For two decades, HRCo has consistently grown equity value in smaller private businesses based on our aggressive program of building excellent companies in partnership with operating managers. Of all the strategies and tactics available to us, we have found that the three most important value builders in our program are the pursuit of a positive business culture, a focus on lean operations, and development through add-on acquisitions. We have developed comprehensive methods and compensation programs to promote these practices at our portfolio companies.

Central to our strategy, and every one of our investments, is a partnership with operating managers driven by shared objectives and meaningful equity incentives. HRCo sets itself apart from many investment firms by its demonstrable commitment to the operating managers of companies in which we invest. We provide these managers with a strong board of directors with relevant industry experience to help develop strategy and promote profitable growth. We never set out to take management positions at our portfolio companies, although we are prepared to do so, and have done so in the past on a temporary basis, as needed.

HRCo strives to build investment value through every step of the private equity process. We creatively source proprietary transactions as well as review auction properties. Non-auction deal sourcing results in over 80% of our closed transactions. We close transactions based on the operating potential of a business, more so than capital markets, as we believe this is where the greatest value creation opportunity exists.

HRCo typically leads its investments, including six of nine platforms in our current fund; three of five in fund one, and all three build-up partnerships in the 90’s. In forming portfolio company boards, we consider the contributions and perspective of members in the following areas: strategy and business planning, notably in lean processes, budgeting, and new business development; implementation of every aspect of add-on acquisitions, from setting the strategy and developing targets to closing the deal and integrating the new business; financial planning and refinancing to lower costs and to provide strong long-term capital structures; recruiting and strengthening management teams and creating practical incentive compensation programs.