Manager Research

To implement our strategies we are committed to identifying and partnering with outstanding investment teams.

Identifying investment teams likely to produce superior investment returns prospectively is a difficult task requiring a combination of quantitative and qualitative analysis. The typical quantitative approach to manager evaluation is insufficient. In all cases, great managers are passionately committed to investing and producing exceptional returns to investors. Success or failure depends on three tightly interwoven factors - culture, leadership, and investment excellence.

The partners of NLV pioneered a Theory Directed Approach to manager research. Designed to more accurately identify the best managers in the world, this research process examines fundamentally qualitative drivers of success.

Innovative Deal Structuring

Private equity investing in money management firms requires an eye to character, quality, culture and structure. Having identified great investment teams, Northern Lights turns its full attention to building lasting partnerships through careful alignment of interests.

Key transaction structure elements:

Ultra-long term capital

• Returns generally achieved through revenue or profit participation
• No fund-level liquidity need will ever force the sale of a portfolio company
• Enables long-term alignment of interests with portfolio company management

Minority ownership stakes

• Sustainable or declining ownership positions aligned with investment time horizon
• Permanent positions to capture “fat tail” economic upside
• Few or diminishing protective provisions and corporate governance influence

Flexible deal structures

• Tailored to current and anticipated needs of management
• Provides a committed equity line
• Capital drawn on an as-needed basis

Adding Value

Northern Lights identifies and supports the entrepreneurship of great investment managers. We deploy our resources, relationships, and know-how to help our partners grow and prosper.

Operational

• Identifying more scalable, cost-effective and easier to manage processes
• Constructing entire in-house operating infrastructures
• Negotiating reduced fees on outsourced services
• Providing quarterly reviews of operating processes to ensure smooth operations

Marketing & Distribution

• Assisting in the creation of structured products
• Assisting in the development of marketing materials and presentations
• Assistance in building internal or hiring outsourced marketing staff
• Relationships with key distribution partners in the U.S., Europe, and Australia
• Potential access to seed assets

Strategic

• Development of strategic business plans
• Product research and development
• Ongoing strategic partnerships