What I Learned From a PE Managing Partner Who Bet on One Sector

I spent thirty minutes on Zoom this week with Rowan Taylor, Managing Partner at Liberty Hall Capital Partners. Liberty Hall does one thing: middle market aerospace and defense buyouts, fifty to a hundred fifty million dollar equity checks, control positions. They have done this since 2011 and nothing else.

That single fact was the reason I wanted to talk to him. Every case study I read about hedge funds and PE firms pushes generalist thinking, spread your bets, diversify, do not get too attached to one sector. Taylor built a firm on the opposite bet, and it has worked for fifteen years. I wanted to know why.

The edge is information, not luck

His answer was less mystical than I expected. Specialization does not work because of some secret formula. It works because going deep in one industry compounds knowledge in a way that being spread across ten industries never can. You learn which suppliers are reliable, which contracts are sticky, which programs the Pentagon will keep funding through the next decade and which ones will not survive the next budget cycle. That knowledge turns into conviction, and conviction is what lets a fund pay more for the right company and still trust it will work out. It is also what lets a firm keep buying when a downturn scares everyone else off. Generalist funds play defense in a downturn because they do not know the sector well enough to tell a real opportunity from a falling knife. Specialists get to play offense.

Holding instead of selling

The clearest example of that conviction was Comply365, a company Liberty Hall chose not to sell in 2024. Most funds hit a natural exit window and take it. Taylor's team ran a continuation fund instead, led by Lead Edge Capital, and kept the position. The reasoning was specific, not sentimental: the business had two lines growing one hundred percent organically with real runway left, and there was a genuine acquisition opportunity sitting on top of that organic story. Selling early would have handed the second half of the return to whoever bought it next. That is a decision a fund without deep sector knowledge would have a much harder time making with confidence.

Former military officers in the diligence room

The other piece of the model that stuck with me is Liberty Hall's Operating Advisors, mostly former aerospace and defense CEOs and senior military officers, involved from diligence onward rather than added after the deal closes. A retired officer sitting in on diligence brings something a banker cannot. They have actually run these programs, they know which defense businesses are credible, and they open doors into the Pentagon and Department of Defense that a young associate never will. Taylor put it simply: there is no better source of leadership training than the military, and it shows in how these advisors run a diligence process.

Why Charleston

I also asked why the firm is headquartered in Charleston instead of DC or New York, since that is where most aerospace and defense capital and talent sit. The answer was two decisions stacked on top of each other, not one. Part of it was personal, wanting a better quality of life for his family and his team. The other part was strategic. The Southeast is the fastest growing aerospace and defense market in the country, Charleston's airport is efficient, Joint Base Charleston and Boeing's local plant are both here, and running an office here simply costs less. Neither reason alone would have been enough. Together they were.

The mistake he still brings up

I always ask people what they got wrong, because the polished version of a career never teaches you anything. Taylor's answer went back to early in Liberty Hall's life, a deal where his team was too trusting of the other side and it cost them real money in advisor expenses they did not need to spend. No dramatic story attached to it. Just a reminder that trust in a negotiation is a decision, not a default setting.

What I am taking from this

I write this journal, and I am building an event study on acquirer returns around M&A announcements right now largely because I want to actually understand one part of markets instead of having a shallow opinion on all of them. Talking to someone who bet an entire firm on that same instinct, with fifteen years of results behind it, is the closest thing I have to proof that the bet is a good one. I offered to send Taylor the event study once it is finished. That is the actual point of a conversation like this. Not the thirty minutes. The reason to still be in his inbox in three months.