Social Impact Investors: How Cyrus Nikou of Atar Capital Is Helping To Empower Sustainable & Purpose-Driven Businesses
Impactful Investment: While this is Atar-specific, investing in companies that are also looking to make the largest impact on our world is at success’ core. Investing with impact ensures that our associated companies have the support of a like-minded firm focused not just on growing revenue but also growing results in the world. When you believe in the mission of your investments, you ensure that you’re putting your best foot forward and into the right long-term relationships.
As a part of our series about “Social Impact Investors,” I had the pleasure of interviewing Cyrus Nikou.
Cyrus Nikou is the founder and managing partner of Atar Capital. He launched Atar Capital in 2016 as a premier lower-middle market private investment firm focused on socially responsible investing and sustainable solutions to the world’s most challenging problems.
Cyrus also serves as an advisor for several Atar-associated companies, including WinCup Corporation, Pathways Health & Community Support, Keypoint Intelligence, Frontier Integrity Services, and Solero Technologies. Those companies comprise just part of Atar’s global reach, which spans a dozen companies with combined annual revenues of $1.5 billion and more than 13,000 employees around the world.
Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
I started my career in private equity in 2009 in a partnership where both my partner and I had different strengths we brought to the table. We spent about seven successful years working together and decided to part ways to pursue different opportunities, which led me to launch a lower-mid-market firm. Seeing how crowded the mid-market is, it was apparent that competition from larger funds would cause more obstacles than the opportunities were worth. You can see dozens of bids for a deal in that space, and I discovered the lower-mid-market is the sweet spot — you’re able to make a larger impact with businesses in a space that is typically ignored.
Can you share a story with us about the most humorous mistake you made when you were first starting? What lesson or take-away did you learn from that?
While I have surely had some missteps along the way, I don’t view them as mistakes but rather learning opportunities that I’ve used to grow, so as not to make the same missteps next time. No part of my journey and career has been a mistake — every experience is just an opportunity to learn.
Are you able to identify a “tipping point” in your career when you started to see success? Did you start doing anything different? Are there takeaways or lessons that others can learn from that?
The acquisition of Pathways from Molina Healthcare. This was a major deal and announcement with a large company that changed the look and feel of the organization from the inside out, allowing us the opportunity to turn-around a business that was broken at the time of the acquisition in 2018.
Over the course of the first six months, we took an organization that was cash flow negative to break even — proving our capabilities to our team and the private equity market and the ability to help companies grow and scale their businesses further and operate at healthy, profitable margins. Since inception, Pathways has had 28 acquisitions, all operating independently. To provide more cohesion, Pathways recently announced a new brand launch under one single company name — Clarvida.
Following the Pathways deal, we’ve opened the door to additional deal-flow in and beyond healthcare that has put Atar Capital on the map. This built our confidence to pursue larger deals and compete with bigger funds for larger-sized businesses.
None of us are able to achieve success without some help along the way. Is there a particular person or mentor to whom you are grateful who helped get you to where you are? Can you share a story about that?
There is no one person to name, as the entire team at Atar Capital has been integral to getting us to where we are now. Each person has a strategic role to play in helping our firm and portfolio companies grow. The trust you must have in your team — from finance to operations to business development and beyond — is paramount to success. When you surround yourself with people that bring different backgrounds and perspectives to your work, there’s no limit to your organization and team’s growth potential.
You have been blessed with great success in a career path that many have attempted, but eventually gave up on. Do you have any words of advice for others who may want to embark on this career path but are afraid of the prospect of failure?
It comes down to risk tolerance — not just if you can withstand risk and adversity but if you have a business–focused mindset. And if you’re able to build a team with that same drive and goals, do it. It’s that simple.
Ok, thank you for that. Let’s now jump to the main part of our discussion. You are a PE firm who is focused on investments that are making a positive social impact. Can you share with us a bit about the projects and companies you have focused on, and look to focus on in the future?
We’ve built our portfolio around sustainable and purpose-driven businesses that can make a valuable and positive impact on the world. We invest in organizations that support mental health, sustainability, energy conservation, and more. Our model has always been to find companies that we can help grow and provide capital to help take them to the next level. Together, our family of companies work together to promote growth for good.
What you are doing is not very common. Was there an “Aha Moment” that made you decide that you were going to focus on social impact investing? Can you share the story with us?
