A search fund is an investment vehicle through which its founders search for, acquire, and operate a single business. These businesses generally have attractive recurring revenue characteristics and strong profitability metrics. The principals of these Search Funds – called “searchers”- are usually (but not always) recent graduates of top business schools here in the U.S. and abroad. Despite their relative youth and inexperience, searchers as an asset class have generated exceptional long-term returns: according to the Stanford Center for Entrepreneurial Studies, the aggregate gross IRR of the search fund asset class through year-end 2023 was 35.1%, and the aggregate gross multiple on invested capital was 4.5x1Stanford Graduate School of Business 2024 Search Fund Study published June 28, 2024. The performance number presented are not attributable to any Housatonic investment vehicles. Housatonic does not guarantee the studied performance will be met in the future by Housatonic or its investment vehicles. The Stanford Search Fund Study only provided gross results and Housatonic is not able to obtain net performance figures. The Study is available upon request..
The Managing Directors of Housatonic Partners helped to pioneer the search fund community, and we have backed over one hundred search funds over the past two decades. We enjoy the unique opportunities we have through search funds to work with young – often first-time – entrepreneurs as they evolve into emerging business builders and grow dynamic companies that are potential or eventual recapitalization candidates for our funds.
Should you have an interest in learning more about our search fund efforts, please contact [email protected].