Strategy

 

Blum Capital has consistently pursued its corporate investing strategy since the firm’s INCEPTION in 1975.

For over forty years, we have applied our investment strategy focusing on small- and mid-capitalization companies to source strategic block and control investments and subsequently work with the managements and boards of directors to increase shareholder value.  Over time, we have invested more than $10 billion of equity capital and demonstrated a proven ability to play a constructive, active role in unlocking value from our portfolio companies through the implementation of financial, operational, and governance initiatives.

We are most frequently a minority investor and are often one of the first sources of institutional capital in the companies in which we invest.  We look for passionate leadership teams and particularly like to invest in entrepreneur owned and led businesses in industries offering a high potential return on invested capital.  Blum Capital has developed a reputation for being a desirable partner with our portfolio companies.  The firm has built an extensive network of CEOs and board members who can attest to our ability to work with managements and boards of directors to achieve positive outcomes in a constructive fashion.
 

 

The core tenets of our investment strategy have remained constant throughout the firm’s history while still allowing us to take advantage of different opportunities in diverse market environments.  This flexibility has resulted in portfolios that have varied in emphasis over time.  However, the key principles of our investment philosophy have always been consistently applied as follows:

 

High Quality of Business

We believe in the importance of investing in high quality businesses with defensible franchises, attractive long-term growth potential and attractive returns on invested capital because high quality businesses generate greater compounding of wealth over time.

Opportunity for Value-add

Our goal is to be the largest or among the largest shareholders and to build a partnership with management and the board of directors allowing us to initiate and often  implement value-added strategies that enhance shareholder returns.  Our proposals include a broad range of financial, operational, and governance initiatives with the objective of maximizing equity value over time.

Small/Mid-cap Focus

Our primary focus is the small- and mid-capitalization sectors of the market, which we believe tend to offer more attractively valued investment opportunities.  In addition, smaller and mid-sized companies afford greater potential for influence and value-add on our part than larger companies.

Long-term Horizon

We are long-term investors.  Our long-term perspective allows us to take a partnership approach with management teams whose time horizons are similar to our own.  The average holding period for private equity investments made by our Strategic Funds has been five years.

Concentrated Portfolio

Our strategy is to limit investments to a relatively small number of our best opportunities and to focus our efforts on adding value to those portfolio companies.  Combined with our highly selective investment criteria, intensive research and ability to implement value-creating initiatives, we believe concentration is critical in achieving our goal of superior returns.
 

Rigorous Research Process

Consistent with our private equity approach, we apply a highly rigorous process in researching potential investments.  We believe our concentrated portfolio strategy requires this level of private equity due diligence in order to minimize investment risk.