M2O took a hands-on approach to its first investment, directly managing the National Lines Bureau for five years. During that period, the company’s operations were improved and streamlined, generating a 100% return on invested capital annually by the time of its sale in 1997.
M2O invested in its first search fund in 1992, the same year it was founded. At the time, a search fund was a novel and ambitious concept hatched by a small group of business school professors, students, and private investors. Over time, search funds became the foundation of M2O’s investment activities. We have invested in over 130 search funds around the world and now evaluate dozens of new search fund investments annually.
Our experiences with National Lines Bureau and search funds led to additional investments in small, high-growth private companies. Unlike traditional private equity or venture capital groups, our investment horizon is often 10 years or more. Consequently, we develop lasting relationships with the companies—and managers—in which we invest.
We invest solely from our own balance sheet. We have no limited partners and minimal demands on our capital, outside of investing. As a result, the firm looks for long-term investment opportunities.
M2O has the flexibility to invest in private companies through a range of structures, whether backing search fund entrepreneurs, co-investing with other investment managers, or leading direct investments.
M2O appreciates that great companies are run by talented, hard-working managers. The first step in diligence is better understanding the motivation and capability of the management team and/or sponsor.
We seek investments in companies with recurring revenues, predictable cash flows, and sustainable competitive positions in growing industries. We invest primarily in service-based businesses, especially those with modest capital intensity.
While M2O has the flexibility to invest in a broad range of situations, most companies have $5 to $50 million of revenue and $1 to $15 million of EBITDA when M2O first invests.
With over 25 years of experience, M2O quickly recognizes high-potential investments. We pride ourselves on accelerated due diligence of investment opportunities. We aim to respond to private placement memoranda quickly and, under most circumstances, will make a decision within one week. When the firm commits to a deal, funds are available immediately.
Experienced across the lifecycle of businesses, M2O can be a primary source of capital as companies launch, grow, and mature. Consistent with our investment horizon, we view our engagement with management through the lens of a long-term relationship. Indeed, M2O builds lasting partnerships with executives that span multiple companies and industries.
Since M2O partners with hardworking, motivated managers, we let the executive determine the best means of engagement. M2O strives to be responsive, not over-bearing.
M2O believes in the traditional approach to search fund investing, including a diverse investor group where the entrepreneur has the opportunity to become the single largest shareholder. We believe entrepreneurs benefit from distilling the perspectives of many voices, thus making more informed decisions.
M2O partners with entrepreneurs interested in building long-term, sustainable value. We back individuals and teams that demonstrate the grit, determination and hard work required to be successful. We pitch in to help at whatever stage in the search cycle an entrepreneur requires.
M2O maintains a concentrated portfolio of startup investments. The firm’s approach to venture investing differs from industry norms in that M2O prioritizes sustainable growth and capital efficiency over maximizing short-term growth (often at a high cost). We find our approach enables us to cultivate ideas from inception to commercial success (or failure, but we prefer the former).
M2O partners with independent sponsors and other long-term investors to acquire and manage privately held companies. We prefer investments in companies with sustainable competitive advantages and long-term growth potential that we can hold indefinitely. We also seek to build long-term relationships with the sponsors and managers we back.
M2O’s ability to make quick decisions allows us to act on time-sensitive opportunities. Moreover, with a strong balance sheet and flexible approach, we can tailor investments to the needs of the business. Whether building a 450-bed student housing complex in Utah or reorganizing a holding company with diverse lines of business, M2O works with managers to understand the value-maximizing strategy.
Michael F. O’Connell is Managing Partner and President of M2O. He oversees the assessment of investment opportunities and reviews the ongoing performance of portfolio companies. For most of his career, Michael was President and Managing Director of Anhalt, O’Connell & Steffanci Inc., a Los Angeles-based investment management firm with almost $1 billion under management.
In 1992, Michael purchased the National Lines Bureau, a ship mooring company operating at the Los Angeles and Long Beach harbors, the largest commercial port in America. This direct investment prompted many more and Michael soon shifted his focus from investment management to private equity and venture capital. Today, he leads M2O with a portfolio of more than 60 companies and sits on the boards of Veri-Tax, TruMed and Xiltrix.
Michael holds a B.A., with high honors, from Harvard College and an MBA from Harvard Business School.
Michael-Kevin (M-K) O’Connell joined M2O in 2009. He is responsible for sourcing and reviewing new investment opportunities as well as monitoring the performance of portfolio companies. M-K currently serves on the board of four search fund companies (Apex, Origo Commodities Management, ListEngage, and Veri-Tax) and two venture businesses (Camio and Recurve). M-K also promotes the traditional partnership approach to search fund investing through his work on the board of the Search Fund Alliance.
Prior to joining M2O, M-K was a Manager with L.E.K. Consulting. During his tenure there, M-K led project teams across a diverse range of industries and business issues. Before L.E.K., M-K helped develop an industry-leading CRM and data management solution for commercial real estate as the Director of Research for CB Richard Ellis in New England.
M-K received his B.S, magna cum laude, from Boston College and his MBA from The Wharton School at the University of Pennsylvania where he was the recipient of the Thomas P. Gerrity Leadership Award.
Shaun Rader joined M2O in 2019. He sources and executes new investments and collaborates with portfolio company management teams. Shaun serves on the boards of three search fund companies (Helpside, P&S Machining, and Swoogo).
Prior to joining M2O, Shaun was a Managing Director at Sagard, an alternative asset management division of Power Corporation of Canada. At Sagard, Shaun screened, researched, and managed investments totaling $250 million of invested capital across 12 companies, primarily in the business services sector. In between stints at Sagard, Shaun served as a Partner in a related family office where he led an investment in a national network of veterinary practices and spent two years as CFO and board member of the company, now branded Lakefield Veterinary. Shaun started his career at Bain & Company where he advised private equity and corporate clients on investment decisions and growth strategy.
Shaun earned a B.A. with distinction from the University of Virginia and an MBA from The Wharton School at the University of Pennsylvania where he was a Palmer Scholar.
Nicholas (Nick) Qiu joined M2O in 2022. He works closely with search fund entrepreneurs throughout their search, acquisition, and operating phases.
Prior to joining M2O, Nick was a consultant at Bain & Company where he advised private equity and corporate clients on investment decisions, due diligence, and growth strategy. Nick started his career as an Army officer.
Nick received a B.S. from the United States Military Academy at West Point and an MBA from Harvard Business School.
Sarah Zepkowski serves as the Controller of M2O, Inc. and has been with the company since 2012. In her current position, Sarah is responsible for overseeing the accounting and financial operations of the firm. Her role includes the management of accounting systems, budget and financial statement development, internal and external reporting, as well as tax and regulatory compliance.
Prior to joining M2O, Inc., Sarah was the Communications Director of JNCIMC, a full service marketing and media production company.
A graduate of the University of California, Los Angeles, Sarah holds a B.A. in English Literature with honors and is a licensed C.P.A. in the state of California.
Rebecca Krause joined M2O in 2019. She is responsible for ensuring the efficiency of daily operations, supporting the executive team in all administrative matters, and assisting the company’s business development efforts.
Rebecca brings over 10 years of managerial and administrative experience in the financial services industry. She most recently served as Commercial Client Officer at City National Bank where she supported a team of Senior Relationship Managers with a large portfolio of commercial clients.
Additionally, Rebecca has served as a Court Appointed Special Advocate volunteer for children in LA County and is licensed to provide notarial services in the State of California.