Prophet Equity
Prophet Equity is a Southlake, Texas-based private equity firm founded in 2007 that makes control equity investments in lower middle market, asset-intensive, underperforming companies using its proprietary Holistic Value Creation methodology.
- Company typePrivate
- Founded2007
- HeadquartersSouthlake, United States
- Headcount11–50
- GTM typeB2B
- OfferingServices
What Prophet Equity does
Prophet Equity is a private equity firm headquartered in Southlake, Texas, founded in December 2007 by Ross Gatlin, formerly of Insight Equity, Bain & Company, Houlihan Lokey, and The Carlyle Group. The firm specializes in control equity investments in lower middle market, asset-intensive, strategically viable but underperforming companies, targeting investments of $5M-$50M in equity in companies with enterprise values of $10M-$250M and revenues up to $500M. Situations addressed include corporate carve-outs, divestitures, special situations, bankruptcies (including 363 sales), turnarounds, reorganizations, and family/founder succession events. The firm operates through two funds: Prophet Equity LP (~$275M, final close February 2010) and Prophet Equity II LP ($345M, final close August 2014).
Prophet Equity's core "technology" is its proprietary Holistic Value Creation (HVC) methodology, a Fortune 500-tested and PE-proven playbook that combines strategic, operational, and financial engineering toolkits to diagnose and drive value at portfolio companies. Principals sit on each portfolio company's Office of Change Management, with management teams incentivized through clear, uncapped compensation tied to realized business performance. Revenue mechanics are conventional fund management: management fees on committed/invested capital plus carried interest on realizations. Across approximately 75 corporate entities over 20+ years, the firm claims over $6 billion in revenue managed, $2.45 billion in investor value generated, and a track record of 5x invested capital with 65%+ gross IRR. Notable portfolio realizations include the sales of Acton Mobile (to Williams Scotsman for $235M, 2017) and CID Resources (to Superior Uniform Group for $88.4M, 2018).
Prophet Equity firmographics
Firmographics- Name
- Prophet Equity
- Legal name
- Prophet Equity LP
- Website
- https://prophetequity.com
- Company type
- Private
- Founded year
- 2007
- Operating status
- Operating
- Headcount range
- 11–50 employees
- Short description
- Prophet Equity is a Southlake, Texas-based private equity firm founded in 2007 that makes control equity investments in lower middle market, asset-intensive, underperforming companies using its proprietary Holistic Value Creation methodology.
- Ownership category
- akta.pro rank
Prophet Equity industry classification
Industry- Product category
- Private Equity Investment Management
- NAICS
- Portfolio Management and Investment Advice (52394), Other Financial Investment Activities (5239)
- SIC
- Investment Advice (6282)
- akta.pro primary industry
- Platform Buy-and-Build / Roll-Up Buyout (FSANABAI)
Keywords
Where Prophet Equity is headquartered
LocationHeadquarters
- HQ city
- Southlake
- HQ country
- United States
- HQ region
- North America
Offices1 record
Markets served
Prophet Equity business model
Business model- GTM type
- B2B
- Offering type
- Services
- Cost components
- Personnel, Operations, Marketing or Sales, Technology or R&D, Others
Revenue model
- Control Equity Investments: Prophet Equity generates returns through control equity investments in lower middle market companies, targeting special situations, turnarounds, corporate carve-outs, divestitures, and reorganizations. The firm aims for 2-3 equity investments per year with equity checks of $5M to $50M.
Go-to-market motion2 records
Distribution channels1 record
Marketing channels4 records
Prophet Equity product offering
Product offeringCore offering
Prophet Equity is a private equity firm that makes control equity investments in strategically viable, asset-intensive, underperforming companies in the lower middle market. The firm deploys capital of $5 million to $50 million per deal in companies with enterprise values ranging from $10 million to $250 million, targeting 2-3 equity investments per year across special situations, turnarounds, corporate carve-outs, divestitures, and reorganizations. Portfolio operations are driven by the firm's proprietary Holistic Value Creation (HVC) methodology, with principals actively engaged in portfolio company management.
Product overview
Prophet Equity is a private equity firm that provides investment management services. The firm makes control equity investments in strategically viable, asset-intensive, underperforming companies in the lower and middle market. Their investment approach utilizes a Holistic Value Creation (HVC) strategy to diagnose and drive value creation at portfolio companies. The firm manages two funds (Prophet Equity LP and Prophet Equity II LP) and does not offer technology products or SaaS platforms.
Differentiator
Problem solved
Functional benefit
Products and services
- Prophet Equity LP (Fund I) Debut private equity fund making control equity investments of $5 million to $50 million in lower middle market companies with enterprise values of $10 million to $250 million. Targeted 2-3 equity investments per year in special situations, turnarounds, corporate carve-outs, divestitures, and reorganizations. Raised approximately $275 million in total commitments including GP commitment.
- Prophet Equity II LP (Fund II) Second private equity fund making control equity investments in lower middle market companies using the same Holistic Value Creation (HVC) strategy as Fund I. Closed at $345 million hard cap from limited partners including international banks, pensions, funds of funds, and domestic endowments.
