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Our Approach

Disciplined investors with a consistent focus on the middle market, balancing strong potential investment returns with carefully controlled risk

Focus

Charlesbank has a record of making successful investments in the middle market while carefully controlling risk. Investing across a broad range of industries and transaction types, we have gained considerable experience in this sector and believe it offers the most opportunities to exploit inefficiencies and discover hidden value.

Preservation of capital has always been a key objective. We seek to achieve it through:

  • Rigorous due diligence
  • Focus on the safety afforded by strong free cash flow yields
  • Thoughtful capital structuring
  • Engaging skilled management teams

Generalists

Breadth = Strength

Generalists by design, with deep experience in a range of industries

Criteria

We typically invest in companies with valuations up to $1.5 billion. We target businesses with:

  • High cash flow conversion
  • Strong prospects for profit growth
  • Durable competitive advantages
  • Proven operating management
  • Under-appreciated sources of value

Typical investment candidates include:

  • Transactions involving substantial complexity
  • Family-owned companies looking to accelerate profitability in connection with ownership change
  • Non-core corporate divisions of public companies lacking strong institutional-investor followings
  • Small- and mid-cap public companies seeking flexible and structured investment partners
  • Opportunistic investments in credit tranches with strong downside protection and potential for attractive risk-adjusted returns

Criteria At A Glance

proven
team

of operating executives

$150 million –
$1.5 billion

typical tev

strong
cash flow

and expectation of profit growth

Partnering With Management

While we entrust daily operations to management, our portfolio is structured to allow us time to make meaningful contributions with each company toward our agreed-upon objectives. Typically, we work closely with senior management on such issues as:

  • Strategic planning
  • Accretive follow-on acquisitions
  • Organizational development
  • Financial policy
  • Exit planning and execution

All portfolio company senior executives take part in co-investment and incentive equity programs to align the interests of our management partners with those of our funds. This way, the hard work required to grow the business becomes a shared effort with a shared reward.

Charlesbank seeks out businesses in transition, where challenges and complexities might deter other investors.

Creating Value

Charlesbank seeks out businesses in transition, where challenges and complexities might deter other investors. Often, we are drawn to contrarian investment ideas, such as industries where pervasive dislocation creates the opportunity to invest at low points. Our rigorous analytical backgrounds and deep experience are critical to our diligence, helping us to develop key insights and identify solutions to problems that can obscure a business’s true value.

As long-term investors, we look to build value through avenues such as:

  • Accretive acquisition programs
  • Operational or financial improvements
  • Organizational development
  • Geographic growth
  • Product-line expansion
  • Increased brand awareness

Our involvement in an investment ideally lasts five or fewer years. We strive to time and structure exits to reflect the interests and investment objectives of our funds and management partners. Circumstances for an exit might include:

  • Emergence of a strategic or financial acquirer
  • Success in achieving our joint strategic or development objectives
  • Availability of less-expensive capital to our management partners