DOES A SEARCH FUND WORK FOR ROLL-UPS?

I understand that one desirable characteristic of a target industry is one with a high degree of fragmentation. I’m curious as to how tuck-in / roll-up acquisitions of meaningful size are financed? Would existing investors contribute additional equity for subsequent acquisitions? If no appetite there, would you raise equity from new investors (and how would this be accounted for in the cap table)? I guess I’m really wondering if a traditional search fund is an appropriate vehicle for a consolidation play (vs going independent sponsor / fund / single sponsor). Would appreciate any thoughts / guidance on this!



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