PennantPark seeks to use our experience and access to market information to identify investment candidates and to structure investments quickly and effectively.
We focus on identifying and investing in companies with strong cash flow, proven management teams, and defensible market positions that lack access to the public financing markets or are underserved by traditional lending sources.
Our typical investment size ranges up to $250 million. We are flexible and able to invest larger or smaller amounts in certain cases.
Debt investments are principally structured to provide current cash interest income. Equity investments can be structured in the form of preferred stock, warrants, or common equity co-investments. PennantPark has the capability and flexibility to make debt and associated non-control equity investments in middle market companies.
ESG factors are raised and discussed as a part of the investment evaluation and diligence process. A formal ESG process and checklist has been incorporated into our investment memos. Through the use of the checklist our diligence team is able to highlight issues that are relevant for further discussion
We adhere to a value-oriented philosophy, which seeks to minimize the risk of capital loss without foregoing potential for capital appreciation.
Our investment selection process is guided by the following criteria:
Our rigorous due diligence process is informed by the breadth and depth of our experience, industry expertise, and network of contacts. We believe that consistent performance across credit cycles is driven by rigorous fundamental research.
Baseline due diligence typically includes:
Upon the completion of due diligence and a decision to proceed with an investment in a company, the team bringing in the opportunity presents the potential investment to our Investment Committee, which determines whether to pursue the potential investment. The robust Investment Committee memoranda focus on downside cases to ensure that risks are thoroughly understood and evaluated from an owner’s perspective.