| As a mezzanine investor, Merit is both a lender and a shareholder. This dual role requires a balanced approach to investing, considering both safety of principal and equity appreciation.
Our typical investment is structured as a 5 to 7-year subordinated debt instrument with equity ownership provided by a warrant and the outright purchase of common or preferred stock. This structure seeks to earn both a current yield and long-term capital appreciation with a bias toward risk control.
Merit considers many types of investment partnerships. We are very comfortable “sponsoring” transactions, handling the entire investment process ourselves and supplying all necessary capital. In addition, we often work with small or fundless sponsors by providing equity capital along with mezzanine financing to support larger investments that these groups may not be able to complete alone. Finally, we partner with large private equity firms on more traditional mezzanine investments. Regardless of the arrangement, however, our investment philosophy and process remain the same.
To read more about Merit professionals or our diverse investment portfolio, click here to download a PDF overview of the company.
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