Private Equity

Braxton Private Equity Unit

Braxton Private Equity, a Braxton Capital Unit, is a private equity investor with a portfolio currently composed primarily of equity investments in small and middle market companies. Braxton has both venture capital and private equity firm arms. They are committed to empowering entrepreneurs to build innovative and industry leading businesses. Braxton has invested in a large number of companies since inception. We focus on investments in the Enterprise Services, Internet and Professional Services sectors. Within our targeted sectors, we invest across multiple stages, from early startup to expansion stage investment to growth capital and buyouts

We seek to achieve current income and capital gains from our investment portfolio by following guidelines that emphasize preservation of capital, appropriate returns relative to risk, current cash flow, and the opportunity for capital gains.

The common elements among these investments are that they are generally long-term in nature and generate strong current cash returns. Braxton targets companies in less cyclical industries that can produce significant free cash flow and high returns on invested capital. When we make an investment, we enter into a privately negotiated arrangement where our ultimate exit from that investment may be five to ten years in the future.

Portfolio Development

A good private equity investor works to make its portfolio companies better so that returns are thereby enhanced. Middle market companies can often benefit from the managerial assistance we offer and our assistance does not stop at the boardroom. We work with portfolio company management teams and offer assistance with corporate finance matters, mergers and acquisitions, executive recruitment and human resources, marketing, and general business guidance. This takes significant time, talent, and resources, but we believe that it is this combination of capital and resources that makes us a unique investor and a good, long-term business partner.

Braxton invests in companies in partnership with superior management and where it believes its experience, relationships and capital can create long-term value. We aim to create superior returns for our investors by making substantial investments in the best-led and best-positioned companies we can find. Our Debt Recovery Advisors’ investment strategy is focused on debt instruments of financially troubled companies. Its investment professionals use a research-oriented approach to identify and select investments primarily in fixed income securities and other indebtedness across all industry groups globally.

Braxton Private Equity has been a player in the private equity market for more many years. During this time we have seen in the private equity industry tremendous growth, enormous change, and an ever shifting set of market conditions.

During bull phases of the cycle, especially, capital providers are prone to the fantasy that they can create wealth all by themselves, by targeting the right sector, by having the right strategy, or by “adding value” to the company operationally.

Valuation

Our Board of Directors determines the fair value of our portfolio investments on a quarterly basis. Our investments generally do not trade in a liquid market, and, in fact, in the life of any one investment, there are only two days when we know with certainty the exact value of our investment – the day we fund the investment and the day we exit the investment. Every quarter, during the intervening years until we exit the investment, we make a good faith judgment of the portfolio company’s worth, and, therefore, our investment’s fair value. This is a subjective determination, because there is no single standard for determining fair value in good faith.

To meet the challenge that fair value accounting imposes, we have adhered to a consistent and rigorous process. Determining the fair value of a single investment requires the work of several professionals to assess the portfolio company’s financial condition. In addition, we may review the value of comparable companies in its industry, evaluate comparable merger and acquisition transactions, and consider the opinions of our co-investors in a deal. To assist us in determining fair value, we have engaged third-party valuation consultants who work with our valuation and private finance investment professionals on a quarterly basis.

Deal Structure
Our private finance portfolio is primarily composed of debt and equity securities. Our capital is generally used to fund growth, acquisitions, buyouts, recapitalizations, note purchases, and other types of financings.

We focus on debt and buyout investments where we can select investments that are structured to generate current returns as well as potential future capital gains. It is our preference to structure our investments with a focus on current recurring interest and other portfolio income. Historically, our portfolio has generated solid net gains as well.