According to numerous metrics, travel and leisure is one of the largest components of the economy, second only to healthcare. The firm's investment philosophy is to seek to generate attractive rates of return for its investors by improving the operating performance of its portfolio companies rather than relying on financial engineering.
Although formed in 2005, each of our investment principals has worked together previously. Cumulatively, our professionals have over 200 years of experience in the travel and leisure industry, having served in many capacities such as key operating executives, investment bankers, lenders and attorneys. This team works closely with each portfolio company's management to understand the company’s business and markets. While each investment is led by an independent management team, the firm supplements the expertise of management with a dedicated team within the firm to monitor each investment as well as an asset management team to enhance each management team's operational and financial management resources.
Our firm is founded on the principle that a buyout investment will succeed if the interests of management and investors are aligned. Management is given the opportunity to make a direct investment in their portfolio company. In return, managers are provided meaningful incentive compensation that allows them to earn additional ownership of the company, which allows them to further share in the success of the business long-term. While a common structure in private equity, we believe this type of incentive structure is unique in many aspects of travel and leisure business.
We believe in investing in people, assets and businesses, both monetarily and operationally. We supplement each management team’s expertise with a board of KSL professionals and outside advisors who offer a unique insight, and who can help grow the business, typically with either a marketing or operational background. Additionally, we strive to capitalize a business appropriately to position it for future growth.
While our typical targeted minimum equity requirement for the fund is $25 million, because of the nature of our portfolio companies, related entities and our desire to grow these businesses, no transaction is too small to execute. We have the ability to unilaterally commit up to $400 million of equity in any one transaction.
We typically pursue transactions where we control or have the ability to significantly influence the investment. This may take the form of whole ownership, joint venture or participating debt or preferred equity investments. For mezzanine investments, we have the ability to unilaterally commit up to $100 million in any one transaction.
Our extensive industry knowledge, network of in-house experts and third party consultants and operational expertise enable us to conduct comprehensive due diligence reviews expeditiously, providing sellers and borrowers with a timely offer and a high likelihood of closing.