Investment Approach

Philosophy

Kohlberg’s investment focus concentrates on traditional manufacturing and service companies characterized by strong brands, recurring revenue streams and leading market positions offering attractive platforms for long-term growth and profit optimization. While a hallmark of our history is the ability to be nimble and opportunistic when attractive opportunities arise, we have developed particular sourcing and execution expertise within five industry categories: Industrial Manufacturing; Consumer Products; Business Services; Healthcare Services; and Financial Services. Kohlberg’s orientation around portfolio construction generally results in each investment Fund having a balanced mix of manufacturing and service portfolio companies, although we will purposefully modulate our investment focus during the investment life of a Fund to correlate with our prevailing view of the relative attractiveness of our core sectors. Historically, Kohlberg has not invested in companies that are in evolving or emerging sectors such as technology and telecommunications, or industries such as restaurants, retail or apparel where investment involves taking fashion, fad or brand risk. The Firm also seeks companies where an equity infusion can reduce excessive leverage that is inhibiting operations and limiting growth.

Kohlberg investments are also characterized by their transaction type – historically approximately 50% of the Firm’s investments have been in corporate divisional carve-outs or public-to-private buyout transactions. Our experience with the complexities of carving out embedded assets from corporate parents, often involving the structuring of multiple supply and transition agreements to replicate vital existing business relationships between parent and subsidiary, distinguishes us from other competitors.  In addition, Kohlberg’s experience working with public company boards, special committees and multiple stakeholders position it favorably as a partner who brings the acumen necessary to complete complex transactions.  Furthermore, privately owned businesses face their own unique challenges as they grow and transition from entrepreneurs to institutional owners. Careful navigation is required to maintain the culture, energy and entrepreneurship that made the Company a success while at the same time formalizing strategy, institutionalizing processes, and enhancing the team to implement effectively the next phase of the Company’s growth. Having completed over 35 private company transactions over our history, we are sensitive to these nuances and are skilled in working with owners and managers to seamlessly transition through these evolutionary phases.

© 2017 Kohlberg & Company, L.L.C.

Photography courtesy of C. Bernstein & MGF