Independent Sponsor Series: A Conversation with Alexander Foshager and John Mensing of Monroe Street Partners (Part One)

To help businesses, investors, and deal professionals better understand the evolving independent sponsor landscape, Robert Connolly – a partner in LP’s Corporate Practice Group and leader of LP’s Independent Sponsor team – shares a series of conversations with independent sponsors, capital providers and other professionals.

Below is his conversation with Alexander Foshager and John Mensing at Monroe Street Partners (MSP), a Chicago-based investment firm that partners with family and founder-owned, lower-middle market businesses across the business services and industrial sectors. As co-founder and managing partner, Alex leads transaction execution, diligence, and value creation efforts on MSP’s portfolio companies. As a managing partner, John leads transaction execution and diligence efforts, relying on his 10+ years of experience leading investments in the lower-middle market.

In this first of a two-part Q&A, they share Monroe Street Partners’ background, investment approach, and differentiation factors. In part two, they discuss ways to maintain momentum, explain key attributes of targets, and offer advice for business owners and new independent sponsors.

The responses below have been edited slightly for brevity and clarity.

Please tell us a bit about Monroe Street Partners.

Alexander Foshager: Monroe Street Partners is an operationally focused investment firm dedicated to acquiring and scaling founder and family-owned businesses across the niche manufacturing, value-added distribution, and essential business services sectors. Since our founding in 2022, MSP has completed seven acquisitions – three platform investments and four add-ons – across our core industry verticals. Our typical investment profile includes businesses with $2–10 million of EBITDA, situations where we are the first outside capital involved with the company, and situations where we can partner directly with the company’s founders. That’s where our involvement can be most transformative.

At our core, we aim to bring three things to every business we partner with: capital, strategic collaboration, and hands-on operational resources. We typically invest in companies at key inflection points, where a founder or family has built something great, but recognizes the need for a trusted outside partner to help professionalize their business and take their company to the next level.

The central tenet of Monroe Street is simple but foundational – people are at the heart of everything we do. That belief manifests in two ways. First, we seek to partner with exceptional founders and management teams – leaders with vision and energy – who want a partner to help them scale and build something enduring. Second, we complement those teams with best-in-class operating partners and industry experts from our network. We’ve built a strong bench of outside industry experts who serve as trusted advisors to our portfolio companies and help drive our strategic initiatives throughout the investment lifecycle. This collaboration between hands-on capital, talented outside operators, and high-caliber founders is the formula that drives our value creation strategy.

Ultimately, our approach is grounded in partnership and a deep respect for the legacy of the businesses we acquire.

What inspired you to pursue the independent sponsor model?

Alexander Foshager: When Ken and I founded MSP, we had previously spent nearly a decade working closely together at Goldman Sachs. We both knew we ultimately wanted to become principal investors, but the real question was what path we wanted to take and where we felt we could be most impactful. We had opportunities to join more established private equity firms, but to us, that path didn’t feel entrepreneurial enough. We believed there was a more dynamic and hands-on way to build something of our own and partner with like-minded entrepreneurs.

We were fortunate to be highly aligned, not just in terms of our long-term goals, but also in our belief that there was a significant opportunity to invest in and work directly with businesses in the lower-middle market. We knew the lower-middle market benefitted from significant demographic tailwinds and was generally under-penetrated in terms of access to private, strategic and hands-on capital. This alignment is what led us to launch Monroe Street Partners.

A key part of our strategy was leveraging the network of experienced operators we had built during our time at Goldman. Many were former clients or executives in our network who were now exploring their next chapter, often in board or advisory roles. The thought process was relatively simple, why not bring the high-impact operating partner model used in up-market private equity to the lower-middle market?

We felt we had a unique edge. We possessed the network to bring in expert operators, the deal experience to identify quality businesses and execute, and the ability to raise capital from aligned partners. It was the convergence of these relative strengths that gave us the conviction to launch MSP.

John Mensing: I joined Monroe Street Partners nine months ago after spending over a decade investing in niche manufacturing, food and beverage, and service businesses through both single-family offices and traditional private equity investing platforms. Transitioning from a family office environment where capital was always readily available to a deal-by-deal capital raising model has been a refreshing way to approach investing with intentionality.

What drew me to MSP was Ken and Alex’s genuine vision for what a true partnership with founder and family-owned businesses should look like. In my prior roles, I had seen a wide range of partnership approaches, and it was clear to me that Ken and Alex not only talked about being founder-friendly but genuinely lived it. While many investors claim to put sellers first, MSP actually does, and that distinction was important to me.

The dynamic between the three of us – Ken, Alex, and myself – creates real momentum with our management teams and founders. We are hands-on partners with our portfolio companies and bring significant operational firepower to the table. In a short period, we have generated strong outcomes for our portfolio companies and investors, and I am excited about what lays ahead.

