Rising Junior finds Success and Flexibility while Interning at Search Fund

Name: Derek Smith

Year: Junior

Major: Economics

CFS Class: Business Field Studies

Employer: Torchpass Management

This summer quarter I am interning at Torchpass Management, a Chicago-based search fund operated by Kellogg alumnus Russ Johnston. Search funds are a little-known version of private equity whereby investors provide entrepreneurs and aspiring business owners the money to acquire and operate a business to the benefit of the fund’s investors. At Torchpass, we targeted companies in a wide variety of industries that demonstrate high degrees of fragmentation and a potential for strong and stable future growth. The primary task of a search fund is to generate leads; this is what all four of the interns spent the majority of our time on. Each week, we would be responsible for identifying 125 target companies within a select industry that conform to certain requirements, and compile them into a set of spreadsheets. Our boss then takes that information, filters through it, and reaches out to the companies that embody what Torchpass is looking for. There is a fairly low response rate, so there needs to be a steady influx of potential targets to maximize the chance of finding a company that would be a perfect fit for Torchpass. Beyond lead generation, the other interns and I would occasionally be tasked to focus on individual companies at a deeper level. I had the opportunity to look at broker materials and financial statements and perform screens that I then presented to my boss to provide insight on companies that weren’t sourced by us. Overall, I had a really good experience. I found analyzing potential investments with the broker materials to be the most exciting part, since I got to focus entirely on a single company in depth rather than dozens at a surface level. My internship at Torchpass was also highly beneficial to my academic needs; because it’s a remote internship that’s less particular about which specific hours you spend working each day (beyond scheduled meetings), I was able to take additional classes on top of the CFS course without having to worry about scheduling issues. I’m excited to see what’s to come in the final weeks of my internship.