Alex Sloane & Matt Perelman – Buy-and-Build Playbook in the Core Economy at GSP

**Matt Perelman** (0:00)
Being small is scary in a roll up, and it's true because if you take any one of these consolidations that we're involved with, and you pick one of the underlying assets, there are fundamental micro market risks to that asset. Perhaps they have one customer that makes up 20% of the revenue, or if it's a business that's dependent on traffic patterns or whether you have the micro market risks of traffic patterns or whether, through scale and diversification of those revenue streams, those numbers on a percentage basis and on a overall risk basis start to come down. So that 25% customer in the scheme of large enterprise becomes 2%.
That weather event that could have swung your revenue double digits in Q4, now can only swing it by 80 basis points because it's blended into an overall consolidation.

**Ted Seides** (0:52)
I'm Ted Seides, and this is Capital Allocators.
My guests on today's show are Alex Sloane and Matt Perelman, co-founders of Garnett Station Partners, a $4 billion private equity firm focused on buy and build investments in founder-led core economy businesses. Alex and Matt are lifelong friends who took an unconventional path out of business school, acquiring a 23-unit Burger King franchise in North Carolina, but they scaled to 1,100 locations before selling it back to the franchisor. That operating experience became the foundation for their investment firm. Our conversation traces that evolution from operators to investors. We discussed their shared desk partnership and culture of debate, and the Garnett Station playbook from sourcing lighthouse businesses and moving quickly in fragmented markets to building diversified platforms through disciplined capital allocation. We also covered lessons from scaling through cycles, the role of speed and integration in buy and build strategies, and how they think about risk, exits and long-term value creation.
Before we get going, it's still travel season. Partner meetings and board meetings, the Capital Allocators CIO Summit, Berkshire and Milken.
Across planes, trains and automobiles, you're bound to run into a few snacks. When they're unavoidable, I try to remember Will Guadarro's story of the pilot who lifted everyone's spirits by bringing families into the cockpit. But it's not always easy, which leads to my most recent pet peeve, speed limits. When I travel to certain places, everyone religiously follows the speed limit. In Florida along A1A, if you go much over 35 miles per hour, there's a good chance you'll get a ticket. In Sun Valley, I once got stopped for rolling through a blinking red light at a whopping four miles per hour. Once I adjust, I find it relaxing to drive slowly. It reminds me of the Pixar movie Cars, when the old timers off Route 66 drove low and slow. However, when I'm in Connecticut or New York, I'm a totally different driver. I need to get places, and if I'm running late, I'll end up on a single-lane road for five miles behind someone driving annoyingly slow. That person is probably driving 35 miles per hour, the speed limit. But it's common knowledge in those parts that the flow of traffic is well above the speed limit, with maybe seven miles per hour over as the whisper number statue.
For the life of me, I can't reconcile the two. Either we should drive the speed limit or not, or maybe we need a lot more variability in what the safe speed limit should be. So my new pet peeve depends entirely on where I am. If I'm in Florida, get off my tail. I'm already going the speed limit. If I'm in the Northeast, you better hurry up if you're in front of me and you're only driving the speed limit. The only way I know to gain the benefit of such different perspectives is right here on Capital Allocators. Thanks so much for spreading the word.
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