INVESTING WISELY

At Evolute Capital, we focus on identifying undervalued assets with high growth potential. Our unique approach to investment emphasizes flexibility, allowing us to adapt to market conditions while ensuring long-term value creation that resonates with our investors. ​

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The fundamental thesis of our Fund is simple. Find deeply valued assets that are being overlooked by private equity, hedge funds, and/or institutional capital. We will invest anywhere and everywhere we believe there is deep value in an asset, business, or position we can take.  

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This also means that we have no concerns if we sit in cash as a position or hold a company we own for as long as 25 years or more. Both have merit depending on when and how deep valuations are found. As broad asset class correlations have reached unprecedented levels, we believe there will always be subindustries or niches where value can be derived.  

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In private company transactions, the two most important factors to consider are the valuation of the company being purchased and how the deal is structured to prevent excess investor risk. This is why we will only purchase companies at valuation multiples that are significantly below those of other private equity firms or institutional investors. As we speak, most PE firms are willing to pay 8x-12x multiples for larger private companies. Our targets would be in the range of 1-3x earnings. Or the deal structure relative to the tangible business risks present outsized return probabilities.  

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We also believe it is imperative to maintain an open thesis to explore opportunities in the public markets as they present themselves. For example, given the excessive valuations of the markets as a whole, we may consider taking a short position in public securities if we believe the principal risk to our investors is minimal relative to the potential reward.  

Simply using valuation methods similar to a Berkshire Hathaway or Mr. Warren Buffett as a guideline, and then adding some quantitative overlay, we can create excess risk adjusted returns for our clients in any asset we see value in owning. Or betting they will go lower.  

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No, we are not a long/short hedge fund, or a PE firm, or simply a Holdco. Evolute Capital embodies the essence of adapting to the current environment. Markets and environments change. We must evolve with them. Our goal each day is not to be the smartest, but rather, to avoid the stupid mistakes as much as possible. This comes from providing a clear understanding to our clients of how our positioning, diligence, and valuation methodology will be applied. We provide outright transparency in each of our decisions and welcome our investors feedback as well.  

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