Quantifiable outcome
- Over $6 billion in revenue managed across entities over the firm's history
- +5 more outcomes
Companies that use Prophet Equity
Customer profileNamed customers7 records
Segments4 records
Ideal customer profiles5 records
Prophet Equity technology and API
TechnologyTechnology focussed No
API detail
- Has API
- No
- API docs
- API detail
Core technology
AI maturity
App detail
Feature1 record
Prophet Equity partnerships and signals
Strategic signalScale indicators7 records
Recent moves13 records
Expansion highlights4 records
Prophet Equity competitors and assessment
Company assessmentDirect peers
- Centre Partners: Centre Partners is a lower-middle-market PE firm focused on control investments in operationally challenged, family-owned, and founder-led businesses. It is directly comparable in check size, deal type, and value-creation approach to Prophet Equity.
- Wynnchurch Capital: Wynnchurch is a middle-market PE firm investing in special situations, complex carve-outs, and underperforming businesses, often through distressed processes. It is one of the most directly comparable lower-middle-market special-situations firms in the US.
- Sun Capital Partners: Sun Capital is a middle-market PE firm that invests in operationally intensive, often underperforming companies and works closely with management to drive operational improvements. Its operational, control-investing approach mirrors Prophet's HVC playbook.
- H.I.G. Capital: H.I.G. Capital is a large global alternative investment firm with a substantial middle-market special situations, turnaround, and operational improvement franchise. It overlaps directly with Prophet Equity's lower-middle-market, control-investment mandate.
- Mill Point Capital: Mill Point is a lower-middle-market special situations and turnaround-focused PE firm investing in complex carve-outs and underperforming businesses. Its mandate and check size overlap closely with Prophet Equity's $5M-$50M equity check range.
- Insight Equity: Insight Equity is a Texas-based middle-market PE firm focused on control investments in underperforming, asset-intensive industrial companies — exactly the same strategy Prophet Equity's founder previously led and which Prophet now pursues. The two firms directly compete for the same special-situation carve-out and turnaround opportunities.
- Littlejohn & Co. Littlejohn & Co. is a middle-market PE firm that co-invested with Prophet Equity on the Interstate Waste Services transaction. It pursues similar control investments in industrial, services, and consumer businesses and is a confirmed co-investor and peer.
Broad incumbents
- Olympus Partners: Olympus is a middle-market PE firm that makes control investments in industrial, business services, and consumer companies. It is a broader incumbent that competes for similar middle-market carve-out and operational improvement opportunities.
- Lone Star Funds: Lone Star is a large global opportunistic and distressed-focused investment firm active in 363 sales and special-situations acquisitions. Although much larger in scale, it competes with Prophet for distressed industrial and corporate carve-out opportunities in the US.
Others
- Carlyle Group: Carlyle is a global alternative asset manager where Prophet's founder Ross Gatlin previously worked. While Carlyle operates at a much larger scale and broader mandate, it shares the lower-middle-market industrial-distribution investment thesis and is thematically relevant.
Market position
Strengths1 record
Weaknesses5 records
Competitive moat4 records
Customer concentration
Prophet Equity social profiles
Digital presenceProphet Equity financial estimates
Financial estimateRevenue estimate
Valuation estimate
Prophet Equity leadership team
Management profileNumber of profiles
Profiles8 records
Prophet Equity funding detail
Funding detailFunding overview
Funding rounds
Investors
Funding detail is available on the Subscription and Enterprise plan.Contact sales →
Prophet Equity M&A and investment
M&A and investmentM&A2 records
Investments
M&A and investment is available on the Subscription and Enterprise plan.Contact sales →
Frequently asked questions about Prophet Equity
What does Prophet Equity do?
Prophet Equity is a private equity firm that makes control equity investments in strategically viable, asset-intensive, underperforming companies in the lower middle market. The firm deploys capital of $5 million to $50 million per deal in companies with enterprise values ranging from $10 million to $250 million, targeting 2-3 equity investments per year across special situations, turnarounds, corporate carve-outs, divestitures, and reorganizations. Portfolio operations are driven by the firm's proprietary Holistic Value Creation (HVC) methodology, with principals actively engaged in portfolio company management.
Is Prophet Equity a public or private company?
Prophet Equity is a private company. It is classified as founder individual operated bootstrapped and is currently operating.
When was Prophet Equity founded?
Prophet Equity was founded in 2007. It employs 11 to 50 people.
Where is Prophet Equity based?
Prophet Equity is headquartered in Southlake, United States, in the North America region.
How does Prophet Equity make money?
One revenue line is on record: control Equity Investments.
Who are Prophet Equity's main competitors?
Direct peers on record are Centre Partners, Wynnchurch Capital, Sun Capital Partners, H.I.G. Capital, Mill Point Capital, Insight Equity and Littlejohn & Co.. Broad incumbents are Olympus Partners and Lone Star Funds. Carlyle Group is listed as an others.
Does Prophet Equity have an API?
No public API is recorded for Prophet Equity.
What industry is Prophet Equity in?
Prophet Equity's product category is Private Equity Investment Management. Its primary akta.pro industry code is FSANABAI, Platform Buy-and-Build / Roll-Up Buyout. Its NAICS code is 52394 and its SIC code is 6282.