Private Equity for Family Businesses
Family-owned businesses are often looking for a long-term financial partner to support the company’s strategy or to help with growth initiatives, e.g., international expansion or add-on acquisitions. In our experience, family-owned businesses often do not want to partner with traditional Private Equity funds due to the need to give up ownership and the PE funds’ need to force an exit of the equity shares after a four to five year holding period.
Castik Capital can address these issues by offering an investment through a hybrid debt/equity instrument, i.e. an instrument with a debt-like interest rate component and a performance-related equity component. This hybrid loan structure allows family-owned businesses to maintain existing shareholding structures.
In addition, there will not be a forced exit after four to five years. Instead, Castik Capital can remain a partner to the company for a period of up to 10 years and give the company sufficient time to grow.