Main Line’s Operations Team of One

The firm has its first operating partner in Doug Hart, who plans to make operational improvements through the life of its investment in a portfolio company.

Main Line Equity Partners ran its private equity firm for years without operating partners. But the Ardmore, Pennsylvania–based firm has changed course, adding Doug Hart to its investment team as its first dedicated operating partner. Hart is expected to play an integral role managing the growth of Main Line’s investment portfolio.

The fundless private equity firm focuses on investing in profitable next-stage growth companies with less than $10M in revenue. Main Line looks to be actively engaged with its portfolio companies throughout the investment life cycle, hence the need for a dedicated operating partner.

Hart expects to help Main Line by providing operational guidance from the due-diligence phase all the way through the life of an investment. “With portfolio companies, I often find they lack simple leadership experience, or they don’t have the experience necessary to improve their operational practices and, as such, their bottom line,” says Hart, who recently helped a Midwestern company improve its production output significantly. For every 100 yards of product the company was producing, on average 15 percent of it was scrap or yield loss. Hart created a production-yield tracking system that allowed the employees to focus on the value of what was wasted and its impact on the bottom line.

Given that the company was located near the Indianapolis Motor Speedway, where the Indianapolis 500 takes place, Hart put it terms that the employees could relate to, explaining that the 15 percent waste the company was producing could fill the speedway’s track 80 times.

“All of a sudden they understood the magnitude of the loss and wanted to make the changes,” says Hart. “We were able to improve production yield by 8 percent, which is considered world-class for the industry. It took about a year to implement, and the savings directly impacted the bottom line and the value of the business.”

Hart brings more than 25 years of experience to Main Line as an owner, operator, and adviser of small-to-midmarket businesses across a wide variety of manufacturing and consumer-product industries.

Hart says more private equity firms are starting to understand the value of the operating partner. “You will see some private equity firms that will rely on external consultants, but more frequently private equity firms are showing a solid respect for the operating partner, because good operating partners can dramatically improve a company’s predictability and success. The objective is to have a broader impact on the portfolio company, and with my help, Main Line is committed to doing that.”

Prior to joining Main Line, Hart served as director and chief operating officer at Uretek-Archer, a privately owned composite-materials manufacturer for the medical devices, aerospace, military, and outdoor recreation products industries. Additionally, he had established Hart Advisory Group, a small-to-midmarket business advisory firm focused on driving client sales, income, and enterprise growth through best-of-breed operating practices, and he also owned Reeves Brothers, Inc., an international manufacturer of engineered industrial consumable products.