Investment Strategy

Investment Strategy

Current Osceola Funds represent the continuation of an investment strategy that has been successfully employed by its principals over the last decade and in a vast number of structures. The Partnership seeks to make individual investments into lower middle market businesses ($1 - $5M in EBITDA), with an emphasis on business and financial services, as well as niche manufacturing and renewable technology. While our primary strategy is to take a controlling interest in the businesses that the Partnership invests in, we will also look to make some limited opportunistic minority investments alongside trusted partners. In either case, Osceola is focused exclusively on investing in businesses that have exhibited the capacity to generate strong cash flow across the entire life of the investment.

The principals of Osceola have led over 100 corporate finance transactions ($1B+ in capital) as well as served as the CEO, CFO, or President of over 15 successful organizations in multiple business segments. This extensive experience gives the team a distinct advantage in all facets of the transaction, including sourcing, executing, and ultimately exiting with an attractive return. Every acquisition opportunity is unique and dynamic. Some businesses merely require some additional guidance/insight to achieve their goals while others might require a gradual change in management over time, and still others may need direct hands-on leadership from the day of closing. The Osceola team has the capabilities and skills to create significant value in any one of these situations as they arise.

Over the long-term, Osceola believes the Micro Private Equity® market presents the greatest return opportunities for patient, disciplined, and experienced investors because of the following:

  • The number of companies in this market segment are more numerous than in larger segments of the market; hence, investors have more investment opportunities to choose from and are able to be more selective in their investments;

  • Acquisitions and internal growth initiatives for companies in this market segment tend to have a more dramatic impact on profits and job creation opportunities, thereby enabling investors to build value more quickly;

  • Investors often negotiate directly with the seller and are able to better acquaint themselves with a business, an owner, and the management because there is no investment banking process;

  • Valuation multiple arbitrage is significant between Micro Private Equity® businesses upon investment and larger businesses upon exit.

Additionally, our partnership is very aggressive in sourcing attractive investments in fragmented industries. Highly fragmented industries typically allow for smaller companies within the industry to be rolled-up into a larger entity. This type of strategy works very well with our investment criteria and naturally plays into our arbitrage model. Smaller companies within the industry are bought at lower multiples and present a perfect scenario for economies of scale to help drive enterprise value. With appropriate value-ads, organic growth, and all the prior variables mentioned, this type of investing can lead to very attractive returns.

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