Azalea Capital seeks to identify and lead direct equity investments in companies that meet the majority of our investment criteria.
The key steps to executing this strategy are to:
Invest in lower middle-market businesses
Operating companies are what we and our investors know. The lower middle-market private equity sector is underserved, and presents more of a value opportunity than the higher end of the market that is highly sought, by both larger strategic and financial investors. The Southeastern U.S. is our geographic focus as it is a well-diversified region of the country that we know extensively and can readily access.
Growing companies with established revenues and cash flows
We invest in businesses with a successful history of operations that offer established products or services. The company should have a defensible market position where there is a low risk of technological obsolescence.
Partner with management
We are actively involved from the Board level in each investment we make and provide strategic operating and financial guidance. We regularly review operating and financial performance with management, however, we do not seek to operate our portfolio companies on a day-to-day basis. We believe that can best be accomplished by a seasoned, talented, and committed management team that is financially incented to build shareholder wealth in the business.
Flexible approach in structuring our investments
Each investment opportunity requires a unique strategy for the capital needs of the business and its ownership. Therefore, we maintain a flexible approach to structuring transactions. In addition to investing equity in the business, we typically source senior and mezzanine capital from our network of relationships to prudently capitalize each of our portfolio companies. We structure the balance sheet to allow the Company's management team to focus on operating the business for long-term value creation.