Our strategy is to invest in the small “middle market” company (generally companies with less than $75 million in revenues and less than $50 million in total capitalization) in support of a growth and expansion strategy. Our expectation is that such a strategy is first articulated and researched by the company’s management team, approved by the company’s Board of Directors and then thoroughly vetted by Arena’s professionals and those Executive Partners possessing knowledge most relevant to the company’s industry and current situation. While our investments may not always represent a control position, each investment will represent a considerable ownership position in the company (most often 35% or greater) and involve significant representation on the company’s Board of Directors, typically including an Arena professional as Board Chairperson.

As part of our investment decision, we assess the strength and quality of each member of a company’s senior management as well as the strength and quality of the individual members of the company’s Board of Directors. With respect particularly to the Board, we desire individual Directors with talents and experiences such that the Board as a whole can provide management with relevant expertise as it oversees management’s execution of the company’s growth plan. Arena highly values a lasting and continuing partnership with management, with all members of the company’s Board and with all other company stakeholders. The partnership for which we strive is based upon mutual respect, direct and open communications and uninhibited information flows and established short and long-term performance plans that are clear in their construct and against which success can be readily measured and rewarded appropriately. We particularly target service providers, where the service offered is unique and narrowly focused, and avoid the asset intensity inherent in most manufacturing business models.

The Arena portfolio company typically possesses the following characteristics:
  • Strong industry growth dynamics - the company participates in an industry characterized by macro dynamics that are driving organic demand or industry consolidation
  • Operations at a point of inflection - the company requires both our Fund's capital and Arena's strategic and operational support to rapidly expand its business and to develop its management team to anticipate the many challenges that come with scaling a company
  • Leveraging of Executive Partners - Arena invests where our professionals and Executive Partners, and the strategic network these individuals have established over many years, are important to the evaluation of a company's current operations and growth plans and equally important to enabling the company's future success

Our commitment to and confidence in this strategy is represented by a capital commitment to our current $212.5 million Fund, of $40 million by the General Partner group, and $25 million by our Executive Partners and Board of Directors.