Investment Structure

For each investment, the Firm designs an investment structure tailored to the business of the portfolio company.  Pine Brook looks to fund portfolio companies’ growth primarily through equity investments rather than leverage.  The Firm will often use a “Line of Equity” funding structure.  Under the Line of Equity, the Firm commits equity capital sufficient to finance a multi-year business plan on terms and valuations agreed upon at the time of the initial commitment.  Capital is made available over time subject to operational financial progress measured generally against the portfolio company’s business plan, the Firm’s view of how management is performing, and whether the Firm’s investment thesis remains valid.

• Benefit to the Management Team:  The Line of Equity approach changes the opportunity set available to the company. It allows management to remain focused on achieving its business plan and the long-term goals for the company rather than be distracted by the need to continually raise capital.  The approach protects the company’s access to funding from disruptive events in the capital markets and allows management to invest based on Pine Brook’s balance sheet in addition to its own.

While Pine Brook will typically use the Line of Equity structure, it will also invest substantially all of the required equity up front if appropriate.