An interview with Capital & Corporate on why the model has moved from curiosity to established allocation, and what it offers investors and searchers respectively.
In this interview conducted by Capital & Corporate we discuss the advantages search funds offer to both investors and searchers, and why the model is becoming an established asset class.
Historically, investor returns have exceeded 30%, outperforming comparable private equity classes. The sector is growing significantly, allowing investors to build diversified portfolios and allocate meaningful amounts of capital. Search funds also allow investors such as Arada Capital Partners to play a more active role in the companies they back, applying their own experience and expertise rather than acting purely as a source of capital.
The model offers three clear advantages. It allows an entrepreneur to own, manage and grow an established company rather than build one from nothing. It provides the guidance and support of experienced investors through both the search and the operating phase. And it offers the opportunity to earn a significant share of the equity while keeping objectives aligned with those of the investors.