Adam Patinkin

Yeah, so I appreciate that, Scott. So on Monday of this week, so this is fresh news, I joined a company called Kingsway Financial Services. The company is listed on the New York Stock Exchange under the ticker KFS, KFS. And what Kingsway is, is it is essentially they've taken the search fund model and made it or adopted it to the public markets.

Yeah, so I appreciate that, Scott. So on Monday of this week, so this is fresh news, I joined a company called Kingsway Financial Services. The company is listed on the New York Stock Exchange under the ticker KFS, KFS. And what Kingsway is, is it is essentially they've taken the search fund model and made it or adopted it to the public markets.

And so this firm has permanent capital and they have taken the search fund model and deployed it in a way where, you know, this is kind of a difficult model to access in the private markets. But they've made it accessible for everyone in the public market.

And so this firm has permanent capital and they have taken the search fund model and deployed it in a way where, you know, this is kind of a difficult model to access in the private markets. But they've made it accessible for everyone in the public market.

So just for folks who may not be familiar with it, if you look at all of the asset classes out there, private equity, venture capital, hedge funds, equities, credit, I don't know of any asset class that's performed better than search funds. Stanford Business School does a biennial survey.

So just for folks who may not be familiar with it, if you look at all of the asset classes out there, private equity, venture capital, hedge funds, equities, credit, I don't know of any asset class that's performed better than search funds. Stanford Business School does a biennial survey.

And over the last 40 years, the annual return of search funds across every search fund that's ever existed, good ones, bad ones, whatever, is 35% per year. And it just blows away everything else. It's an amazing model. And there's no guarantees that that's what will be in the future. But that's what it's been in the past.

And over the last 40 years, the annual return of search funds across every search fund that's ever existed, good ones, bad ones, whatever, is 35% per year. And it just blows away everything else. It's an amazing model. And there's no guarantees that that's what will be in the future. But that's what it's been in the past.

Yeah, so it's essentially where you have someone who's young, who's hungry, and almost always is a recent graduate of one of the top business schools in the U.S. And they want to go run a company. They might have spent a decade working at various other organizations, but they feel like that they are hungry and have some of the qualities and self-confidence that they want to run a business.

Yeah, so it's essentially where you have someone who's young, who's hungry, and almost always is a recent graduate of one of the top business schools in the U.S. And they want to go run a company. They might have spent a decade working at various other organizations, but they feel like that they are hungry and have some of the qualities and self-confidence that they want to run a business.

But they don't have a company to inherit. They don't have an idea where they could go and get venture capital backing. And so what they do is they go raise money essentially from friends and family and from some of the folks in the search fund industry to go buy a small business that they can then run.

But they don't have a company to inherit. They don't have an idea where they could go and get venture capital backing. And so what they do is they go raise money essentially from friends and family and from some of the folks in the search fund industry to go buy a small business that they can then run.

And when this concept kind of came up in the 80s, what I think they found was that there's a lot of folks who are willing sellers to these searchers. The best profile is maybe someone who's ready to retire. They've got a business with a couple, 3 million of EBITDA. and they don't have a natural person to hand the business off to. There's no kid they can hand the business to.

And when this concept kind of came up in the 80s, what I think they found was that there's a lot of folks who are willing sellers to these searchers. The best profile is maybe someone who's ready to retire. They've got a business with a couple, 3 million of EBITDA. and they don't have a natural person to hand the business off to. There's no kid they can hand the business to.

There's no number two in the company who can afford to buy it from them. They're looking for an exit to pay for their retirement. Private equity is not a good fit a lot of times because private equity is looking to back a CEO, not to help a CEO exit. And so it tends not to be a great fit. And so they're kind of stuck because really their only sale option is to sell to a competitor.

There's no number two in the company who can afford to buy it from them. They're looking for an exit to pay for their retirement. Private equity is not a good fit a lot of times because private equity is looking to back a CEO, not to help a CEO exit. And so it tends not to be a great fit. And so they're kind of stuck because really their only sale option is to sell to a competitor.

And if they sell to a competitor, the competitor might lay off a third of the people and get rid of the name of the company. And this is something that maybe the owner has worked his or her for a significant portion of their life to build and to see their friends get laid off and to have their name gone and their legacy kind of tarnished, that's a bad outcome.

And if they sell to a competitor, the competitor might lay off a third of the people and get rid of the name of the company. And this is something that maybe the owner has worked his or her for a significant portion of their life to build and to see their friends get laid off and to have their name gone and their legacy kind of tarnished, that's a bad outcome.

And along comes a searcher who's maybe 40 years old and says, I'm young, I'm hungry, I'm smart, I'm talented. I'll buy the business from you. I will run it. Instead of laying anyone off, I'm going to add more people to the business. I'm going to grow it. I'm going to keep your name. And that is really appealing. They say, hey, just give me a turn less or a couple turns less on the multiple.

And along comes a searcher who's maybe 40 years old and says, I'm young, I'm hungry, I'm smart, I'm talented. I'll buy the business from you. I will run it. Instead of laying anyone off, I'm going to add more people to the business. I'm going to grow it. I'm going to keep your name. And that is really appealing. They say, hey, just give me a turn less or a couple turns less on the multiple.