Dark Horse Exists Because There is a Better Way to Invest
After more than a decade working at and with some of the most recognized distressed firms, it became clear their approach is similar: static, reactionary, and overly reliant on “the bankruptcy process” for results.
Over the business cycle, too much cash is left on the table.
Well-Defined Research Process
Proactively identify structural change to highlight investment themes and opportunities.
Focus on capitalizing on misunderstood companies subject to such change.
Intrinsic value discovery based on levered free cash flow forms the foundation of any investment.
The goal is to discover cash on sale.
Flexibility, Size, and Speed
Utilize experience with large, overly complex restructurings and focus on small and mid-cap opportunities that are not followed by larger funds.
Smaller opportunities are typically more plentiful and less trafficked, providing greater pricing inefficiencies for the same amount of risk.
No bureaucracy - fully researched investment opportunities can be executed quickly.
Post-mortem evaluation to determine whether success was caused by skill or luck.
Why did we win? Why did we lose? Were we right to pass?
Understanding the actual drivers of a win or a loss enable the ability to create and continuously optimize a successful investment process.
Win with Integrity and Class
Approach every day as a competition; the market is always a willing participant.
Preparation provides clarity and an edge in an otherwise opaque situation.
A Dark Horse win is a loss for the counterparty; show class and humility - paths will cross again.