Mathes: Private equity increasingly focused on durable growth

NEW YORK—As private equity (PE) continues to play a major role across the security industry, attendees at Securing New Ground 2026 will gain insight into how investors are evaluating businesses and identifying future growth opportunities.

During the conference session, "Private Equity Strategies," Mike Mathes, executive vice president at Convergint and chair of the Security Industry Association's (SIA’s) board of directors, will join Justin Anderson, principal at Ares Private Equity Group, for a discussion on the forces shaping investment decisions in the security market.

Looking beyond PE stereotypes

Mathes said understanding private equity has become increasingly important because investors now influence virtually every part of the security ecosystem.

"Whether you're a manufacturer, software provider, integrator or business owner, investors can influence consolidation, innovation, leadership priorities and where capital gets deployed," he said.

One of his goals for the session is to move beyond common assumptions about private equity and help attendees understand "how sophisticated investors actually evaluate our industry and think about creating long-term value."

What attracts investors

According to Mathes, security remains attractive because it is "mission-critical," the market is "large and fragmented," and customer relationships tend to be durable.

He also pointed to recurring revenue opportunities and long-term demand drivers, noting that organizations "aren't becoming less concerned about protecting their people, assets and operations."

However, investor expectations have evolved.

"Growth still matters, but investors are increasingly focused on the quality and durability of that growth," Mathes said. He identified recurring and service revenue, customer retention, margins, cash generation, management depth and scalability as key factors investors evaluate today.

Creating enterprise value

Mathes also addressed the role of emerging technologies such as artificial intelligence (AI). "I think the more interesting question is whether a technology creates a durable competitive advantage or simply gives a company a temporary story to tell," he said.

For security business owners considering a future transaction, Mathes offered straightforward advice. "I'd encourage owners to think less about maximizing a transaction multiple and more about building the kind of business that deserves a premium multiple," he said.

He added that one of the biggest misconceptions about private equity is that it is driven primarily by financial engineering and cost-cutting.

Instead, he said, "sustainable returns today are much more dependent on actually creating enterprise value: growing the business, improving its competitive position, developing leadership and building something better than what you started with."

The session will take place on Wednesday, Oct. 21, from 8:15-8:45 a.m.