Strategic/Investment Approach & Predecessor
Fund Performance
Strategic Approach
The firm draws upon its internal and industry professionals to add value in actively
managing its investments including capitalizing on its expertise, analytical
capabilities, maximizing strategic alternatives and focusing on the dynamics of the
business. We believe that severe dislocation in the capital markets has created a
historic opportunity in distressed for control investments, especially in the lower
middle market, where we see limited competition in this niche. Likewise, our
ability to access turnaround operators (or step in as operators) is the key
differentiation to funds of this size and focus.

Predecessor Fund (Balmoral Fund I) Performance
The founders’ predecessor fund, Balmoral Fund I, had $36.2 million of
commitments in April 2005. The fund made four investments, with one exit in
September 2008 (7.4x) and one in July 2011 (4.9x). The remaining two
investments are still controlled by Balmoral Fund I and have returned 2.0x and 0.1x.

Investment Approach – Buying Right and Creating
Additional Value
  • Targeting deep value, companies in transition, Special Situation/Impaired
    Value
  • Direct Sourcing- Accessing wide network of deal sources, avoid auctions
  • Scale and Profitability of Target Investments
  • Qualitative Investment Criteria
  • Creating Value: Assisting in and monitoring the turnaround of target
    companies even before deploying capital
  • Defensible Market Position and Leadership Potential
  • Committed & Aligned Management Team
  • Multiple Exit Strategies- Sale to strategic or financial buyer, MBO, IPO
  • Result: ~4.5x returns expected from Fund I. Price paid for the portfolio = 2.0x
    actual first-year EBITDA