Phoenix Strategy - Investment Approach

Phoenix understands that no two businesses are the same, nor are any two transactions.

Investment Approach

Phoenix understands that no two businesses are the same, nor are any two transactions. We are open to a range of investment types, including full acquisitions, partial acquisitions, recapitalizations and growth capital investments. We evaluate the merits of each potential investment on its own basis, but we have a strong preference for opportunities characterized by the following attributes.

Opportunity to add value

We believe in making investments where we can bring more than capital to the table. We derive personal satisfaction from helping management teams achieve their goals, and we believe that we are most likely to have successful outcomes when we can add true value through relevant know-how, networks, and/or other resources. For sellers of businesses, we aim to help maintain and build, not just their wealth, but their legacy.

Attractive growth potential

We seek to invest in businesses that have the potential for very meaningful growth. They may or may not already be on the rapid growth path, but they have a position in a key market segment that offers the clear potential for significant upside. We generally view businesses in large and growing markets as having greater long term potential, but we have experience expanding businesses from one market segment to another quite successfully.

Industries we (can) understand

We have direct experience and/or relevant knowledge and networks that lead us to favor certain industry types, including software, education, human capital, professional services, consumer services / multi-unit, manufacturing, and real estate/hospitality. We will readily admit when we feel we know little about an industry and have little to offer (e.g. consumer packaged goods, biotech, retail, restaurant).

Stage / Transformation potential

We are focused on growth-stage and mature businesses where there is a clear product-market fit. For more mature businesses, which may be on a slower growth trajectory, we look for opportunities to transform their potential, by introducing new resources, such as talent, technology or partners. We do not make venture or seed-stage investments, but current cash flow generation may or may not be a key determinant for us - it is business dependent. We are also not seeking to acquire truly distressed businesses.

Meaningful size

We define our target size range fairly broadly, but it is best described as small to middle market ($5m-$100m enterprise value). We look for businesses that have sufficient size and scale to offer a path toward market leadership (or at least to own a meaningful piece of a specific market) and enable us to invest in resources (e.g. people, equipment, product development, marketing) that can drive long term value. On the other hand, we like businesses that are small enough where we can help ‘move the needle’ by offering access to resources that were previously unattainable.

Management excellence & culture

Because we believe business success is overwhelmingly driven by management excellence, we will only invest in businesses that have exceptionally strong, well-aligned management upon our investment. This may include original founders, previously in-place operators, and commonly a new leader who is joining at the time of the investment. Along with management strength, management culture is extremely important to us. We seek collaborative partners who are driven by the passion to succeed and deliver value to their customers/clients, employees, investors and other direct stakeholders.