Lower middle market firm Cloverlay Partners Management Co. LLC made headlines this summer with the exit of its investment in family entertainment franchise Care Bears, along with co-investor Ivest Consumer Partners LLC.

Cloverlay managing partner Jeff Collins joined Behind the Buyouts to discuss the firm’s strategy of investing in uncorrelated private assets from Care Bears to Chinook helicopters deployed to fight fires.

“When you pull back, this is not a consumer business,” Collins said of the Care Bears. “This is an intellectual property asset-focused business. where you can actually grow your revenue stream.”

The portfolio ranges from Firebird Music, a company run by the prior CEO of Ticketmaster Entertainment Inc. and the former head of special situations at KKR & Co. (KKR) that develops royalty streams for musical artists beyond their catalog, and international Broadway touring rights to wireless spectrum licenses.

“We turn over a lot of rocks,” Collins said of the search for second- or third-order derivative opportunities.

“There are a lot of very, very interesting $50 million assets that just fall off the table,” Collins said.

Listen to the podcast with Jeff Collins below:

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