How I Invest with David Weisburd
E285: The Lower Middle Market: Where Private Equity Still Generates Alpha
19 Jan 2026
Chapter 1: What inspired Jeff Schwartz to start Corbel Capital Partners?
So you launched Korbel in 2014 after years at Aries. What was the aha moment that convinced you to strike out on your own?
I'd always wanted to do something more entrepreneurial, and I'd gotten to a stage in my career where it was the appropriate time. But in terms of the investment opportunity or the aha moment where there was an opportunity here, I was speaking to a friend of mine who owned a small business, and we were comparing notes on what he did and what I did.
And he made the comment that it would really be interesting to have an investor like you on my cap table or on my board or involved with my company, but I would never sell to a private equity fund. So I thought about small businesses. I thought about the lower middle market.
Chapter 2: How does structured capital fill the gap for lower middle market businesses?
I knew that traditional banks had largely vacated the space and were lending much more selectively and much more conservatively to small businesses. I knew that private equity firms were certainly buying small businesses.
But there was really no one providing what we would call structured capital to small businesses where we could provide capital for an owner of a business to make an acquisition, to buy out a minority shareholder, to take a dividend and still benefit from private equity style sponsorship and support.
And I thought that void in the market created a real opportunity for me to raise a fund around that strategy and generate off-market risk-adjusted returns for my investors.
Obviously, when you were at Aries, you had a lot of infrastructure behind you and a lot of support. What did you underestimate in terms of what you would have to do in order to build your own franchise?
That's an interesting question. I'd always wanted to do something more entrepreneurial, as I mentioned. But after 15 plus years of primarily being an investor, the only type of business that I felt like I could run would be an investment firm.
So I thought that if I just rolled out an investment strategy and got a bunch of investors, I could spend my time primarily doing deals just the way I had done deals my entire career and probably underestimated, to your point, just how much work there was behind running a business. And our firm is now a business.
We manage over a billion dollars of capital and have 20 plus employees and offices and infrastructure. And that all requires management. And I probably spend as much time managing the firm as I do working on individual deals. I'm not sure I appreciated how time consuming that would be, but it's been really rewarding.
But there definitely is more work involved in running the firm than I think that regular way private equity professionals or regular investment bankers give credit to management for.
Using an analogy, you went from being a player to a coach or a manager of a team. What are some of the skills that you had to gain in order to become a great manager over the last 11, 12 years?
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Chapter 3: What challenges did Jeff face in building his own investment firm?
And he's my partner and our chief investment officer. So the two of us really together run the firm and sit on top of all of the investment strategies who have respective deal leads and deal teams. But one of the things that we've done at the firm that I think is unique is
and we're still able to do at our small size, is all of the investment professionals work across all of the different funds and all of the different strategies. They're all personally invested in those funds, and they're all promoted in those funds.
So that allows each individual to not only develop their skill set across different investment strategies, but also create opportunities for investors whatever would be the best deal for the Corbell franchise at any point in time without trying to shoehorn a transaction into a specific strategy because he or she may have a greater incentive personally to do that.
You can kind of align everybody around the success of the overall firm versus the individual funds. Exactly. It's somewhat of a paradox, but Recruiting for private equity firms, how do you get people excited about funding businesses in the lower middle market? And how do you get people to see past the dollars and cents of, you know, their salary and their carry and their economics?
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Recruiting and retention is definitely a challenge without the management fee base that some of the mega funds have. It's difficult to retain top talent and to recruit and retain top talent and compensate them appropriately. We try to create a more entrepreneurial experience in the long term, the ability to work across different products.
Private credit, private equity, and special situations helps young junior investors hone their skills and develop flexible investing capabilities. And we align their incentives. So even at a very junior level, all of our investment professionals receive, promote in all of the different funds.
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Chapter 4: How has Corbel Capital navigated fundraising in the lower middle market?
That's another competitive advantage. The advisors in this space don't go out to 100 different Private equity firms, the way an investment banker who's selling a healthy middle market widget company sends a teaser out to 100 private equity firms who they know could write an X check and close a deal without tremendous time pressure and consideration on the situation.
And they're truly trying to maximize value. Well, here the advisors need a solution that they can count on.
If you go back to 2014 before you started at Corbell as you were coming from Aries, what is one piece of advice you would have given yourself to either accelerate your success or help you avoid costly mistakes?
I think I mentioned it earlier in the context of fundraising. I think if I would have made a more concerted effort to market the story and the firm to longer term institutional investing partners, it would probably have made subsequent fundraising more less challenging than it's been. We didn't need to pay fees on placement agents early on, and we didn't need to offer fee discounts early on.
And the fundraising process was pretty painless and straightforward for us. And we thought that if we could get things done quickly and get back to investing, the results would speak for themselves and the investors would come. And that hasn't necessarily been the case. Even with strong performance, raising each successive fund comes with its challenges.
What would you like our listeners to know about you, about Corbell, or anything else you'd like to share?
Our firm has a very strong track record of investing in the loan market and creates a great risk-adjusted return investment opportunity for individuals across different asset classes, whether you have an interest in private credit, whether you have an interest in investing in private equity, or whether you have an interest in investing in special situations.
We have a vehicle for each of those areas, and we have a track record of investing in these markets for the last 12 years with real success.
Well, Jeff, thanks so much for jumping on the podcast and looking forward to sitting down in real life soon.
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