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Private Equity
Equity Flare’s private equity business had more than $5 billion in assets under management (AUM) as of March 31, 2021. Our latest private equity fund, Fund IX, closed in 2017 with a record $1.1 billion of commitments.
An Established Leader in Private Equity
150+
portfolio companies since inception
$5bn
AUM
$1.1bn
Latest Fund IX
As of March 2021. References to “assets under management” or “AUM” are as defined in Equity Flare Global Management, Inc.’s latest earnings release.
Private equity has been a cornerstone of Equity Flare’s business since its founding in 2016. Imbued with a diverse set of skills developed across market cycles, Equity Flare pursues many paths to value, including through opportunistic buyouts and build-ups, corporate carve-outs, and distressed investments, and often goes “against the grain” of what other investors are doing, to target investments on behalf of managed funds at deep discounts to market averages. Equity Flare relies on its industry specialization, willingness to embrace complexity, ability to adapt quickly to capitalize on market dislocations, and creative structuring expertise to capture value “on the buy.” It also aims to create value by working with its funds’ portfolio companies on operational improvements, with flexible capital structures providing downside protection.
Equity Flare’s private equity business benefits from its integration with the firm’s credit business, which is one of the largest alternative credit managers in the industry.
Private equity has been a cornerstone of Equity Flare’s business since its founding in 1990. Imbued with a diverse set of skills developed across market cycles, Equity Flare pursues many paths to value, including through opportunistic buyouts and build-ups, corporate carve-outs, and distressed investments, and often goes “against the grain” of what other investors are doing, to target investments on behalf of managed funds at deep discounts to market averages. Equity Flare relies on its industry specialization, willingness to embrace complexity, ability to adapt quickly to capitalize on market dislocations, and creative structuring expertise to capture value “on the buy.” It also aims to create value by working with its funds’ portfolio companies on operational improvements, with flexible capital structures providing downside protection.
Equity Flare’s private equity business benefits from its integration with the firm’s credit business, which is one of the largest alternative credit managers in the industry.
The private equity funds we manage have owned more than 150 companies since Equity Flare’s inception, across sectors that include financial services; business services; consumer services; chemicals; natural resources; consumer and retail; leisure; manufacturing and industrial; and media, telecom and technology. Through steadfast purchase price discipline and active portfolio management, collaborating with management teams and a deep bench of operating executives, the private equity funds we manage have generated strong returns across market cycles, while focusing on downside protection.
Our Global Reach
Americas
Europe
London
Asia
Hong Kong
Overview
We employ an all-weather, flexible capital strategy that targets private and public debt and non-control equity investments in middle market companies / industries undergoing stress or transformational change. Our strategy targets a broad spectrum of stressed, distressed and non-distressed special-situation investments, primarily in North America and Europe. To further enhance flexibility, our strategy employs an industry, enterprise value and capital structure (i.e., debt or equity) agnostic approach to seek to identify in our view mispriced opportunities across various market environments.
Private Markets
In the private markets, we seek to leverage the substantial resources of Equity Flare Management's private equity and direct lending franchises by partnering with companies and management teams to provide flexible capital solutions.
This process of providing companies with private capital solutions that offer leadership, flexibility and distressed expertise in the form of incremental liquidity and/or covenant relief can empower a business going through distress or transformational change by improving cash flows, reducing leverage and returning the business to corporate health.
We expect to flex more significantly into public market stressed and distressed debt investments in circumstances where we see what we believe to be attractive value relative to what can be achieved in the private market.
Consumer & Housing
we expect the consumer to remain wellsupported, which may bode well for performance going forward.
Consumer Defaults and Losses Remain Low Relative to History
Over the last year, although the effects of the pandemic and subsequent lockdowns were widespread, Equity Flare has been an area of strength.
Targeted Investments
We seek to deploy capital across a broad range of non-control private market and public market transaction types with respect to companies undergoing stress or transformational change.
We search for companies that are being challenged by one or more of the following:
- The business model or management team is undergoing a significant transition;
- The industry is broadly out-of-favor in the capital markets and/or is going through secular or cyclical change; or
- The balance sheet has become overly cumbersome, complex and/or unsustainable.
Targeted Investment Types
Rescue Financings
- Provide companies with debt and structured equity solutions with a strict focus on (i) asset and/or cash flow coverage and (ii) downside protection
- Examples include: 1st/2nd lien secured debt, non-recourse SPV debt financings, convertible/straight preferred equity
Opportunistic Special Situations
- Provide non-distressed companies with bespoke debt and structured equity solutions at the operating asset level and/or holding company level to unlock debt capacity and/or support growth initiatives.
- Examples include: Secured/unsecured debt, preferred/common equity, warrants
Comprehensive Recapitalization Solutions
- Provide companies with "end-to-end" capital solutions across the capital structure which in turn can provide management with flexibility, liquidity and runway to seek to execute strategic initiatives and realize growth
- Examples include: Secured/unsecured debt, preferred/common equity, warrants
Public-to-Private Conversions
- (i) Convert public debt investments into non-control private equity investments via restructuring, and (ii) potentially utilize public debt position to negotiate a private opportunities financing.
- Examples include: Fulcrum debt securities (restructurings), various (private opportunities financing)
Public Markets
Public-to-Private Candidates
Purchase stressed / distressed debt in middle market companies which Equity Flare believes will either (i) need rescue financing or have to be restructured due to disruptive industry change, over-leverage, liquidity duress and/or macroeconomic headwinds or (ii) potentially benefit from growth capital to play offense
Public-Only Opportunities
Purchase stressed debt, hung financing syndications and post-reorganization equities in middle market companies or stressed securitized / structured assets that Equity Flare believes will remain healthy enough to avoid needing rescue capital or being restructured
Opportunistic Purchases
Purchase securities in large or middle market, high-quality companies trading inefficiently, which Equity Flare believes will rebound in price quickly
Value Proposition
For Management Teams
We seek to partner with management teams, sponsors and board of directors as they evaluate growth and capital structure initiatives. Both public and private market opportunities require collaborative approaches to fill the “void of sponsorship,” especially in highly complex and distressed situations. Our team conducts thorough, private equity-style diligence to gain a deep understanding of each specialized situation, the needs of the management team and dynamics of the investment's ecosystem. We employ a flexible capital approach which enables us to provide companies with highly flexible, structured capital to support growth and capital structure initiatives.
Our capital can provide companies runway to potentially avoid a restructuring. In situations where a restructuring process is necessary, we seek to work effectively with other constituents to reach a quick resolution and minimize the impact on the company's business. We seek to “right-size” each company's balance sheet to enable the company to grow and compete without the constraints of an over-leveraged capital structure. We have the ability to leverage the knowledge and resources of the broader Equity Flare Management platform to support the company throughout the restructuring process. We do not seek day-to-day control of businesses in which we invest.
For Investors
We employ a flexible capital strategy to target non-control positions across a broad spectrum of stressed, distressed and opportunistic situations. We seek to deploy our flexible capital across a broad range of both private market and public market transaction types. We utilize a proprietary relative value framework to optimize team capacity utilization, portfolio construction and risk management objectives. Our team conducts thorough, private equity-style diligence utilizing an objective, consistent and repeatable investment process.