Direct investments are transactions wherein we make a debt or equity investment in either a business or asset that is generating a healthy level of free cash flow. We seek both high current returns and long-term capital appreciation by focusing on inefficiently financed and poorly managed situations. We look for businesses wherein value can be unlocked via a recapitalization and management expertise.

We target transactions below US$25 million, where there are literally thousands of opportunities and minimal professional competition. Our approach entails either identifying and working alongside existing management or whenever possible, taking complete operational control. Risk is mitigated by conducting thorough due diligence and investing at low multiples or at discounts to replacement value. Corporate governance is often revamped and deals are monitored daily to stay ahead of problems.