FAQs

Frequently Asked Questions of the Better Capital Funds

• How are you different from other investors?

  • There are three overriding ingredients;
    integrity (honesty and no "chipping"),
    speed (of response, transaction and deliverability) and
    a bearish attitude to leverage (that's often what caused the problem!)

• What is the attitude towards debt within the investments?

  • There is no bank acquisition finance within the portfolio at present.
  • The management teams are focused on running the businesses and not reporting to lenders - this shouldn’t be, but is, a novel phenomenon!

• What makes a successful turnaround deal?

  • A clear strategy, the ability to make difficult decisions, appropriate or (more often) no gearing, simplicity of documentation and alignment of goals.
  • Definable and controllable steps to increased profitability.

• Do you back incumbent management teams or bring people in?

  • The Funds back, and appropriately equity incentivises, high-quality teams; whether they are from within the business or lateral hires.

• What sectors are preferred?

  • The Funds invest as situation specialists and not as sector specialists.
  • They draw off deep levels of experience and apply operational turnaround expertise across a variety of industries.

• What is a typical hold period?

  • Typically, the highest prices are achieved on exit when the turnaround can be proven (often through the provision of audited accounts) to have been successful.
  • As such, a 3-5 year period of ownership is most likely.

• Are debt instruments traded?

  • The Funds can invest in debt if this provides a route to ultimate economic ownership.
  • It is not a debt trader.

• What’s the ‘house’ operational management style?

  • Sit back and applaud when deserved. Supportive when needed. Hands on when required.

• What due diligence is needed in advance of investing?

  • There simply needs to be confidence (based on fact) in the ability of the underlying business to generate profits, post operational restructure.
  • Due diligence is largely focussed around verification and validation in order to eliminate the risk of fraud and a strong understanding of the existing and prospective profit margins.