Hamilton Robinson Capital Partners
Celebrating 25 years
of Private Equity Investing
Annual Update - March 2009
Our 25th year in business finds us working with our business partners in
much the same way that we have for decades - originating sensible investment
transactions designed to withstand the vicissitudes of a turbulent economy
and world. Times have never been more uncertain, as we are often
reminded in conversations with operating managers and visits to new businesses.
We remember well the recessions of 1980, 1990 and 2001, and
while we view this current recession as potentially much worse, we also remember
that some of our most successful investments were made during
those earlier downturns. During these toughest of economic times we understand
that capital isn't easily available and lenders generally seem to be
even hostile towards small business in terms of the availability and pricing of
credit. We are currently serving the smaller-business market with partnership
equity capital and would be delighted to discuss your needs in the event
this is a topic of interest for your organization.
Developments at Hamilton Robinson Capital Partners
- Fund Closing: We were pleased to have an initial closing on our third fund last year and welcome the support of longtime investors and commitment of new investors. Our firm now has nearly $200 million under management.
- Initial Investment: Our first investment in Fund III took place in September 2008 with the addition of MEGTEC Systems, Inc., www.megtec.com, a leading global supplier of industrial and environmental control equipment. We backed an exemplary management team and received significant co-investment from our partners for this somewhat larger transaction.
- Portfolio Realizations: We sold two successful portfolio companies last year. Although our remaining portfolio is being impacted by the sharp contraction in the world economy, each is led by experienced managers that took steps early on to weather the storm.
Investment Appetite and Areas of Interest
Today's headlines are filled with stories of default, unemployment and dismal
earnings reports, and there is little in the way of customer orders to suggest
that the economy will be stronger in the second half of the year. We
remain cautiously optimistic, however, as we begin to see some early hints
of stability, which will set the stage for a change in customer confidence.
Our investment criteria remains unchanged, notably we still target revenues
of $25 million up to $200 million, predominantly in Engineered Products and
Systems and Specialty Business Services. That said, we find ourselves
most interested in businesses today that possess the following attributes and
sector focus:
- Companies with a strong recurring revenue base or services revenues
- Process equipment suppliers - especially in the energy, utility and infrastructure
markets
- Outsourced commercial services and facilities maintenance
- Capital goods manufacturers, even if they have experienced a downturn
- Process equipment suppliers - especially in the energy, utility and infrastructure
markets
- Recapitalizations and non-control investments where a quality company
needs some friendly capital for continued growth
No one knows the depth or breadth of the current economic crisis. That
said, we think we know something about how to manage effectively through
challenging times and bring together talent, experience, and resources with
one common goal: helping businesses improve for the benefit of all stakeholders.
After all, our firm has been investing in small, private companies
since 1984 - through the stock market crash of 1987 and the economic cycles
of 1991 and 2001 and we will look actively for opportunities through this
downturn as well.
About Hamilton Robinson Capital Partners
HRCP invests in engineered products and systems, and related industrial manufacturing companies, as well as specialty service and distribution businesses. We provide capital for acquisitions, recapitalizations, de-leveraging and joint ventures in companies with revenues from $25 million to $200 million.
