We believe that the lower middle market, specifically companies with EBITDA from $2M to $20M, presents the best opportunity for us to create long-term value and increase risk-adjusted returns.
The lower-middle market segment is vast, comprising more than 175,000 businesses in the U.S. Valedor makes control and non-control investments in businesses where we can take active roles alongside management to create meaningful value.
COMMON VALUE CREATION STRATEGIES
Develop financial and operational key performance indicators to ensure alignment between owners, managers, and employees
Develop cost containment strategies to ensure advantaged cost structure relative to competition and long-term business viability
Deploy technology and data analytics to increase productivity and drive more informed decisions
Identify and streamline critical internal processes to increase productivity and reduce costs
Develop and measure targeted organic growth activities
Use targeted acquisition roll-up strategy and/or de novo expansion when possible
We believe a deliberate approach (preferably in non-competitive processes) to due diligence enables us to differentiate ourselves, reduces risks of a broken deal later in the process, and ensures better alignment with sellers and management prior to investment.
We seek to invest in ways which minimize downside risk through structures or enhanced due diligence in certain areas. While we seek to invest at an attractive basis, we will pay for quality if our investment thesis supports it.
We seek to use our network to identify and cultivate dynamic, trustworthy, and adaptable leaders, and reward them for exceptional performance, creating strong alignment with us.
Systematic Growth Strategy.
We develop and seek to implement strategies for growth through tools that have been successful for us in the past, without being afraid to experiment when needed. We also track key performance indicators and use data analytics to identify opportunities for improvement.
We will seek to sell when we believe we can realize a value that exceeds the return we can achieve by holding an investment longer, not because of a fund that is winding down or to demonstrate a “win” for our next fund-raising effort.