Over the years, we have found that the investment opportunities that fit us best are situations where the owner/operator of the business would like to realize some personal liquidity from the time, effort, and resources they’ve invested over the years to grow their company, and they also want to start developing a longer term plan for the transition to the next chapter in their life, but they are not ready to completely exit the business. In many instances, they don’t have a management succession plan in place and often don’t even have a candidate in-house that can run the business upon this transition.
That’s where HCP comes in. In these situations, we will acquire majority ownership of the equity in the company (typically 51-80%) and the owner/operator will retain 20-40%. They will continue to run the business post-closing, but we will work together to develop and execute on a long term strategic growth plan and to expand the management team in order to help the owner/operator develop a clear and comfortable path for their eventual exit from the business. Our investment allows the owner/operator to continue to manage their legacy.
Because we are investing our own capital, we can be flexible on when we ultimately sell the business. This gives us the ability to truly invest in the long term growth of the business. It also allows the owner/operator to remain involved in the business they founded and built over a longer time frame. We call this approach Partnership from a Different Perspective.