Banks do not fund small company (under $20 million in revenue) management buy-outs. We do.
San Elijo Partners is an LLC that invests in profitable, traditional businesses across a wide variety of industries. Our core mission is to provide liquidity for management buy-outs in small privately held companies. We partner with existing management and provide them the capital they need to buy-out existing, non-operational shareholders.
Our track record is a mixed bag of successes and struggles. Over the past 7 years we have provided liquidity to over 20 companies and earned an average annual net equity growth for our shareholders of 26% after tax.
The fund is a Manager managed LLC and no members have any control over fund investments, liquidity, timing of payments, etc. However, the fund distributes 55% of net taxable income on a quarterly basis to all existing members on a pro rata basis.
This fund does not provide any guidance on liquidity, timing of investments, or management decisions. The members are truly in this LLC for the long haul and must not be concerned with a liquidity event at any time. Further, the LLC invests in small businesses whose profitability can (and does) swing wildly. This means the profitability at San Elijo Partners is incredibly volatile and illiquid.
You should not participate in San Elijo Partners with any money that you expect to get back. While our target is to beat 15% net equity growth after tax, San Elijo Partners is highly speculative and the investments we make could easily become worthless.
That said, the majority of my net worth is invested in San Elijo, and I clearly believe that we can (and will) make money with our overall investment strategy. Further, I am not paid any management fees unless I exceed a 6% hurdle rate of return on equity for all members. My pay is 25% of the gains above 6%.
Other than that expense, San Elijo Partners has nominal office, legal and accounting fees annually that represent less than 3% of total revenue. If you are interested in learning more about San Elijo Partners, feel free to contact me at firstname.lastname@example.org