We Like Business models that are characterized by:
- Recurring revenue: monthly charges for products and services tied to long-term contracts
- Leverage-able: the ability to control the routes to market and create additional products and services.
- Highly scalable: large and growing transaction volumes leading to increased operating margins
- Embedded infrastructure: products, services or systems that once installed, are difficult to replace, representing a significant barrier of entry for potential competitors
We will invest in businesses that are in trouble, with debt problems, and poor liquidity, if the underlying business model is good and EBITDA [Earnings, before interest, tax, depreciation, and amortization] potential exists. The basic fundamentals may have been impacted by a large debtor not paying for example, if the potential exists to restructure the business, to produce sustainable and a growing EBITDA then we will invest.
We invest with management