Grain says not all private equity broadband investors are created equal

Private equity (PE) money has been flooding into the broadband market over the past two years. Everywhere you look, someone has a PE partner of some kind. AT&T teamed with BlackRock, Brightspeed has Apollo Management and Mubadala, Ting Internet has Generate Capital and Ziply Fiber has WaveDivision Capital, Searchlight Capital and others. But according to Grain Management, not all PE investors are created equal. “There are natives and there are tourists,” said a representative for Grain Management. Natives, of course, are those who—like Grain—specialize in telecom and have a track record of successful investments in fiber, towers, spectrum or data centers. “This sector has been flooded with first-time investors, but what distinguishes successful investors is a skillset and history in the [telecommunications] space.” Grain has a vested interest in making this argument. The company considers itself a broadband specialist and has already invested in a range of companies including Great Plains Communications, Ritter Communications, Summit Broadband, Hunter Communications, LightRiver and, most recently, Quintillion. Asked what exactly “native” investors bring to the table that first-timers don’t, the representative said specialists can access opportunities that other less specialized firms may not. That’s in large part because of the extensive relationships these companies have built up with vendors and other partners.