct extensive due diligence before committing capital. Large allocations reflect conviction in both strategy and execution capability.

HIG Capital’s current portfolio scale provides another indicator. Managing over 100 active investments with combined revenues exceeding $53 billion requires consistent deal flow and successful portfolio construction. The firm must generate sufficient exits to return capital while maintaining steady deployment.

Mnaymneh’s personal wealth reflects three decades of earning management fees and carried interest, though specific figures remain private. Private equity compensation structures typically provide base salary, annual bonuses and carried interest on profitable investments. Carried interest represents the general partner’s share of profits, usually 20% after returning capital and preferred returns to limited partners.

Leadership Continuity

Mnaymneh and co-founder Tony Tamer remain actively involved more than 30 years after launching HIG Capital. This longevity distinguishes them from many private equity founders who step back earlier.

The firm has developed senior management capable of running complex operations. Managing directors lead regional offices and strategy-specific funds with substantial autonomy, though Mnaymneh retains ultimate approval authority. This structure balances operational independence with centralized oversight.

HIG Capital has not publicly addressed succession timing or transition plans. However, the depth of leadership talent suggests preparation for eventual change. Whether transition occurs gradually through delegation or more abruptly remains unclear.

Succession planning challenges many private equity firms. Founders often stamp firms with distinctive cultures and investment approaches that can prove difficult to maintain through leadership changes. Some founders remain engaged too long, preventing next-generation leaders from developing. Others exit too quickly, creating instability.

Market Challenges

The private equity industry confronts headwinds entering 2026. Interest rates remain elevated compared to the 2010s, increasing borrowing costs and reducing leverage multiples. Exit markets have slowed as both strategic buyers and public markets show restraint.

These conditions create performance pressure. Private equity historically relied on multiple expansion and financial leverage to amplify returns. With purchase price multiples near historical peaks and debt more expensive, operational improvements must contribute more to value creation.

The middle market where HIG Capital operates may face somewhat less pressure than large-cap transactions. Smaller companies have limited access to public capital markets regardless of economic conditions, creating consistent demand for private capital. Competition for deals remains intense but perhaps less extreme than mega-deals attracting numerous large funds.

Mnaymneh and his team have managed through multiple downturns. The firm navigated the dot-com bust, the 2008 financial crisis and the COVID-19 pandemic while continuing to raise capital and complete transactions. This experience provides institutional knowledge that newer firms lack.

Recent Transactions

HIG Capital’s transaction activity in 2025 demonstrates the breadth of opportunities the firm pursues. Investments have spanned destination management companies, cloud technology providers, revenue cycle management services, home warranty businesses and cruise excursion operators.

The firm has also completed several exits. Portfolio companies sold included Soleo Health to Court Square Capital and WindRose Health Investors, SoldierPoint Digital Health to GovCIO and United Flow Technologies to Berkshire Partners. These exits return capital to limited partners and generate carried interest for HIG Capital’s partners.

Exit timing depends partly on market conditions and partly on portfolio company development. Extended holding periods have become common as traditional exit markets have slowed. Funds that historically exited companies within five years now hold assets seven years or longer in many cases.

Academic Connections

Mnaymneh has maintained involvement with educational institutions throughout his career. He has served on the Board of Columbia College and the Dean’s Council of Harvard Law School.

These advisory roles involve meeting with university leadership, providing curriculum input and helping institutions adapt to business environment changes. Board members typically contribute financial support alongside their time and expertise.

Academic involvement serves multiple purposes for executives. It maintains connections to alma maters, supports educational missions and provides recruitment opportunities. Many private equity firms draw heavily from specific universities where partners maintain relationships.

The pattern reflects both philanthropic motivations and practical considerations. Supporting institutions that provided foundational education represents an obligation many successful executives feel. Simultaneously, university connections facilitate talent identification and recruitment.

Looking Forward

As HIG Capital approaches its 35th anniversary, Mnaymneh continues pursuing growth opportunities. The secondaries initiative, ongoing European expansion and fundraising across multiple strategies indicate sustained ambitions.

Whether a $70 billion platform can continue growing depends on execution and market conditions. Larger firms face challenges deploying capital efficiently while maintaining return standards. Some private equity firms have struggled after growing too large to execute their original strategies effectively.

HIG Capital’s multi-strategy approach provides flexibility but requires coordinating complex operations. Managing seven investment strategies across 19 offices demands sophisticated systems and communication. The personal approval requirement Mnaymneh maintains may become increasingly difficult to sustain as transaction volumes grow.

Three decades of results suggest Mnaymneh has built a durable institution. The firm survived multiple market cycles, closed substantial funds across strategies and maintained investor confidence through changing conditions.

The executive who identified middle-market opportunities three decades ago, built a platform from Miami rather than Manhattan and maintained operational involvement throughout continues leading one of the industry’s most active firms. How much longer that continues remains to be determined.