Michael Woolhouse

They saw the 5X, they see the next 4X, and they see the next 4X after.

That's the company that you want to hold on to for longer.

So this is a positively biased opportunity set.

And these companies are being selected by the general partner.

to put into one of these investment opportunities, one of these single asset continuation vehicles based on that track record of success.

Inherently, that reduces risk.

If you think about a regular way buyout deal, groups are buying companies for the first time.

They do a lot of diligence, they evaluate it as much as they can, but they don't really understand what they've owned until they join the first board meeting, go to the second board meeting, then they find out everything that they don't know.

We need to change management.

We got the strategy kind of right, but we need to go in this direction, not that direction.

because the sponsor has prior experience with the business, that risk is effectively eliminated.

And then you come back to the alignment equation as I was beginning to talk about before.

General partners are making the largest GP commitments into these deals or putting as much skin in the game alongside these deals more than anywhere else in the private markets that I'm aware of to give you some order of magnitude

Maybe two fun facts.

The first is GPs are typically committing somewhere between 8% to 10% of the capital of a continuation vehicle, and that's several times larger than they would in a regular way buyout deal.

In our experience, we've seen the quantum involved being larger in the single asset continuation vehicle that we're involved with relative to the main fund.

So if you think about skin in the game, there's no greater place to find skin in the game than in this market.

Positive selection bias, that experience definitionally lowers risk because they direct experience with the company.

And then third, greatest alignment you'll find in the private equity market.

So if the general partner is realizing five times the money on the sell side of the deal,