Fundamental Strategies
Lewis Warburg’s fundamental strategies are based on a value approach, analyzing the expected cash flows and risks associated with each specific investment. LW prefers active or event driven strategies such as: Private Equity, Active Value, Merger Arbitrage, Distressed Securities and Project Development. This approach can be applied across multiple asset classes.
Private Equity Many fundamental strategies take the form of private equity investments. Acting alone or with strategic partners, Lewis Warburg will take a minority or controlling interests in a company with the goal of assisting management achieve their long term vision for the business. LW preference is to invest in private or small-cap public companies active in real estate, logistics, infrastructure or agribusiness. Active Value Lewis Warburg’s strong preference is to work with existing management. However, LW’s founder began his investment career pursuing active value situations, including successful proxy contests and provoking several white knight transactions. More recently, LW became active in a small-cap situation where management was conducting a massively dilutive capital raise to insiders and affiliates. LW efforts to thwart this theft were successful and the stock price increased over 400% almost immediately. The active value sector continues to present solid investment opportunities. Many times by working with existing management, providing capital and expertise to execute growth strategies, go-private transactions and/or recapitalization plans. |
Merger Arbitrage
In special situations, Merger Arbitrage has provided LW with solid investment returns having reasonable risk-reward metrics. In recent years, Merger Arbitrage has not presented many investment opportunities having the risk-reward characteristics needed for LW investment allocations. Distressed Securities Distressed securities are securities of companies or government entities experiencing financial or operational distress, or even bankruptcy. Opportunities often result from mispricing in inefficient, illiquid markets; or through an event, such as bankruptcy, recapitalization, strategic change, regulatory issues or other action. Investing in distressed securities involves significant risk and requires expertise to analyze each instrument, its position in an issuer's capital structure and the likelihood and timing of any ultimate recovery. LW has considerable experience investing in these securities. Project Development Project Development involves the planning, permitting, construction and initial business operations - usually within hard asset industries such as: real estate, processing plants, or logistics (shipping, handling & storage). The process includes planning, organizing, motivating, and controlling resources, procedures and protocols from inception to operation. These are multi-year investments requiring long-term vision, patience and significant management expertise. LW has considerable experience in this sector. |