As a highly selective and disciplined investor for over 33 years, Kelso has generated attractive returns and multiples of capital invested. Since 1980, Kelso has made investments in over 110 companies with aggregate initial capitalization at closing of over $45 billion. These investments have spanned multiple business and economic cycles and widely varying conditions in the capital markets. Over 85 of these investments have been realized, with an average holding period on these realized investments of approximately five and a half years.
Kelso’s 11 Investing Principals have been with the Firm for an average of over 22 years. This has resulted in continuity and stability that has allowed the Firm to develop and apply a consistent and disciplined approach to pursuing and evaluating investment opportunities.
Kelso’s Principals and employees are collectively, by far, the single largest investor in each of Kelso’s four most recent funds. These investments represent a substantial majority of the Principals’ collective net worth. Kelso believes that this financial commitment creates a strong alignment of interests with management teams.
Kelso has built its successful investment record by working in close partnership with experienced and talented management teams. Kelso focuses on companies where the interests of management teams and Kelso are closely aligned. This is accomplished by ensuring that senior managers have made personal equity investments and receive meaningful equity incentive programs.
Kelso enjoys a reputation of being an attractive partner for management. Management teams enjoy working with Kelso for reasons such as (i) the Firm’s long-term view to building shareholder value, (ii) the continuity and stability of the Firm’s employees, (iii) Kelso’s significant level of personal investment, and (iv) the Firm's willingness to support growth in portfolio companies. Kelso believes that this relationship with management, in turn, helps to enhance deal flow, often creating opportunities for negotiated transactions or participation in limited auctions.
Kelso focuses its efforts and resources primarily on investment opportunities in growing middle market companies. Since 2000, the average initial capitalization at closing of the companies in which the Firm has invested and taken an active role is approximately $550 million. In addition to experienced and talented management teams, these companies typically have achieved a history of strong earnings and cash flows, maintain a significant market presence characterized by proprietary products or value-added services with sustainable franchises, and generate attractive returns on invested capital. These characteristics combine to create the potential for substantial growth in equity value. Kelso believes that its 33-year track record of investing in a broad range of industries through a variety of economic, business and financial markets allows the Firm to opportunistically select investments, regardless of industry or market conditions.