Our funds invest in lower middle market companies with operational or capital structure complexity that causes many investors to shy away. These situations are often undervalued in the marketplace and present highly attractive investment opportunities.
The catalyst for the investment opportunity can be financial or operational distress, a complicated capital structure involving difficult-to-value securities or a dysfunctional ownership group.
Our goal in each situation is to establish the downside protection of a debt investment while creating the potential for an equity-type return.
We view management as critical to the success of each of our investments. When we have a successful outcome, we seek to have management win alongside us.
The recent economic crisis and the resulting changes to the financial industry have significantly restricted the capital that is available to lower middle market companies that have complexity. We believe this dynamic will continue to create numerous opportunities for our strategy.