Under the leadership of John Stewart, MiddleGround Capital’s Founding and Managing Partner, we’ve built our reputation by doing things differently. In this feature, John sits down with Shiv Narayanan, Founder & CEO of How To SaaS, and shares how his unconventional path from the shop floor at Toyota to co-founding MiddleGround Capital, a private equity firm with over $4.1B AUM, shaped our operational approach to value creation.

If you enjoyed this conversation, check out “The Private Equity Value Creation Podcast” for insights from leading investors, operators, and advisors in the private equity industry.

From the Toyota Shop Floor to MiddleGround Capital

John’s career doesn’t fit in the standard private equity mold. He didn’t start in the Ivy League or collect a string of Wall Street investment banking internships. Instead, he dropped out of college, took a job on the night shift at Toyota, and built his career from the ground up.

What followed was nearly two decades of operational experience, culminating in his role leading Toyota’s manufacturing operations across Europe. Along the way, he picked up more than just technical know-how; he developed a leadership philosophy around continuous improvement and building resilient businesses. In 2018, he co-founded MiddleGround Capital and put that philosophy to work.

We’ve scaled since opening our doors in 2018; today, MiddleGround manages over $4 billion in assets across B2B industrial and specialty distribution industries.

The MiddleGround Capital Playbook

MiddleGround was built with a clear purpose: to roll up our sleeves and create value where others couldn’t.

Roughly 40% of our team comes from operating backgrounds. For each investment, we build a value creation plan that’s grounded in execution and touches every line of the P&L; we examine shop floors, production schedules, supply chain contracts, workforce dynamics, and more to identify opportunities. On average, these plans generate 25–75% of our return, without relying on heavy debt structures or aggressive financial engineering.

Unlike traditional firms that fund transactions with debt on Day 1, we often enter deals with little to no leverage, only introducing debt once we’ve proven the business can generate the free cash flow needed to meet covenants and sustain performance. This more conservative model has helped us maintain discipline while still deploying capital efficiently, averaging approximately $800 million annually, even in unfavorable markets.

Why We’re Betting on Regional Manufacturing

MiddleGround’s strategy is rooted in regional manufacturing. While others chased low-cost labor overseas, we stayed focused on companies that source, build, and sell within the same geographic footprint.

Regional supply chains are more resilient, less exposed to currency fluctuations and global disruptions, like tariffs, and better positioned to respond to customer demand. That’s especially important in today’s market, where geopolitical turmoil, trade uncertainty, and reshoring are impacting the next wave of industrial growth. As John said, “This is the model I learned at Toyota. It works and it’s one we’ve carried forward.”