Alignment of interest with best-in-class managers is the cornerstone of the Kudu proposition.
Kudu seeks to ensure that the independence and autonomy that served as the foundation for past success is maintained. The following elements characterize the Kudu construct:
- Minority Stakes: Equity investments are structured to keep the majority of equity in the hands of firm principals
- Revenue Participation: Ensures alignment with management and minimizes the need for ongoing involvement in operations
- Aligned Investing: The Kudu approach pre-supposes quality managers who neither want nor need outside interference. No board seats are required, and firms are free to pursue their strategic initiatives
- Long-term Upside: The investment can be designed to end after a pre-determined term (typically, 10 to 15 years). This ensures all equity reverts to management. In addition, there are no dictated liquidity requirements, unlike some other financing structures. Some structures may be perpetual
- Minimizing Disruption: As this is not a control transaction, client consents are in most cases not required