The Finnish Search Fund Model

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Journal Title
Journal ISSN
Volume Title
School of Business | Master's thesis
Date
2019
Major/Subject
Mcode
Degree programme
Entrepreneurship and Innovation Management
Language
en
Pages
69+40
Series
Abstract
Search fund is an investment vehicle that provides an aspiring entrepreneur with opportunity to search for, acquire, manage, and grow a company. Since 1983, 258 U.S. search funds have returned aggregate ROI 8.4x and IRR 37%. Search funds have been identified in UK, Spain and Germany, but not in the Nordic. Search fund model can provide advantages for both investors and searchers. Investors are able to invest in young talent and established micro-growth companies, which are typically beyond the reach of the traditional private equity model. Searcher are able to become CEOs of running busi- nesses with significant equity stake early in their careers. In order to evaluate the feasibility of the search fund model on Finnish market, the qualitative study aims to identify strengths and weaknesses perceived by potential Finnish searchers and investors. The study asks if Finnish market has enough potential searchers who have the required skills and traits, potential investors who would be willing to provide the required search and acquisition capi- tal, and potential targets to support multiple search funds. The study shows a market opportunity for no more than 4 to 8 searches annually in next ten years. Raising search stage funding is identified as a key bottleneck, which may be effectively mitigated by introducing a catalyst to champion the model.
Description
Thesis advisor
Gartner, Johannes
Kelly, Peter
Keywords
search fund, search funds, entrepreneurship through acquisition, private equity, buyout, feasibility study, entrepreneurship
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