Private equity firms are stretching the timeline of their average investment cycle; their peers in the tech services distributor market plan to stretch the timeline even further.
Bridgepointe Technologies hosts its annual conference in Orlando this week, half a year after its investor Charlesbank Capital Partners reupped in the company through a continuation vehicle with Carlyle AlpInvest.
Bridgepointe executives at the show will outline their investment plan, which includes a heavy emphasis on organic growth. The company hired a chief client experience officer and has expanded its team of client advisors to 25 to help Bridgepointe equity partners manage and cross-sell into their customer bases, and it will expand its back office team to improve its support with quoting, pricing, commissions, finance, marketing and project management, according to Bridgepointe CEO Scott Evars.
“Obviously we'll always listen and look at transformational M&A, but the playbook is just more of the same for the near term,” Evars told Channel Dive in an interview last week.
Charlesbank’s decision to stay in the business is part of a trend. Five months before Charlesbank’s deal, Pamlico Capital announced it would remain an investor in Avant Communications while adding Court Square Capital Partners. Then last week, Telarus — arguably the largest TSD — said Columbia Capital would stay on board with co-investor Snowhawk Capital.
The initial investments happened in 2020 (Telarus), 2021 (Avant) and 2022 (Bridgepointe), respectively. While PE firms historically invested for three to five years, all three major PE firms in the TSD market have already moved beyond that norm.
“For years, people in this channel have said PE takes over after three years and pushes the founders out,” P2 Software Sales and Managed Services Founder and CEO Bill Patchett wrote on LinkedIn last week. “Some people really believe that.”
The founders of all three companies have told Channel Dive that seeing their peers keep their original investor has validated their own models.
“Isn't it funny that you can't cut your way to growth?” Evars said. “You have to invest, and investment is doing right by all your partners and customers, and that's what everyone's doing.”
Private equity trends
Lengthened investment cycles are becoming the norm in private equity, but TSD backers may be extending for different reasons.
Private Equity Info found in an analysis of 13,757 private equity exits from 2021 to mid-2026 that investment cycles have extended across the board, with a median rise of 1.1 years. Investments in technology companies stretched from 4.5 years in 2021 to a median of 5.8 years, per the report. Business and professional Services have gone from 4.6 years to 6 years.
“Across many industries in the United States, we're seeing more and more of these continuation vehicles,” said John Holland, managing director of investment banker Corporate Finance Associates, who added he did not have specific knowledge of the Charlesbank deal.
However, the reasons for holding onto portfolio companies may vary widely in the IT services industry compared to the rest of private equity dealings. Private Equity Info attributed the extensions to the backlog of investments that PE firms are now trying to clear with higher interest rates than they faced back in 2021. Holland sees that trend affecting the broader PE market, but he said the managed service provider market he works in seems immune.
“I haven't seen any sign in the MSP world of valuations going flat or dropping,” Holland said.
TSDs operators and backers also say they are insulated from the broader macroeconomic challenges. They say PE firms have entered a second round because they strongly believe in the businesses they purchased.
“We're one of the best returns in the current portfolio at Charlesbank and also in their 20-plus year history,” Evars said.
Charlesbank Managing Director Pedro Vaz said Bridgepointe has increased earnings by more than eight to nine times since the company’s initial investment.
“The number of partners and bookings has grown significantly, and organic growth has maintained double digits through the whole period,” Vaz told Channel Dive in an interview.
Some firms want to sell high and stick with their losses, but smart investors see it differently, Telarus CEO Adam Edwards said.
“They double dow.n on their best investments because your best investments are likely to continue the trend they have,” Edwards said.
The other factor is the nascent nature of the TSD market. The industry was unknown to institutional investors for ten years, and many of the firms that entered it first feel that they can shape its frontiers.
Consider the insurance brokerage industry, which Charlesbank bought into before Bridgepointe. Charlesbank made a majority investment in World Insurance Associates in 2020 and announced in June 2026 that it would stay on with Goldman Sachs as a co-lead investor.
Numerous PE backers of TSD and technology advisor firms have compared those financial models with that of insurance brokerages. Moreover, the TSD space was similarly fragmented and composed of small firms when PE entered.
“You find many ecosystems where you'll have 20 years of continued strong private equity returns in a market that has these attributes,” Vaz said. “... We think that many other firms will likely have a similar long term view here, just given how early it is in terms of the investment in this space.”
Randy Jeter, CEO and managing partner of Procure IT and an advisor to PE investors in the channel, believes the runway is long.
“The space sees a $10 billion dollar company in the next 8 to 10 years,” Jeter said. “Well, how do you get to a $10 billion company? You've got to do acquisitions. You've got to be able to have big capital behind you to do it. You've got to fund it with debt and growth, and you might cross over into other areas and buy other components that drive value to it.”
Some TSDs are evoking of Bridgepointe’s model as they implement capital programs and drive exclusivity with their agent partners, Jeter said. Historically, many agents sell through multiple TSDs, while Bridgepointe’s agents were usually exclusive to Bridgepointe and used its branding.
Bridgepointe’s equity partner program, launched in 2022 with Charlesbank has cemented the exclusivity. Nearly 60 Bridgepointe partners have done an equity deal, and most of them got paid when Charlesbank did its second.
“This truly a partnership,” Bridgepointe Chief Strategy Officer Scott Kinka said. “If this were a law firm, there would be 59 names above the door.”
Devan Adams, principal analyst at Channel Dive sister company Omdia, said the new investments will help TSDs expand their digital portals, attract suppliers in new technology categories and recruit non-traditional partner types. Furthermore, the deals raise the visibility of the market, Adams said.
“We often have heard that this market is a black box,” Adams told Channel Dive at Canalys Forums Americas on Monday. “Well, this is opening up holes or providing a little bit more light into that black box that others outside these capital investment firms are starting to see and can appreciate the value.”
TSDs and their investors remain in the early innings of an “amazing growth story,” Evars said.
“All of these firms that were in the first round of funding doubled down and continue to stay in the investment, and that's because they see along with us the real opportunity,” Evars said. “There's plenty of meat on the bone.”
