Reflecting on 2006 Part 1

I feel a bit silly using this classic writers crutch, but a look back at last year seems totally appropriate. It’ll take a few days to cover the major categories, but here is the deal flow review for last year.

Opportunities: >500
Financial analysis, management meetings, etc.: 149
Outlines / Discussion papers: 41
Executed term sheets: 8
Lead transactions, both closed and committed: $62.5 million for 7 companies
Lead transactions closed: $46 million

Compared to last year, we saw a 50% increase in opportunities leading to some form of due diligence, but no real increase in the actual number of quality deals (ie. discussion papers). The dollar value of closed leads was down from $62 million in 2005 to $46 million. On a marketshare basis, we were likely static to 2005, which is gratifying in a competitive marketplace.

The overall figures were likely undoubtedly impacted in a negative way as part of the team was distracted for much of the year with the raising of our Fund 3, a $125 million recirculating 8 year $400 million investment program. But once that was out of the way and closed in October, we saw a real uptick in high quality deal flow; the fruits of which appear shortly.

Special thanks to the team and their families; things really jelled in 2006. And to our Fund 3 limited partners for entrusting us with their funds. And to the clients, that have given us the chance to serve their stakeholders and benefit from our flexible growth capital.

MRM