Soon after acquiring ARMStrong Receivable Management, one of the largest insurance and commercial B2B receivable management firms in North America, in October 2023, BharCap Partners executed a structural realignment—separating the company into two focused entities: ARMStrong Insurance Services and Altus Commercial Receivables.
The move—retaining ARMStrong Insurance Services, a leading provider of specialized audit and recovery solutions, and auctioning off Altus Commercial Receivables, the company’s commercial services division – was both strategic and practical. With Altus now divested, BharCap can fully dedicate resources to the insurance services business, which serves nearly all of the top 25 U.S. property and casualty insurers. Through client expansion, cross-selling opportunities, and targeted mergers and acquisitions, the firm is positioned to scale the core business.
“Altus Commercial Receivables is a great business, but it did not fully align with our strategic plans. There was significant private equity interest in Altus, and we’re confident the team will continue to create value alongside their new partners. It was truly a win-win outcome,” explains Jim Rutherfurd, one of BharCap’s Co-Founding Partners. The platform had always been a mix of insurance clients, creating limited appeal for strategic buyers. By executing on their plan to separate the businesses, BharCap unlocked value while retaining the division most aligned with their expertise and with the highest strategic exit potential.
The Rule of 40 Guideline
Founded in February 2021, BharCap Partners invests in dynamic businesses across the financial services sector. The firm, which manages approximately $2 billion of capital, has completed ten investments across its first two funds—five in Fund I and five in Fund II—along with more than 20 bolt-on acquisitions. BharCap has also successfully completed three exits.
BharCap focuses on control buyouts in asset-light financial services companies. “We call them ‘Rule of 40’ businesses—companies that generally can operate at a 30% profit margin and achieve 10% organic growth,” explains Bharath Srikrishnan, Co-Founder and Managing Partner. The firm targets sectors such as wealth management, insurance brokerage, payment processing, tax and accounting, and other recurring service models connected to financial services. Srikrishnan’s background as an operator before private equity shapes the firm’s approach, emphasizing the role of a value-added empathetic partner who works alongside management teams to accelerate growth and enhance long-term enterprise value.
A core pillar of BharCap’s strategy is providing the first institutional capital to founder-owned, non-sponsored businesses. “The majority of our business is first institutional capital into founder-owned, non-sponsored businesses,” Srikrishnan explains. This enables close collaboration with entrepreneurs, combining operational expertise with patient capital. BharCap’s team works hands-on with management to unlock value through operational improvements, strategic expansion, and disciplined execution. This high-engagement model not only drives performance but also positions portfolio companies for future growth, whether organically or through acquisitions.
Leveraging Skillsets
The firm also pursues a direct-to-sponsor origination strategy—acquiring specialized businesses from generalist private equity firms where BharCap’s sector-specific expertise can deliver another level of growth.
“We look for situations where our skillset, capabilities, and entrepreneurial work style could unlock another level of growth.”
– Bharath Srikrishnan, Co-Founder and Managing Partner
Financial services certainly has its appeal. It’s a large sector, representing approximately 20% of U.S. GDP and a similar percentage of the S&P 500. It’s fragmented, so there is opportunity in the middle and lower middle market to acquire, scale and sell businesses to strategic buyers or larger funds. It is also diverse—insurance, lending, asset management, wealth management, and financial technology are all driven by different economic factors, some of which are cyclical, while others are counter-cyclical. “That diversity allows us to build portfolios designed to perform through multiple business cycles, regardless of broader market conditions,” Rutherfurd explains.
A Meeting of Minds
Financial services certainly has its appeal. It’s a large sector, representing approximately 20% of U.S. GDP and a similar percentage of the S&P 500. It’s fragmented, so there is opportunity in the middle and lower middle market to acquire, scale and sell businesses to strategic buyers or larger funds. It is also diverse—insurance, lending, asset management, wealth management, and financial technology are all driven by different economic factors, some of which are cyclical, while others are counter-cyclical. “That diversity allows us to build portfolios designed to perform through multiple business cycles, regardless of broader market conditions,” Rutherfurd explains.
BharCap Partners was born from a shared vision between its five co-founders, who first met at Pine Brook a decade ago. Rutherfurd had served as a Partner and Head of Investor Relations, as well as a member of the Investment Committee, while Srikrishnan was a Partner on the financial services investment team and a member of the firm’s Investment Committee. Ethan Wang, Kevin Becker and Ryan Gean were part of the financial services investment team. “We all got there pretty much about the same time… and it was clear that we were on the same wavelength about how deals get done and what’s important and what’s not,” says Rutherfurd.
Their professional alignment quickly developed into a friendship, reinforced by a mutual desire to build a firm without the structural limitations of larger organizations. For Srikrishnan, the motivation was straightforward: “We wanted to do business a certain way… and maybe oftentimes it’s easier to do that if you start from a clean sheet of paper.” That clean sheet became BharCap Partners—a platform founded by Srikrishnan, Rutherfurd, Ethan Wang, Kevin Becker and Ryan Gean to apply their deep sector expertise and operationally minded approach to asset-light financial services investments.
Srikrishnan also credits the firm’s early momentum to the relationships built through the National Association of Investment Companies. “I want to repeat how grateful we are to the NAIC, because those early introductions, seeing people at the events and that cadre of people who were NAIC members who support diverse emerging managers, were really, really important to us,” he says.
In the early days of BharCap Partners, Rutherfurd recalls, “We certainly had challenges in the beginning, but we managed through them as a team and have emerged stronger on the other side.” These growing pains, however, passed quickly, giving way to the advantages of a lean, collaborative environment.
“It’s just so much better to have a small, cohesive team where everybody knows each other and has worked together. We are highly efficient and hear that from our management teams often.”
– Jim Rutherfurd, Co-Founding Partner
Navigating Risks
BharCap’s focus on service-based, asset-light businesses largely insulates the firm from tariffs and direct interest rate impacts, the founders say. “Every asset we have is performing on or above plan, both in Fund I and Fund II,” says Srikrishnan. The current pipeline includes three companies under exclusivity, with expected closings in Q3, Q4, and early next year. Most opportunities come from years of relationship building with founder-led businesses, alongside targeted outreach to other private equity sponsors where BharCap’s sector expertise can unlock additional value.
From a macroeconomic standpoint, there are no significant concerns given the diverse economic drivers across the multiple sub-sectors of financial services. Srikrishnan emphasizes the importance of aligning bottom-up business fundamentals with long-term sector trends in areas like insurance brokerage, wealth management, and tax and accounting. While there may be global concerns on the horizon, 2025 was a strong year for BharCap. In June, the firm announced the final close of its oversubscribed Fund II, raising $652 million in equity commitments—30% above its $500 million target. The successful close represented a defining milestone for the firm as it continues to leverage its deep network of relationships with entrepreneurs to source unique opportunities.
Looking ahead, BharCap’s founders are positioning the firm to benefit from the next generation of leadership, which includes Co-Founder and Partner Ethan Wang along with Partners Kevin Becker and Ryan Gean, who have worked together for a decade. However, for now, the firm will continue to focus squarely on U.S.-based financial services opportunities. “There’s so much opportunity. There’s no reason to stray from that,” Srikrishnan asserts.