Smaller operations are looking better.
With ample capital in hand and less-risky ventures looking for stratospheric multiples, some PE firms are broadening their investment parameters to include smaller concepts. “As the environment becomes more challenging, where they might not have gone down to a four- or two-unit chain in the past, now they’re taking a look,” says Jim Balis, CEO of Norms Restaurants and a partner in the CapitalSpring PE firm. A case in point: L Catterton’s investment in five-unit Velvet Taco.