Over the years, we’ve seen various deals hit our desks, but we started focusing our vision on investments that would have the most positive impact on our planet. There were business opportunities that I’ve passed on because they didn’t have a purpose outside of generating cash.
Our first major investment was RWS Facility Services (now Quest Resource Management Group) in 2017. Within Atar’s first year, we set the tone for responsible investing to follow, and that deal shaped Atar Capital’s theme of purpose-based investing. Seeing businesses that are making real impacts on critical issues like massive carbon footprint and waste elimination was eye-opening — and if you’re good at it, the large impact will show, and profits will follow.
Can you share a story with us about your most successful investment? Or an investment that you are most proud of? What was its lesson?
Our big three — WinCup, Solero Technologies, and Clarvida — are the big three for a reason: they have the largest global impact, making them the most attractive. But it’s like choosing a favorite kid — it’s impossible! Each organization is changing their respective industry in some way that’s leaving a lasting impact on our world.
Is there a company that you turned down, but now regret? Can you share the story? What lesson did you learn from that story?
Of course — I think that’s an inevitable part of the private equity business. You might sometimes allow your emotions to get involved and focus less on numbers and strategy from time to time, but I’ve learned over the years that business is business, and focusing on your firm’s mission must come first.
With confidence in your team and vision, swing to the fences — the only regret should be not giving every opportunity your all.
Super. Here is the main question of this interview. What are your “5 things I need to see before making a PE investment” and why? Please share a story or example for each.
- Size & Geography: Atar operationally focuses within the lower middle market of organizations and can invest in any platform or add-on investment that is impactful and commercially viable, allowing us to have a broad reach in an overlooked sector of the economy. We’ve historically focused on companies headquartered in North America and Western Europe but are not geographically constrained.
- Strength and Scalability: Always looking to grow companies or provide capital to take an enterprise to the next level, the business models we seek have an existing and reliable customer base with a justified market position. Companies with high growth potential and motivated management teams dedicated make for strong, reliable investments in return.
- A Robust Playbook: Operational strategies allow to swiftly execute carve-outs and divestitures from large Corporate Parents. Throughout the journey, we instill confidence within target constituents and employees in strategic relationships.
- Targeted Industries: At Atar, we actively partner with and seek companies in defined industries, such as automotive; healthcare; paper, packaging, & printing; technology; and more. By defining our core business priorities for investment, we’re able to target the right opportunities with businesses yielding the best outcomes.
- Impactful Investment: While this is Atar-specific, investing in companies that are also looking to make the largest impact on our world is at success’ core. Investing with impact ensures that our associated companies have the support of a like-minded firm focused not just on growing revenue but also growing results in the world. When you believe in the mission of your investments, you ensure that you’re putting your best foot forward and into the right long-term relationships.
You are a person of enormous influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
The foundation of Atar’s mission and vision is impactful and purpose-driven investment, and many causes are working to better our world. One that continues to stick out to me the most, though, is environmental change. Eliminating waste, pollution, and climate change concerns are and should be top of mind. Environmental impact affects us and future generations — we must do better and improve the world, and that takes all of us doing our part.
If you could tell other young people one thing about why they should consider making a positive impact on our environment or society, like you, what would you tell them?
Making an actual impact on the world for future generations, if not their own, is so important. Any monetary, time, or other type of investment that is meaningful would have not just short but also long-term impacts. Narrowing down your focus on certain industries — whether that be ESG (environmental, social, or governance-related), for example — can create a legacy for yourself while bettering the world around you for generations to come.
We are very blessed that a lot of amazing founders and social impact organizations read this column. Is there a person in the world with whom you’d like to have a private breakfast or lunch with, and why? He or she might just see this. 🙂
Though it might be a more obvious answer, I’d have to go with Warren Buffet — a contrarian investor, he holds for the long-term value and has paid off greatly. I like to think Atar operates similarly, almost like a small Berkshire Hathway in comparison. We can hold out for as long as we need to secure the right opportunities.
How can our readers follow you online?
Follow us on LinkedIn at https://www.linkedin.com/company/atarcapital.com/ and visit our website to learn more about our mission and vision: https://atarcapital.com/
Thank you so much for this. This was very inspirational, and we wish you only continued success!
Social Impact Investors: How Cyrus Nikou of Atar Capital Is Helping To Empower ……. was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.