Resilience is everything! Our unlevered buyout model gives us the flexibility to rebuild, pivot, and grow—even when challenges hit. While PE-backed bankruptcies hit record highs, we’re proud to have a model that doesn't just weather the storm—it thrives in any market. If you’re exploring alternatives to the traditional buyout model—whether as an investor, operator, or industry professional—we’d love to connect! #UnleveredBuyout #Consistency #Buyout #Mergersandacquisitions
Damnit – we aren’t perfect!? But look at the difference in our results even when we're not… The S&P just reported that 2024 hit a record high for PE/VC-backed bankruptcies, with 110 companies filing—this is a 15% increase from last year and is 60% greater than non-PE/VC. It’s a sobering stat, but not all that surprising given interest rates haven't gone down and the lending environment is tougher. Banks and private credit funds are definitely more aggressive these days when it comes to enforcing remedies on potential defaults or covenant breaches. For funds operating with high leverage, it’s brutal! Debt payments pile up, restrictive covenants leave little room to maneuver, and when portcos struggle with profitability, the runway runs out fast. That’s why I’m so grateful for Tide Rock’s model, especially right now. We recently had our first few “workouts” where a few of our historically well performing companies had some setbacks and started losing EBITDA. No bueno! In any traditional levered model, we probably would have been toast. Allocated capital entrusted to us by our investors… gone. But we don’t have debt, and we have a great team focused on nothing but operational excellence. So, we quickly made changes, rebuilt basecamp, and now, all of our companies are growing and profitable again. The underperforming companies? We expect them to be among our highest performers this year. By avoiding amortized debt in our transactions, we have the flexibility to focus on operational improvements, even during tough times. We’re not tied down by sky-high debt servicing costs, restrictive bank terms, or the constant threat of bankruptcy. We are really good at what we do, but we are not perfect, and this unique, unlevered buyout model gives us the flexibility to withstand and recover from unexpected headwinds. #consistency #unleveredbuyout #buyout