EC. Pohl & Co. Private Equity Limited was established to invest our own funds together with those of our clients in profitable privately owned Australian companies. We provide funding for management buy-outs (MBO), management buy-ins (MBI) and more generally looking to invest in businesses with an enterprise value of between $2m and $20m.
Our investment strategy is centred on backing entrepreneurs who have demonstrated their ability to build a successful business. We invest in businesses that have reached an inflection point in their growth; it may be the owners needing to fund organic and/or seeking to implement acquisitive growth opportunities, or a desire to sell down part of their equity. In every case, we will invest with a view to assisting the founders and managers to execute a growth strategy over a 3-5 year period.
We are sector agnostic but focus on businesses with attributes consistent with our philosophy. The target business must have recurring and maintainable profits and this prerequisite rules out project based businesses like property development and mining exploration. We are active investors and will always seek board representation and the ability to select key executives. Typically, we provide corporate finance and governance expertise that has not been in the historical skill set of our target businesses.
Through our experience investing in small and medium-sized companies, we believe that individuals will be ideal investment opportunities if they fit the following profile:
- The business was established and built from humble origins.
- The owners of the businesses are ready to consider selling all or part of their business and are willing to engage with a third party.
- They have accumulated wealth and assets but the majority of their net wealth is invested in their business.
- They have a thorough knowledge of actual and potential competitors, suppliers and customers and have a plan to grow the business, but are reluctant to fund the growth through 1) additional borrowings; 2) ceding control to external investors; or 3) increasing their personal exposure to the business.
We do place emphasis on some accounting based measures aligned with our investment philosophy to help focus our efforts. We’re looking to engage with businesses that have earnings of between $0.5 million and $5 million per annum. Margins should be stable, and there needs to be a clearly identifiable competitive advantage. The firm should also be able to pursue growth opportunities throughout the life of our investment.
We receive a number of requests to assess investment opportunities throughout the year and only a few of those meet our investment criteria. However,
- We will attempt to provide feedback on investments promptly, regardless of the decision to invest or pass.
- Should we follow through with an investment, we will ensure that we close the transactions as quickly as possible.
- In order to succeed we need to ensure that all of the interests in a transaction are aligned.
- We commit to providing all the resources, financial and other, that enable management to execute the strategy set for the business.
- We will always be forthright with our partners and provide deliverables to owners on a timely basis so that there are no surprises; and
- We support the view that management should receive ownership and believe that there should be significant financial incentives for excellent performance.
We invest in privately owned businesses that
have reached an inflection point in their growth.
In every case, we will invest with a view to assisting the founders and managers to execute a growth
strategy over a 3-5 year period.