DURATION

SHORT

Short duration investments are primarily characterized by the ability to realize full liquidity in the investments within ~2 years. As a result, we focus on event-driven opportunities in the public markets where the “event” is expected to occur within our time frame as well as private debt and structured securities maturing within 2 years. We value certainty of return of principal and willingly exchange higher expected returns for downside protection. As a result of the short duration nature of the investments and the premium placed on return of principal, our return expectations are more comparable to niche debt investors than those typically required by equity investors.

Examples:

Summary

Transaction

Liquidating Publicly Traded Company

Acquired stock at a discount to expected liquidation value; substantial cash balance relative to purchase price and considerable net operating loss carry-forwards

Pool of "Pre-Prime" Consumer Loans

Participated alongside other private investors in a credit facility to a special purpose vehicle that owned a discrete pool of short-term consumer loans; protected structure and rapid principal repayment

Bonds in Bankrupt Casino Operator

Participated alongside pre-petition bond holders in DIP financing as well as high-coupon exit financing bonds issued at a discount; improving operating performance and clear path to refinancing

Short-Term Financing for Education Services Company

Provided flexible short-term debt solution to facilitate growth in exchange for rapid principal repayment and warrants in the company; funds used to capitalize on ramping growth opportunities

LONG

Long duration investments span a variety of structures and asset classes including private equity and mezzanine debt, structured finance and other special situations. Our flexibility allows us to provide financing in transactions that are often outside of the mandate of asset managers in traditional asset classes. We focus on opportunities where the underlying assets are cash-flow generative or have strong collateral support. In our typical transaction there is a quantifiable downside scenario, a clear path to return of our principal and an opportunity to realize outsized returns in residual or option value. Because of anticipated hold periods in excess of 2 years, our return expectations are consistent with those expected by equity investors.

Examples:

Summary

Transaction

Rapidly Growing Provider of Consumer Loan Software

Structured equity position with senior debt and warrants coupled with common stock; cash flow prior to debt maturity covers cost of equity investment

Liquidating Asset-Based Hedge Fund

Limited partnership interest in fund purchased at a discount to net asset value; fund in process of liquidating and distributing cash proceeds to investors from its oil & gas and other non-correlated assets

Recapitalized Regional Bank

Equity position alongside private investors and management team using the bank as a growth platform to take advantage of the opportunity to purchase discounted loans from less well-capitalized institutions

Aircraft Engine Securitization

Equity interest in a niche securitization acquired in the secondary market at a discount; equity entitled to preferred dividend stream as well as residual value

ASSET CLASSES

We invest in a broad selection of asset classes often filling gaps in the traditional financing and banking communities. Our typical investment is between $1 million and $15 million. We favor self-liquidating investments and opportunities where we have the ability to recapture principal rapidly while maintaining a participation in future value creation. In most circumstances we invest alongside a partner that shares our investing philosophy and assists us by playing an active role in managing the investment. As a partner, we distinguish ourselves by our ability to deconstruct complex situations, our quick decision making capabilities and our flexible capital pool.

Private Equity

PRIVATE
EQUITY
STRUCTURED
FINANCE
CAPITAL
MARKETS
REAL
ESTATE
SPECIAL
SITUATIONS
FUNDLESS
SPONSORS

We are particularly attracted to opportunities that allow us to partner with like-minded investors through initial transactions that can be grown into scalable businesses. To that end we actively seek out partners with expertise in particular investment strategies with whom we can build out larger relationships over time. Frequently we play a formative role in the businesses of our partners by providing capital for their initial transactions as independent entities. We have supported a number of emerging fund managers in this way.

Fund Strategy

Fund Description

LBCW Role

Private Equity and Junior Capital

Middle market private equity / junior capital fund focused on companies undergoing a range of special situations

Provided debt and equity capital for the fund's first transaction through a dedicated partnership vehicle that invested directly in a leading software company for the consumer lending industry

Venture Capital

Healthcare focused venture capital firm founded by one of the founding members of one of the most established healthcare venture capital investors

Co-invested with the firm in an emerging provider of wound treatment products; represented one of the firm's initial investments

Real Estate

Real estate investment and operating firm focused on opportunistic acquisitions in major eastern United States markets

Serving as one of the firm's primary equity sources; providing committed financing for all of the firm's transactions

Private Equity

Middle market private equity fund founded by a group of successful entrepreneurs

Invested in the fund's first transaction, an acquisition of a utility pole manufacturer, through a side-car investment vehicle

Structured Finance

Fund focused on heavy equipment structured finance transactions founded by team from leading investment bank

Co-invested with the fund in one of its initial transactions - the acquisition of an equity interest in an aircraft engine securitization

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