Both the easy and the difficult answer to the question is: transformational opportunities where we can partner with owner-managers to create extraordinary business performance and enjoy the resulting financial rewards. Given this high bar and our small team, we are very selective about the companies with which we get involved. We only make a handful of new investments each year.
We are flexible in the size of equity checks we write. Our initial investments in companies have been as low as $10 million, and as high as $800 million. We invest across the full spectrum of lifecycle, from early stage growth companies to turnarounds.
Given the size of our capital under management and the handful of investments we make each year, each new investment needs to have the potential to move the needle on the full portfolio.
We make both majority and minority investments, as long as we are aligned with the owner-managers and the investment meets our absolute value creation threshold. We are comfortable buying both primary and secondary shares to clean up the cap table or help the founders take some chips off the table as they commit to a long-term value creation strategy.
We work with our owner-managers to come up with the right capital structure to realize our joint vision and make sure we are fully aligned. We do not load up companies with a heavy debt burden to boost our returns and hope for the best. In fact, we often make investments that are 100% equity.
We are typically the only or the leading institutional investor partnering with the owner-managers. While we work well with seed and Series A investors who have brought businesses to the next level, we do not participate in broadly syndicated rounds. We make a single bet in a given space and commit ourselves to our partners’ success, rather than take a portfolio approach to a given theme or space.
There’s no single formula for the type of opportunity that gets us excited, but they often have the following ingredients:
- Owner-managers with a shared vision and passion about the business
- A business with a real competitive advantage, or a vision for how it can be built
- Strategy based on driving sustained business performance, not on financial engineering
- Current owners who care about who they pass the business on to
- Revenues of over $5 million—though if the target business model is clear, we are comfortable with companies that have not yet turned profitable
We have invested in companies across a wide range of industries including consumer products and services, food, specialty retail, software, biotech, medical devices and products, and professional services. Although most of our investments have been in the US and Europe, we have invested in companies across the world, leveraging our flexible structure and the international background of our team.
See the Case Studies section of the website for examples of what we’ve accomplished with our partners.