Direct Equity

One of Wraith’s investment strategies is to make direct equity investments into established privately owned growth companies.

Our Direct Equity approach can be summarised as follows:

• Investment Focus – invest in high quality businesses to support growth and shareholder transition.
• Company Size – target established businesses typically making between $1.5m-$20m EBITDA.
• Partnership Approach – partner with owners and management teams to support their strategic aspirations.
• Structure – not a Private Equity Fund – an aligned patient and flexible investor with funding provided on a deal by deal basis.
• Flexibility – each opportunity is tailored for the owners and management’s objectives with flexibility around investment horizon and shareholding levels.
• Alignment – critical that there is buy-in form management and shareholders around the strategic direction and future liquidity options.
• Investment Style – private and non-interfering. We leave management to ‘manage’ and provide focus and support on initiatives where we can add significant value.
• Value Add – look to leverage our M&A expertise, strategic insights, governance experience and extensive networks to support the company’s strategy.

The following are some of the features we look for:

• Strong market position or successful niche.
• Solid track record of profitability;
• Clear on achievable growth prospects;
• Mission critical offering or necessary service or product;
• Medium to high barrieres of entry;
• Robust management team that can be strengthened/augemented;
• Repeat or recurring revenues;
• Diversified earnings (by geography, customer, product / service offering);
• High EBITDA to cash conversion;
• Opportunity to ‘corporatise’, ability to remove owner dependence and install strategic clarity;
• Clear exit opportunities and understanding of what business needs to look like to maximise value;
• Ability to expand into other regions / countries.

Target company size:

• Minimum EBITDA of $1.5m or clear pathway via agreed acquisition(s) to take it above this level;
• EV likely to be $10m to $300m;
• Larger companies will require co-investing with institutional partners.