Portfolio

Typical Asset Structures

DMH&CO makes investments in a variety of ways. The principle methods with which we take stakes in companies or assets is via one of the following:

Direct ownership stakes – this is the simplest form of ownership, which is held on our balance sheet, and will usually comprise a majority stake in the asset

Subsidiary holdings – sometimes, it’s more efficient financially and operationally for us to hold assets in subsidiary entities, often overseas. In this way we can facilitate more easily debt raises that are tied to the equity held in the subsidiary entity without the requirement for overburdening the capital we keep available for acquisition opportunities elsewhere.

Special Purpose Vehicles (SPVs) –  In their simplest evolution, these are shell corporations used to hold assets in (mostly tax or income efficient) overseas juristictions, without the burden of living and breathing operations that weigh the desired efficiency down. However, increasingly, SPV’s are becoming more actively managed by the investment managers that are structuring them, and so it is the case for us as well.

Convertible Debt Notes – also known as C-Notes, these are essentially IOUs from the company to the shareholder that allow for conversion of the outstanding principle and interest portion of the balance on the loan at the point of redemption into (usually heavily discounted) equity. We nearly only ever hold a C-Note in an early-stage company or when making a venture capital investment; otherwise, it’s usually more efficient to take equity. For VC investments, C-Notes are very standard however.