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MSD
actively pursues investment opportunities in both public and private
companies. The Firm may invest in both U.S. and foreign securities, as
well as in both publicly-traded marketable securities and non-publicly
traded securities. In addition to investing in securities directly, MSD
will selectively invest in partnerships and other entities managed by
outside investment professionals.
Public Equities Group
The MSD Public Equities Group's primary investment mission is to utilize
our unique family capital base and resources in making long-term equity
investments in a limited number of outstanding companies. The group
employs a disciplined, research-intensive analytic process in its search
for businesses that possess sustainable long-term competitive advantages
and are managed by honest, astute and shareholder-driven people. The
foundation of the Group's philosophy is that businesses create wealth for
their owners through the long-term generation of net free cash flow.
Although the Group typically invests as a minority owner of
publicly-traded companies, we view ourselves as an investor in
businesses, not a trader of stocks.
We also look for opportunities to make larger strategic investments in
companies where we can add value as a committed partner of management. We
believe that our unique attributes as a shareholder enable management
teams to focus on managing for the long-term and not the next quarter.
Private Equity
Private equity is an integral part of the long-term investment strategy
of MSD Capital. We seek to deploy capital in outstanding businesses with
world-class management teams at attractive valuations. As distinct from
private equity funds, we provide long-term, permanent capital and are
able to invest without the pressures of fund raising. The business
knowledge and experience of our investment professionals, Mr. Dell and
our broad network in business and the financial sector allow us to
provide a level of added value that is unique in the investment business.
We greatly value our relationships in the investment process and seek to
develop solid, long-term partnerships with management teams, financial
sponsors and capital sources.
MSD Capital invests in established public and private companies through
privately-negotiated transactions, including:
·
Buyouts of private companies and divisions of public
or private companies;
·
Acquisitions of public companies through going
private transactions; and
·
Purchases of blocks of stock from public or private
companies seeking equity capital or persons/families/funds seeking
liquidity on existing investments.
Transaction examples include leveraged and
management buyouts, going private transactions, mezzanine debt and other
structured investments, PIPEs and growth equity
financings, platform acquisitions and roll-ups, and partnerships with
other financial sponsors.
Our broad investment mandate and flexible capital
base allows us to creatively structure and execute transactions. We can
participate at various levels within the capital structure and are
willing to make both growth and control investments across a variety of
industries. We have a streamlined investment process that enables rapid
decision-making and certainty of close. While we do not generally get
involved with day-to-day management of our portfolio companies, we
provide advice with regard to capital allocation and regularly monitor
the performance of our investments through communication with management
and analysis of operating and financial results.
While we maintain a generalist approach with regard
to industries and transaction structures, we generally seek to invest in
non-technology companies as a means to diversify our portfolio. MSD
Capital typically invests $50 million - $200 million per transaction;
however, we will consider larger or smaller sizes depending on the
particular investment profile.
MSD Capital seeks investments with the following
characteristics:
·
Solid business fundamentals including:
·
Recurring revenue, high margin businesses with
organic growth potential and favorable long-term prospects
·
Stable and predictable operating earnings and free
cash flow as evidenced by consistent operating history
·
A strong and sustainable market position based on
high barriers to entry
·
Attractive valuations and favorable transaction
structures:
·
Sensible valuation multiples with attractive free
cash flow yields
·
Conservative leverage ratios with emphasis on safety
of principal
·
Strong management teams
Real Estate Investments
The MSD Real Estate Group’s mission is to build a leading global real
estate portfolio focused on achieving superior returns through equity and
debt investments. The Group spans the spectrum of risk-adjusted
investments to include properties, portfolios, joint ventures and
operating companies. We believe that we distinguish ourselves from the
traditional opportunity fund models with our tenacious approach to
long-term investing that makes us a user-friendly co-investment vehicle for
our global real estate operating partners.
We seek investments with the following
characteristics:
- Core investments: Properties at unique
locations and with attractive valuations providing above average,
sustainable yields and favorable long-term prospects.
- Value-added
investments: Properties with upside potential through repositioning,
conversion or redevelopment, where we can add value with our
industry relationships along with a strong operating partner.
- Opportunistic
investments: Special situations where capital constraints or the
markets at large prevent an operating partner from leveraging the
full potential of an asset.
We have a team comprised of individuals
with diverse backgrounds in real estate finance, risk management, asset
management and strategy consulting. Our experience allows us to quickly
identify desirable investments and move rapidly to close. Our offices in
New York and Los Angeles ensure that we have national coverage and remain
easily accessible to our partners in Europe and Asia. Examples of target
acquisitions include luxury hotels, commercial and multi-family
properties, land development, mezzanine debt and other structured
investments and real estate-backed loan or property portfolios.
While we typically identify opportunities through
our proprietary network of relationships, we welcome inquiries for
investments over $25 million from operators with a demonstrable track
record. Inquiries should be sent to: realestate@msdcapital.com.
Special Opportunities Group
MSD Capital also engages in Special Opportunities Investing. The group
focuses on a variety of event-driven investment strategies including:
·
Distressed Debt Investing: the purchase of
bank debt, high yield bonds or trade claims of distressed companies;
·
Equity Restructurings: special situation
equity investments including liquidations, post-bankruptcy equities and
litigations claims;
·
Direct Investments: bridge loans,
mezzanine financings, and DIPs for asset-rich
companies in search of near-term liquidity; and
·
Merger Arbitrage
Partnership Investments
MSD's Partnership Investments group invests in a select number of
investment partnerships across a variety of investment disciplines and
asset classes, including hedge funds employing specific public equity and
fixed income strategies, private equity funds and real estate. We seek to
generate superior risk-adjusted and tax-efficient returns by
concentrating our investments with outstanding managers who partner with
the Firm to build economically aligned, long-term strategic
relationships.
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