RAP Approach

Families are living, breathing organisms (no two are alike), unlike institutional investors, so need a non-institutionalized approach.  Because families by and large have built their wealth through the creation and ownership of operating companies, they prefer to continue to invest in the same asset classes scaled through the support of experienced investment advisors and operating partners.  Families are tired of traditional private equity’s lack of transparency, misaligned interests, limited control, and paying high fees at the Family’s expense so are seeking more collaborative investment relationships with groups such as Royal Ascot Partners.

Because Wall Street PE funds and their partners/principals have become fund raisers in place of leaders of businesses, the current PE fund approach incents fund managers to deploy more capital, become less transparent, and primarily focuses on the fund level rather than the portfolio or individual investment levels.  The non-RAP PE approach places more emphasis on financial engineering than on managing businesses long-term to add value and maximize capital appreciation.  As PE fund managers come from Wall Street, not Main Street, they generally lack operating experience fundamental to the success of any acquisition.  PE fund managers consequently operate in a non-inclusive fashion while RAP wholeheartedly works side by side with its Family partners.

Investment Challenges Families Face

RAP Solutions

  • Lack of visibility, lack of communication from Private Equity Group (PEG) organization
  • Partnership approach; regularly scheduled communication in person or via phone and/or email
  • Preference to keep Family identity confidential although meetings may be required to drive results
  • Ability to intervene as a principal and agent preserving the confidentiality of the Family via the RAP moniker
  • PEG has no limited interest in pursuing litigation; preference to stay out of restructuring and turnarounds
  • Extensive experience in restructuring non-performing businesses
  • Families have differing member perspectives which may challenge a unilateral approach
  • Expertise in deal structuring to accommodate stakeholders with disparate interests
  • Generational circumstances quite often play a role in operational and financial management divergence
  • Succession planning to provide senior Family members with liquidity and junior Family members with growth opportunities
  • How to obtain collaboration with trust, not blind acquiescence nor institutional condescension
  • Honest advice regarding merits of specific investment opportunities
  • PEG’s intent to invest opportunistically rather than methodically, patiently and strategically
  • Drafting and execution of a strategic plan to ensure that all direct investments build upon each other