Purpose
Purpose
Purpose
Our investments finance major corporate events rather than day-to-day business operations. The majority of our investments are to support corporate acquisitions, recapitalizations and management buyouts. The following describes common types of financings that we pursue.
Acquisition Financing – Supporting acquisitions is the most common form of investment we make, whether it is supporting a private equity fund, independent sponsor, family office or other investors. Acquisitions can be in the form of an investor group acquiring a company as a new platform or as a result of a merger of two companies.
Minority or Majority Recapitalization – A recapitalization can take many forms, but it is typically where there is a refinancing of debt and/or a partial change of ownership but not a full change of ownership. For example, a business owner may seek to sell a portion of his or her business to gain partial liquidity for personal planning and take on a value-added capital partner to help grow his or her company. A minority recapitalization typically consists of refinancing debt plus the owner selling a minority of his or her company to a new investor. A majority recapitalization is similar with the difference being the owner selling a majority of the company to a new investor rather than a minority ownership position.
Management Buyout – Management buyouts are typically where a management team that does not have a controlling ownership position seeks to acquire their company from the existing owners. It is similar to acquisition financing except in this case it is company managers who are the primary sponsor of a transaction and they oftentimes need a partner for both debt and equity (we can do both).
Growth Financing – In many cases, companies that are seeking to grow may need capital beyond what a bank is willing to provide. This can often be addressed with a mezzanine loan and, if required, an equity investment.
Shareholder Liquidity – In cases where a company has multiple owners, there is sometimes a need to redeem the ownership of one or more of the shareholders without the owners needing to sell the whole company. This is a common use for mezzanine debt and, in some cases, equity.
Generational Transfer of Ownership – Ownership of private companies is oftentimes passed down from generation to generation. In many cases, it is appropriate to finance such an ownership transfer with outside capital in order to provide value to the current generation of ownership while the successor generation takes over the reins for the next stage of the company’s development.
