Looking Back at 2023

Winding road in the forest.

2023 was a volatile year for the private markets. We began the year with concerns over inflation, high interest rates and the corresponding economic impact. We also endured the rapid decline of Silicon Valley Bank and a regional banking crisis that further impacted a tightening credit environment. As such, the economic environment in 2023 caused many market participants to sit on the sidelines. Despite these dynamics, the economy and the stock market ended the year with momentum, providing many reasons for optimism as we head into 2024. We see moderating inflation, a resilient labor market, an encouraging stock market, and stabilizing interest rates as fuel for a more active and prosperous M&A market in the coming year.   

As for Baird Capital, we weathered the challenges of 2023 and view our portfolio as well-positioned to capitalize on improving market conditions. Our team has managed through multiple investment cycles, and our collective experiences position us to capitalize on the current environment. Our decisions over the past cycle to focus on economically resilient business models while applying conservative capital structures continue to serve us well. The goal for 2024 is to deliver liquidity back to our investors while continuing to deploy capital into attractive companies looking for a value-added global partner. 

Our Venture and Global Private Equity teams made progress on many fronts this past year. I wanted to highlight a few of my favorite moments and milestones from 2023:  

Venture Fund 

  • In December, the Venture team announced the final close of its sixth U.S. Venture Capital fund with a total of $218 million in committed capital, its largest venture fund to date and our first fund focused solely on tech service businesses. A great accomplishment in a challenging fundraising environment. 
  • In 2023, the Venture team completed two new investments and 13 follow-on investments. Our new investments included: 
    • In June, we led a Series B funding round in Edina, Minn.-based Parallax, a leading provider of predictive forecasting and capacity planning software for digital services and organizations. Parallax’s leadership team has extensive industry knowledge and credibility from building a prior software design and development consultancy. 
    • In August, we led a Series B funding round in Austin, Texas-based Osano, a leader in data privacy management software. Osano’s cookie/consent management software is a critical component in the data privacy compliance suite.
      • In December, we also supported Osano’s acquisition of WireWheel, an enterprise provider of data privacy solutions. 
  • The team also welcomed Summer Powers to the platform as an Associate. Prior to Baird Capital, Summer worked as a valuation and diligence Analyst at OpenStore, a Series-B eCommerce startup, and as an investment analyst in the Micro-Cap Fund at The Riverside Company.  

 

Global Fund

  • During the year, our Global Private Equity team made two new investments and completed two exits: 
    • In June, we completed an investment in JMAN, a global data consultancy headquartered in London and Chennai, India. Its founders were looking for a global partner to help them launch their US operations and accelerate growth outside its core UK market. 
    • Also in June, we completed an investment in Freemarket, a leading fintech platform for regulated B2B cross-border payments and currency exchange headquartered in London. Its founders were looking for a global partner to help them scale their operations and support their expansion into other geographic markets.
    • In May, we sold bfinance, a financial services firm that provides strategy development and investment implementation for institutional investors around the globe.  Baird Capital invested in bfinance in 2016 and doubled revenues during our investment period by diversifying the firm’s client base and opening a US office in Chicago. 
    • In August, we sold CAV Systems, a leading provider of in-flight ice protection and drag reduction technology to the general aviation, commercial aerospace and defense markets worldwide. Baird Capital invested in CAV in 2017 and supported the company with commercial and operational improvements, laying the foundation for growth and profit enhancement. 

 

Our Organization

  • After nearly twenty years at Baird, Scott Skie, Chief Operating Officer of Baird Capital, is retiring on February 2, 2024. We cannot thank Scott enough for his efforts and all that he’s brought to our firm over the years. As part of this transition, I am pleased to share that Erin Jelenchick, Baird Finance, will join the Baird Capital team as Global Head of Finance. Katie Schoen will take on additional responsibilities as Global Head of Investor Relations and Operations. This co-leadership approach allows us to continue to support our organization and positions us well for our next stage of growth.  
  • Katie Schoen was named one of the “10 People to Know in Banking & Finance” by the Milwaukee Business Journal. The list recognizes southeast Wisconsin executives who are climbing the ladder and making a difference within the industry and in their communities.  
  • The Baird Capital team participated in #BairdGivesBack at Misericordia, a community of care that maximizes potential for persons with mild to profound developmental disabilities. It was a beautiful day and there’s nothing like rolling up your sleeves and doing hands-on volunteer work with such an incredible organization. 
  • We also launched a new website and two videos last year: one on our Venture Capital Team and one on our Global Private Equity team. These resources provide an in-depth view into how our platform operates and what makes our team so special, so check them out.   

 

We appreciate your continued trust and partnership in this dynamic and ever-changing environmentWe have a strong, diverse and experienced team that is actively managing our funds through these challenging, yet exciting times. Our team is excited about the prospects for 2024 and unlocking the potential for our investors. 

Warm Regards,

Gordon Pan Signature
Gordon Pan
President, Baird Capital
GPan@bairdcapital.com
Connect with me on LinkedIn or reach out via email - I'd love to hear from you.

  • Baird visited the University of Alaska Anchorage last year, where an exciting partnership is forming.
    Katie, Gordon and others from Baird visited the University of Alaska Anchorage last year, where an exciting partnership is forming. More to come.
  • Baird Capital team members enjoyed conversation during a wine tasting experience in Kohler, Wis. this past summer.
    Team members enjoyed conversation during a wine tasting experience in Kohler, Wis. this past summer.
  • Baird Capital Chicago-based teammates participated in Baird Gives Back at Misericordia.
    Chicago-based teammates participated in Baird Gives Back at Misericordia.
  • Baird Capital came together in November to celebrate the impending retirement of Scott Skie.
    Baird Capital came together in November to celebrate the impending retirement of Scott Skie, Chief Operating Officer.
  • Blue Matter CEO Ashwin Dandekar joined Michael Holgate, Partner, onstage at the 2023 Annual Investor Meeting.
    Blue Matter CEO Ashwin Dandekar joined Michael Holgate, Partner, onstage at the 2023 Annual Investor Meeting.
  • Baird Capital 2023 holiday dinner
    The 2023 holiday dinner allowed team members and their spouses/partners to come together to celebrate an incredible year of accomplishments.