Investment Strategy

Investment Philosophy:
Our approach in the lower middle market is highly focused on growth and utilizing a specific set of value levers and skills in partnership with talented management teams in achieving high performance targets.
  • Long-Term Orientation with Operator’s Focus: We approach private equity investing with an operator’s mindset, and believe that the best results come through effective ground-level execution, not financial engineering or excessive leverage.
  • Rewarding Outperformance: We believe all parties should have aligned interests and share in the success of our investments, so we provide our executives with attractive equity incentives and encourage existing owners and managers to rollover existing equity into our transactions.
  • Outside Deal Partners: We actively seek out and work with executives, independent sponsors, merchant bankers, and other minority deal partners.
We invest in fundamentally sound, growing companies that have high quality management teams and operate in sectors where our investment team has extensive experience. We require that companies have two important characteristics: Defensibility and Differentiation.
Defensibility:
  • Significant competitive advantages and recession resistant – business model has had sustained success in the face of market pressures
  • Focus on sustainability of pricing and gross margins
  • Examples of defensibility include recurring revenue streams and brands
  • Avoid investing in commodity-oriented businesses
Differentiation:
  • New or unique way of addressing existing market needs
  • Demonstrated customer demand for innovative offerings
  • Puts the company in a strategic position to capture market share
  • Company can generate meaningful revenue growth, yet “fly under the radar” because of its small size relative to competition

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