“A Search Fund is an entrepreneurial path undertaken by one or two individuals, called ‘Principals’, who form an investment vehicle with a small group of aligned investors, some of whom become mentors, in order to search for, acquire, and lead a privately held company for the medium to long term, typically six to ten years.”— Stanford GSB Search Fund Study
Investment Model
Spanning more than 30 years, the investment model OxMar Partners is deploying has consistently surpassed typical returns from private equity and venture capital, averaging double the standard yields. Additionally, this model has realized an impressive average internal rate of return exceeding 30%, coupled with an average return on invested capital that is fivefold.
Stage - 1
Raise Initial Capital
In a search fund, the money is raised in two stages: (1) to fund the search, and (2) to fund the acquisition. The search capital is used to cover a modest salary and deal-related expenses over a two-year period while the entrepreneur searches full-time for an acquisition.
Stage - 2
Search For & Acquire Company
Perform targeted and opportunistic concentrated search to generate deals that meet the acquisition criteria. The funds for the acquisition can come from a combination of sources: existing investors, seller debt, traditional loans, and equity from new investors.
Stage - 3
Operation & Value Creation
The Principal assumes the role of President and / or CEO of the acquired company. The Principal will also recruit a Board of Directors for the acquired business, consisting of three to five investors or industry leaders.
Stage - 4
Exit
Create liquidity for investors through: - Sale of the company to a strategic buyer - Stock repurchased by the company - Stock purchased by new or current shareholders - Recapitalization of debt structure and dividend payout- Initial public offering
Tested Investment Vehicle
Search funds globally
With positive returns
Countries tested