Is the independent sponsor model a stepping stone to a committed fund, or are you committed to the deal-by-deal model?

Alexander Foshager: We get this question often, and interestingly, we tend to talk about it more with others than we do internally. We are not actively focused on raising a fund right now. We have a deep appreciation for the deal-by-deal model. It gives us the flexibility to be thoughtful and intentional with every investment we pursue.

One of the biggest advantages of the independent sponsor model is the alignment it creates with sellers and owners. When we sit across the table from an owner, we can speak honestly about being long-term partners, because we truly are. MSP is not constrained by a traditional five-year fund cycle or pressured to return capital in a pre-determined window. That resonates deeply with the founder and family-owned businesses we work with. They know MSP is in it for the right reasons and on a timeline that makes sense for the business, not just MSP or our investors.

The second major benefit – which is perhaps even more important for us as investors – is the ability to always remain opportunistic. The current environment is filled with uncertainty and challenges that are especially acute in the lower-middle market: high valuation expectations, broader macroeconomic volatility, post-COVID normalization, and regulatory changes, to name a few. In the traditional fund model, pressure often exists to deploy capital quickly and in a regular cadence. As an independent sponsor, we can take a patient, disciplined approach and allocate capital only when the timing and opportunity are right. This level of flexibility allows us to focus exclusively on quality and, ultimately, to drive the best long-term outcomes for our investors and the companies we partner with.

John Mensing: To build on Alex’s point, we pride ourselves on being able to look sellers in the eye and tell them we are going to be their long-term partners. At its core, selling a business is an emotional decision. For many, it represents the culmination of their life’s work and is a moment of deep personal transition. MSP does not take lightly the trust they place in us, not only to be the stewards of their companies, but also to support the people they care most about. This includes family members involved in the business, their employees, suppliers, and customers.

Our flexible investment horizon means we can invest in ways that serve the long-term health and sustainability of the business without worrying whether a particular initiative or capital outlay will pay back in the short term.

How does Monroe Street Partners differentiate itself?

Alexander Foshager: The lower-middle market has matured significantly over the past decade, and we have seen that evolution firsthand since founding MSP in 2022. As the market has grown more competitive and sophisticated, we have spent a lot of time refining how we differentiate ourselves to sellers and our capital partners.

First, we maintain a strict focus on companies in the industrial and essential business services sectors, investing exclusively in businesses we deeply understand and where we know we can add meaningful value. Equally important is our close collaboration with a network of seasoned operating partners – industry veterans who have spent their careers building and leading companies in our target sectors. From the outset, these operators play a critical role in evaluating opportunities, refining our investment thesis, and working closely with our founders and management teams to build conviction and unlock long-term growth.

We don’t approach deals generically. Every opportunity starts with deep upfront work – partnering with our operators and management teams to define a clear thesis and plan to execute. That discipline informs how we source, underwrite, and scale our investments.

Additionally, our level of involvement post-close, and throughout the investment lifecycle, is another key differentiator. While we are not managing the day-to-day operations of the companies we acquire, we take a hands-on approach that goes well beyond what’s typical in up-market private equity. We see ourselves as utility players for our founders and management teams – we are actively involved in setting and executing on our value creation plan, add-on acquisition sourcing and deal execution, talent recruitment, and operational problem-solving. That level of partnership, and our ability to tailor our involvement based on a company’s specific needs, is something our founders and management teams consistently tell us they value.

John Mensing: Investing in small businesses requires a real willingness to get deeply involved in company operations and decision making. We are eager to roll up our sleeves and row alongside our management teams, employees, and everyone else involved in making a portfolio company successful.

What kind of deals do you look for?

John Mensing: We focus exclusively on the lower-middle market, targeting businesses in North America with a minimum of $2 million in EBITDA and $15–20 million in revenue. Our strategy is centered around investing in stable and well-performing companies – we steer clear of distressed or turnaround situations. We also concentrate almost entirely on opportunities where we are the first institutional capital involved with the company.

A core tenet of our investment philosophy is identifying what’s preventing a business from reaching its full potential. Often, it comes down to a lack of leadership bandwidth, growth capital, or add-on acquisition experience. Enhancing organizational strength has been central to our approach from day one. Rather than replacing existing teams, we partner closely with management – and often with sellers who stay involved – to add key talent and provide the capital and resources necessary to accelerate growth.

MSP is particularly drawn to businesses at inflection points – those looking for a true partner to help execute on transformative initiatives they otherwise couldn’t undertake alone. Whether it’s a strategic acquisition, expanding operational infrastructure, or scaling into new markets, these are the moments where our expertise, capital, and operating partner network can make a lasting impact. This high-touch, collaborative model is what sets MSP apart.

