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Investment Lifecycle
Please note that all stages of the investment decision-making process are conducted in the strictest confidence.
Idea Origination
Our investment philosophy centers on our forming a reasonable judgment on the fundamentals of an industry and applying a disciplined strategy on how to invest in individual companies. The opportunity to invest in those companies comes to us by way of long-standing relationships we have within the industry verticals we cover as well as through colleagues and intermediaries at the leading investment banks, law firms and accountancies throughout the country. These relationships, coupled with our subject matter expertise, have allowed us to build a continuous source of non-auction deal flow. We also identify investment ideas internally and proactively approach management of companies where we believe opportunities may exist.
Investment Review
When reviewing investment ideas, whether presented to us in a business plan or developed organically, we diligence the market opportunity, business model economics, product or service differentiation, historical and projected financial statements, capital structure, management qualifications, marketing and sales strategy, and the expected amount and use of financing proceeds.
After the preliminary review, we meet with the company's management and learn more about the business and its prospects in greater detail. We focus on areas where operating performance can be enhanced, opportunistic acquisitions can be made and long term equity value created. When a decision is made to move forward, Stevenson works closely with the management team to assess and optimize the company’s business plan, address the requisite capital needs, retain key members of management and close the transaction.
Management Partnership
Establishing a close working relationship with the management team of a portfolio company is a critical element in our operating philosophy. As part of this approach, we strive to partner with the existing management and invite executive officers to co-invest in the transaction, giving senior management a significant stake in the company's growth and increase in value.
The depth of our experience as a group and scope of our strategic and financial contacts in the marketplace means that we have a direct and immediate appreciation of the challenges management faces in growing their business and that we are able to offer our portfolio companies an informed and pragmatic perspective on a wide range of business areas.
As a rule, however, we do not involve ourselves in the day-to-day operations of our portfolio companies; rather we seek to add value in a company by assisting management in identifying the essential strategic, operating, and financial priorities requisite to achieving our shared objectives. Stevenson accomplishes this goal by maintaining an active presence on the Board of Directors and on key subcommittees of the Board.
Realizing Value
Stevenson is a long term financial partner dedicated to maximizing value. We closely monitor the company’s performance and its relative peer status in the marketplace. The decision when and how best to exit an investment is critical and is made in conjunction with the management team of our portfolio company. The key is identifying the most effective way to optimize returns for all shareholders in realizing the value that has been built in the business.
When appropriate, we move to exit the company in order to return capital to our investors. We strive to exit at the optimum time for all concerned and through a mechanism that satisfies the strategic goals of the company and our mutual financial targets. These liquidity events typically occur through a private sale to a strategic or financial buyer or a recapitalization.
To discuss an investment opportunity or learn more about Stevenson Partners, please contact us. |
