For each investment, clear sources of strategic, operational or financial improvement need to be identified. The business plan must underpin the entry price and justify return expectations.
Target companies need to have or be able to attract high quality management. Retention and motivation of senior managers is achieved by means of customised incentive packages.
A path to exit has to be clearly identifiable.
Suitable targets may be acquired in a leveraged buy-out or buy-in transaction. The level of gearing will always be determined conservatively.
Expansion capital opportunities are considered if supported by a very strong business rationale, clearly identifiable growth opportunities and a highly discernible path to exit.
Turnaround investments will only be considered in exceptional cases.
Majority investments are preferred.
A minority position may be considered in cases where the majority partner can articulate a compelling value creation rationale and a clear way-out strategy.