Samuel Hom

Most private equity firms hire operators post-acquisition and give them "equity." But it's usually not real equity. It's phantom equity, options with impossible vesting schedules, or profits interests that only pay out if the fund hits a certain IRR. The economic reality is that the operator is an employee with upside optionality, not an owner. That misalignment creates problems. When the operator doesn't have meaningful skin in the game, their incentives diverge from investors. They optimize for salary and bonus, not long-term value creation. And when the business hits challenges, they're more likely to leave than fight through it. Our model is different. The operator receives a percentage carry at close. Day one, before the business generates a dollar of profit. That's real ownership. If the business delivers a set net IRR, the operator earns an additional carry. At the top end, they own a healthy percentage of the total upside. This isn't a "nice job" bonus. It's generational wealth creation tied directly to investor returns. That alignment changes everything about how operators run the business. They're not thinking about their next job. They're thinking about how to drive EBITDA growth, improve margins, and position the company for a premium exit. When investors win, operators win in actual dollars that hit their bank account. Most PE firms talk about alignment. We've structured it into the cap table and waterfall mechanics in a way that makes it impossible to misalign. ✍️ If you are an accredited investor and actively investing in the lower-middle market... Every week, I breakdown what's actually happening in operator-led buyouts and lower-middle-market M&A. Subscribe to "Operator-Led" (link on my profile).

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Following a recent antitrust settlement, Constellation will now be the biggest wholesale power provider in the U.S., owning 55 GW of capacity. ⚡️ The antitrust complaint was filed by the U.S. Department of Justice and the state of Texas, who claimed that Constellation’s $26.6 billion acquisition of Calpine would reduce competition and lead to inflated market prices. Estimates show that costs could have risen by over $100 million annually in both ERCOT and PJM. 💵 When the deal was first approved back in July, FERC had originally required Constellation to sell four PJM-based power plants with a combined capacity of 3,550 MW. In total, the DOJ/Texas settlement now requires Constellation to sell six power plants and a minority stake in a seventh. Additional plants include: 1️⃣ Calpine’s 828-MW York 2 Energy Center, a dual-fuel plant in Delta, Pa. 2️⃣ Calpine’s 609-MW Jack A. Fusco Energy Center, a gas-fired power plant near Houston 3️⃣ Calpine’s 19-MW minority stake in the Gregory power plant, a gas-fired power plant near Corpus Christi, Texas This is the first settlement consent decree filed by the DOJ’s antitrust division pertaining to the electricity industry in roughly 14 years. What do you think of this acquisition? Share your thoughts below. Link to the full article in the comments ⬇️ Source: Utility Dive 12/8/2025 Disclaimer: Nothing in this post constitutes investment advice. #electricity #powerdemand #powergrid #energy

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