New Firm Launches with ‘Permanent Capital’ to Acquire Gulf South Businesses

BATON ROUGE, LA – April 23, 2026 – A new investment firm, Riley Group Holdings, Inc. (RGH), officially launched today from its Baton Rouge headquarters with a distinct and patient strategy: to acquire, operate, and indefinitely hold essential service businesses across the Gulf South. Founded by DeMarcus Riley, the firm is structured as a permanent capital holding company, a model that eschews the typical quick-flip mentality of private equity in favor of long-term value creation.

The company is targeting small to mid-sized businesses in Louisiana, the Texas Gulf Coast, the Mississippi Gulf Coast, and Arkansas, aiming to provide a new succession path for owners who prioritize the future of their companies over a rapid exit.

A Different Breed of Investor

Riley Group Holdings enters a bustling M&A market with a model that directly addresses a common anxiety among founders of small and mid-sized businesses: the loss of legacy. Unlike traditional private equity funds, which typically operate on a 10-to-12-year cycle that necessitates selling portfolio companies to return capital to investors, RGH’s permanent capital structure imposes no such deadline. This approach, famously championed by firms like Berkshire Hathaway, allows an acquired business to grow and reinvest its earnings over decades, fostering compounding returns and operational stability.

“Riley Group Holdings was built to acquire great businesses and hold them indefinitely,” said DeMarcus Riley, Founder and President of RGH. “We are long-term partners to owners who care about their legacy, employees, and long-term success.”

This "founder-friendly" philosophy is designed to appeal to a specific type of seller. In the lower middle-market, where RGH plans to operate, many owners are approaching retirement without a clear succession plan. The prospect of selling to a traditional investor often raises concerns about drastic cultural changes, employee layoffs, or the dismantling of a life's work for short-term financial gain. By promising to preserve company culture and retain employees, RGH positions itself as a custodian of that legacy, not just a buyer. The focus shifts from financial engineering for a quick sale to operational excellence and disciplined cash flow management for sustainable, generational growth.

Targeting a Resilient Economic Backbone

The firm's investment thesis is anchored in what it calls "recession-resilient" industries. RGH is not chasing fleeting tech trends but is instead focusing on the non-discretionary, often unglamorous, backbone of the regional economy: facility services, infrastructure maintenance, and route-based service operations. Research and historical economic performance strongly validate this strategy. These sectors provide services that remain in demand regardless of broader economic cycles.

Facility services, which include everything from commercial cleaning to specialized industrial maintenance, are essential for the safety, hygiene, and functionality of buildings. During economic downturns, businesses may look for cost efficiencies, but they cannot afford to neglect the upkeep of their physical assets, which could lead to far greater costs down the road.

Similarly, infrastructure maintenance is a critical, non-negotiable expense. The Gulf South is a hub of industrial activity and energy infrastructure, all of which requires constant upkeep. The global market for infrastructure operations and maintenance is projected to grow significantly in the coming years, driven by aging assets and increasing urbanization. Demand for these services is durable, as neglecting maintenance leads to reduced reliability and significant economic consequences.

Route-based services—spanning logistics, waste management, and specialized field services like HVAC repair—also exhibit strong resilience. While some segments may see volume shifts, the fundamental need to move goods and maintain essential home and business systems persists. During recessions, consumers are more likely to repair an existing appliance or vehicle than buy a new one, sustaining demand for these local service providers.

Consolidating a Fragmented Landscape

Riley Group Holdings is targeting a specific and often overlooked segment of the market: businesses with $500,000 to $2,000,000 in Seller’s Discretionary Earnings (SDE). This places it squarely in the lower middle-market, a landscape characterized by a high degree of fragmentation. Industries like facility services and infrastructure maintenance are populated by hundreds of small, local operators, creating a significant opportunity for consolidation.

By acquiring and integrating these businesses, a holding company can introduce operational efficiencies, leverage technology, and achieve economies of scale that are unavailable to smaller, standalone companies. This can lead to improved service quality, better career paths for employees, and stronger, more durable regional companies. The M&A market for these businesses is active, but also notoriously inefficient, with many companies that go up for sale failing to find a suitable buyer.

RGH’s value proposition aims to cut through that inefficiency by offering a clear, compelling alternative for owners of businesses with an established customer base, recurring revenue, and a strong local reputation. The firm’s "operator mindset" suggests a hands-on approach focused on enhancing what already makes a business successful, rather than imposing a rigid, top-down corporate structure.

As it begins its search for acquisitions, Riley Group Holdings is also actively building a network of investors, lenders, and advisors who align with its patient, long-term philosophy. The success of this new venture will depend not only on its ability to identify and acquire strong businesses but also on its capacity to convince a generation of Gulf South entrepreneurs that their legacy is safest with a partner committed to the long haul.