Introduction 

At NGP, our mission is simple, meaningful, and ever-present in all we do: Honoring legacy in buying and transforming enduring businesses alongside values-aligned leaders. We accomplish this with a keen eye on our three, simple core values: Relationships, Rigor, and Results. As we enter 2026, that mission and associated set of core values provide both clarity and conviction — especially after a year that required patience, discipline, and long-term thinking.

2025 was not a year defined by speed or volume. It was a year defined by the single biggest exit in the firm’s history and patient early deployment of newly activated Fund III. Further, the progress we made — across people, pipeline, systems, and portfolio — has positioned us well for what will be a materially more active deployment year ahead in 2026.

The Small Company Buyout Landscape: Selectivity Matters More Than Ever 

Our model continues to attract exceptional talent and growing pools of capital. At the same time, competition for high-quality businesses remains intense, seller expectations have remained elevated, and the dispersion between good and poor outcomes has widened (just see some of the most recent research coming out of Stanford’s GSB, or NGP friend, AJ Wasserstein’s whitepaper “How are Search Fund Investors Really Faring”). We are reminded every day that NGP has truly built something special and differentiated in this part of the market.

In this environment, good outcomes increasingly depend on good judgment, underwriting discipline, and post-close execution. Throughout 2025, we remained anchored to our core, proven approach: partnering with exceptional, values-aligned operators to acquire mission-critical, non-discretionary B2B companies at valuations and structures that allow for durable equity value creation. These businesses may not always be flashy, but they sit at the center of the economy — and when led well, they continue to offer compelling risk-adjusted returns.

2025: Discipline, Patience, and Foundation-Building 

We are thrilled with the three platforms we closed in 2025 – Texas EcoGrow, Plumbing and Drain Professionals, and TriStar Building Services. All are performing on plan in the early days of our ownership. However, capital deployment in 2025 was slower than originally planned for in early 2025. This was not due to a lack of effort and hard work from the team, but rather (1) continued heightened competition for small assets and (2) a deliberate choice to walk away from situations that did not meet our standards on price, structure, or leadership, seller and thesis alignment. We believe patience in moments like these is necessary for protecting the return profile we’ve proven available in our model.

Portfolio Performance 

The banner exit of DAWGS from Fund II in the first quarter set the firm up for a great year. It was the biggest outcome in the firm’s history in terms of IRR, MOIC, and total enterprise value, by a pretty wide margin. We were thrilled with this outcome, but did not rest on our laurels. We had some serious work to do across the rest of the portfolio.

Growth across parts of the portfolio was more sluggish than expected for much of the year, driven by a combination of deliberate technology, talent and infrastructure investments in the case of our companies, combined with macro-economic headwinds in our businesses with exposure to general commercial and residential construction. Importantly however, we saw a meaningful acceleration in the fourth quarter, with improving revenue and EBITDA growth trends and stronger execution across several businesses. Our 2026 Annual Operating Plans reflect this momentum and anticipate further acceleration—both organically and through disciplined add-on M&A. More on that growth at our AGM in the coming months.

People and Team Development 

Our CEOs-in-Residence (yes, we updated the name this year) remain the heart of the NGP model, and the bench we’ve built continues to deepen. Equally important, 2025 was a year of strengthening the firm itself. We made a few difficult but necessary decisions across the firm, while also making several strategic hires to ensure we have the capacity, systems, and talent required to execute at a higher pace in 2026. And in March, we will welcome a senior investment professional to the team, bringing additional experience and leadership to sourcing, underwriting, and portfolio support. Lastly, our team and culture are stronger than they’ve ever been, anchored by clearer internal systems that support high performance, deepen collaboration across teams, and help us retain our very best people.

Systems and Infrastructure 

Significant progress in 2025 was made behind the scenes. We continued the firm-wide rollout of Salesforce CRM and further standardized our investment and portfolio management processes. We also made practical strides in integrating AI-enabled tools into sourcing, diligence, reporting and across the portfolio — not as replacements for judgment, but as tools to sharpen decision-making and improve efficiency. These investments meaningfully enhance our ability to scale responsibly.

Capital, Performance, and Perspective 

From a capital standpoint, we remain well positioned. Our funds are supported by a highly aligned LP base that understands both the patience required in this strategy and the power of return asymmetry when discipline is maintained.

• Fund I continues to perform strongly, on track to be a top-decile fund for its vintage despite some short-term challenges at one of the two remaining portfolio companies.
• Fund II completed platform deployment in Q1 with the acquisition Texas EcoGrow – the eighth platform for Fund II. On a vintage-adjusted basis, Fund II is on a similar trajectory as Fund I, with 2026 expected to be a pivotal year for continued business building, value creation, and strategic M&A investment.
• Fund III remains well-capitalized, having closed its first two platform investments in 2025, and is positioned to accelerate deployment in 2026 supported by four CIRs that began in the second half of 2025 — now a total of six. This has led to a sharp increase in deal flow, and a pipeline of approximately $58 million in enterprise value across one LOI, one IOI, and four qualified prospects, representing roughly $15 million of aggregate EBITDA currently under active engagement.

We also continued to learn. In several instances, whether evaluating growth initiatives or alignment with sellers, we chose not to proceed when conditions were not right. In each case, we prioritized long-term value over short-term optics or deployment goals. These decisions reflect our core values and our commitment to maintaining a very high bar.

2026: Positioned for Acceleration 

As we look ahead, we believe 2026 represents an inflection point. The building blocks are firmly in place:

• A deeper, growing and more experienced investment team
• Scalable systems and clearer processes
• Portfolio companies showing renewed momentum in Q4 2025 and actionable growth plans, calling for meaningful growth in 2026
• Increased focus on add-on M&A activity in existing portfolio companies (five add-ons completed across Fund I and II in 2025), we enter 2026 with one add-on closed, two LOIs outstanding, and five qualified prospects representing $5.7M of aggregate EBITDA

Our focus in 2026 is straightforward: deploy capital thoughtfully, accelerate organic growth, pursue disciplined M&A, and position select businesses for future liquidity — without compromising the principles that define us.

A Personal Reflection 

Last year, the leadership team and I summited two “14’ers” (mountains in Colorado that peak above 14,000 feet above sea level)…in one day! It was the perfect capstone to a strategy offsite that challenged us both mentally and physically. We learned a lot about ourselves, each other, and how we best come together as a team to achieve a common goal.

I often think about that experience in the context of building NGP. Some years are about distance traveled; others are about elevation gained. 2025 was the latter. And from where we stand today, the path forward is clearer, and more exciting, than ever. 2026 will continue to be about gaining elevation, perhaps just at an accelerated pace, which we now have the infrastructure to support.

Closing

Thank you for your continued trust and partnership. We do not take it lightly. With the right people, the right systems, and a disciplined commitment to our mission, we believe 2026 has the potential to be a defining year for NGP.

With gratitude and conviction,

Brian

 

 

Brian O’Connor

Managing Partner