Among the most diverse types of investment funds, the search fund not only requires a deep analysis of the company to be purchased, but is also related to entrepreneurship.
Search funds are investment funds intended for the purchase of a single company. In this context, the fund manager will be in charge of managing the company, thus becoming an entrepreneur. As with any investment, its objective is growth in order to obtain a financial return. This implies a preference for middle market companies, which include small and medium-sized companies with great growth potential.
Although the search fund model emerged in the US in the 1980s, there are still few funds of this type operating in Brazil. On the national scene, the preference is for companies whose annual revenue is between R$ 20 million and R$ 100 million and that are making a profit.
As they are aimed at the acquisition and growth of a single company, they have a long investment horizon, until the manager and investors understand that it is time to sell the company and make the investment in the fund. Furthermore, it is possible that managers decide to maintain their stake in the company, which may be remunerated through dividends.