Alexander Foshager: While we certainly have size and industry parameters, our first filter starts with assessing the people behind the company and broader transaction dynamics. Most critically, we focus on whether there is a backable founder or CEO – someone we can stand behind with both capital and operational support – and whether the business is at a pivotal inflection point that calls for a true partner. Second, we determine whether we have adequate outside operating resources in our network that can bring industry and value creation expertise to the company.

A lot of the upfront work we do with our operating partners centers on answering these initial questions. MSP is rarely drawn to situations where the seller simply desires a full exit. There needs to be a clear and compelling reason for MSP to be involved with the company and a defined way in which we can help drive value. That reason could stem from our industry experience, our ability to provide necessary growth capital, our ability to help the company execute on an M&A strategy, or our alignment with a proven operating partner who can deliver real impact.

Ultimately, we look to identify the two or three key levers that will drive the business forward. If we have the playbook – and the ability to execute on it in partnership with management – then it is a situation that MSP is willing to pursue. 

Can you share any takeaways from recent successes?

Alexander Foshager: I attribute our early success to three key factors. First, it was a tremendous amount of hard work. While we had a solid network and supportive capital partners when we launched, we had to prove to our founders and investors that we were differentiated in a crowded field of lower-middle market sponsors. We really had to hustle to form this foundation, including establishing broker, banker and capital relationships, cultivating our executive partner network, and developing a repeatable framework to source high-quality investment opportunities.

Second, we were fortunate. Luck played a role in several of our early acquisitions – whether it was a broken process that came back around, or a smaller carve-out that others overlooked but where we saw a clear path to value. Our investment in American Roadway Logistics in 2024, for example, stemmed from a multi-year relationship we formed with the founding family and took almost two years to complete after our first introduction. Each deal had its own nuances, and timing and persistence played a critical role.

Third, and most importantly, our access to exceptional operating talent continues to be a real differentiator. From day one, MSP has maintained relationships with a deep bench of seasoned executives who possess differentiated domain expertise and were excited to help build great businesses. Their involvement helps us move quickly through diligence, develop conviction around investment theses, and build actionable strategies alongside our management teams. This outside operating muscle gives MSP a unique edge in the lower-middle market and has enabled us to build a repeatable value-creation playbook. It is a core part of how we evaluate opportunities, how we win deals, and ultimately, how we help our portfolio companies scale into enduring platforms.

Can you highlight what made an investment particularly compelling?

Alexander Foshager: All three of our platform investments have progressed well, and we feel fortunate about our momentum. One deal that stands out as a prototypical MSP investment is our second platform, BRANDITO, a Richmond-based promotional products distributor and one of the top 40 distributors in the United States. As part of that transaction, we partnered with BRANDITO’s founder and CEO, Michael Lovern, who had built a fantastic business since launching the company in 2006. Michael had taken BRANDITO from a small, local distributor to a regional player but had reached an inflection point and needed a capital partner to help take his business to the next level.

BRANDITO was compelling to MSP for three primary reasons. First was Michael himself. Michael is a talented and visionary operator who had built a terrific company with a strong culture and management team. It was apparent to us from the beginning that Michael was someone we felt comfortable backing.

Second, it was evident that Michael needed a partner to help scale, execute on growth initiatives, and pursue M&A. There was a clear and direct fit – MSP could immediately add value across several areas, and Michael welcomed that support.

Third, we entered the investment with a well-developed thesis and deep sector familiarity. During our time at Goldman, we spent meaningful time in the promotional products space, which provided us with a nuanced understanding of the industry’s dynamics and the significant whitespace opportunity that BRANDITO could take advantage of. Equally important, we had the right operating partner in our network to provide Michael and BRANDITO with outside industry expertise. As part of the transaction, we partnered with Mark Ziskind, a former industry executive with decades of experience in the promotional products space. Mark, who currently serves as BRANDITO’s executive chairman, possesses invaluable strategic insight and has played an integral role in BRANDITO’s success.

Since partnering with BRANDITO, we have made significant progress on our value creation plan. Within 60 days, we brought on a new CFO, relocated BRANDITO to a larger facility to expand capacity, and began building out a broader distribution footprint. Within six months, we completed our first add-on acquisition, a Cincinnati-based distributor, which gave us a meaningful presence in the Midwest. In June 2025, we completed our second add-on acquisition in New Jersey, expanding BRANDITO’s presence into the northeast. This is the roadmap we envisioned from day-one – backing a highly-capable CEO, executing on identified value-creation opportunities, and a providing the capital necessary to help grow the business, both organically and through acquisition.

For more information on Monroe Street Partners, visit their website. For more information on Alexander Foshager and John Mensing, view their bios.

Interested in participating in a future interview series? Please contact Robert Connolly at rconnolly@lplegal.com.

To read other articles in this series, please see here: Insights | LP (lplegal.com)