Investment Process
Deal Sourcing & Due Diligence
Deal Sourcing
In addition to traditional deal sourcing channels, such as sell-side investment banks and boutique M&A firms, Performa Alpha uses a variety of novel ways to source companies to acquire. These include:
- Industry networks: develop relationships with key industry players, such as trade associations, suppliers, and customers. This can give us early access to potential acquisition candidates.
- Data mining: use data mining techniques to identify companies that meet our investment criteria. This can include analyzing financial data, social media data, and other publicly available information.
- Employee referrals: we encourage employees to raise awareness of what we do with their employer. This can be a valuable source of deal flow, as employees often have a deep understanding of the industry and the companies they work for.
- Crowd sourcing: We're even looking into using crowd sourcing initiatives to identify potential acquisition candidates. This can involve offering rewards for referrals or running contests to identify the best investment opportunities.
Thorough Due Diligence
Once we've identified a potential acquisition, we will conduct a thorough due diligence process to assess the investment opportunity. This process will typically involve the following steps:
- Financial due diligence: This involves reviewing the company's financial statements and other financial information to assess its financial performance, quality of earnings, cash flows, and potential growth from our operational support.
- Legal due diligence: This involves reviewing the company's legal documents, such as contracts, patents, property, and intellectual property agreements, to identify any potential legal risks and unrealized value.
- Commercial due diligence: This involves assessing the company's competitive landscape, market position, and growth prospects.
- Operational due diligence: This involves assessing the company's operations, management team, and culture.
Fund Structure
Performa Alpha's Fund Structure
Overview
Our goal to raise capital for a fund that invests in businesses that support live performance will use a limited partnership (LP) structure. This structure provides a number of advantages, including:
- Pass-through taxation: LPs are taxed on their share of the fund's income and losses, regardless of whether the fund distributes them. This can be advantageous for investors who are looking to tax-efficiently invest in the live performance sector.
- Limited liability: LPs have limited liability for the fund's debts and liabilities. This means that their personal assets are generally protected in the event that the fund experiences financial difficulties.
- Flexibility: LPs can be structured to meet the specific needs of Performa Alpha and its investors. For example, the LP agreement can specify the investment strategy, investment horizons, and fees of the fund.
Key Features
The following are some of the key features of our fund structure for raising capital:
- Investment strategy: The fund has a specific investment strategy that focuses on investing in businesses that support live performance. This could include businesses that provide equipment, services, or technology to the live performance industry.
- Investment horizon: The fund has a specific investment horizon of 5-7 years. This is the period of time during which Performa Alpha expects to invest in and manage the portfolio companies.
- Fees: Performa Alpha charges two types of fees to investors: (1) a management fee, which is a percentage of the fund's assets under management, and (2) a performance fee, which is a percentage of the fund's profits.
- Exit strategy: Performa Alpha has a set of exit strategies for the fund. This could include selling portions of the portfolio companies to strategic buyers or taking them public.
