Direct Origination. We focus on lending directly to companies that are underserved
by the traditional banking system and generally seek to avoid broadly marketed
investment opportunities. We source investment opportunities through direct relationships
with companies, financial sponsors, financial intermediaries such as national,
regional and local bankers, accountants, lawyers and consultants. Our national
origination platform allows us to seek geographic diversity in our investments.
Disciplined Underwriting. We perform thorough due diligence and focus on several
key criteria in our underwriting process, including strong underlying business
fundamentals, a meaningful equity cushion, experienced management, conservative
valuation and the ability to deleverage through cash flows. We are often the agent
for the loans we originate and accordingly control the loan documentation and
negotiation of covenants, which allows us to maintain consistent underwriting
standards. We invest across a broad range of industries and our disciplined underwriting
process also involves engagement of industry experts and third-party consultants.
We believe our disciplined underwriting culture is a key factor to our success
and our ability to expand our product offerings.
Prior to making an investment, the investment team subjects each potential borrower
to an extensive credit review process, which typically begins with an analysis
of the market opportunity, business fundamentals, company operating metrics and
historical and projected financial analysis. We also compare liquidity, operating
margin trends, leverage, free cash flow and fixed charge coverage ratios for each
potential investment to industry metrics. Areas of additional underwriting focus
include management or sponsor (typically a private equity firm) experience, management
compensation, competitive landscape, regulatory environment, pricing power, defensibility
of market share and tangible asset values. Background checks are conducted and
tax compliance information may also be requested on management teams and key employees.
In addition, the investment team contacts customers, suppliers and competitors
and performs on-site visits as part of a routine business due diligence process.
Our disciplined underwriting process also involves the engagement of industry
experts and third-party consultants. The investment team routinely uses third-party
consultants and market studies to corroborate valuation and industry specific
due diligence, as well as provide quality of earnings analysis. Experienced legal
counsel is engaged to evaluate and mitigate regulatory, insurance, tax or other
company-specific risks.
After the investment team completes its final due diligence, each proposed investment
is presented to our investment committee and subjected to extensive discussion
and follow-up analysis, if necessary. A formal memorandum for each investment
opportunity typically includes the results of business due diligence, multi-scenario
financial analysis, risk-management assessment, results of third-party consulting
work, background checks (where applicable) and structuring proposals. Our investment
committee requires a majority vote to approve any investment.
Medley Management Inc's Comment on Supply Chain
Direct Origination. We focus on lending directly to companies that are underserved
by the traditional banking system and generally seek to avoid broadly marketed
investment opportunities. We source investment opportunities through direct relationships
with companies, financial sponsors, financial intermediaries such as national,
regional and local bankers, accountants, lawyers and consultants. Our national
origination platform allows us to seek geographic diversity in our investments.
Disciplined Underwriting. We perform thorough due diligence and focus on several
key criteria in our underwriting process, including strong underlying business
fundamentals, a meaningful equity cushion, experienced management, conservative
valuation and the ability to deleverage through cash flows. We are often the agent
for the loans we originate and accordingly control the loan documentation and
negotiation of covenants, which allows us to maintain consistent underwriting
standards. We invest across a broad range of industries and our disciplined underwriting
process also involves engagement of industry experts and third-party consultants.
We believe our disciplined underwriting culture is a key factor to our success
and our ability to expand our product offerings.
Prior to making an investment, the investment team subjects each potential borrower
to an extensive credit review process, which typically begins with an analysis
of the market opportunity, business fundamentals, company operating metrics and
historical and projected financial analysis. We also compare liquidity, operating
margin trends, leverage, free cash flow and fixed charge coverage ratios for each
potential investment to industry metrics. Areas of additional underwriting focus
include management or sponsor (typically a private equity firm) experience, management
compensation, competitive landscape, regulatory environment, pricing power, defensibility
of market share and tangible asset values. Background checks are conducted and
tax compliance information may also be requested on management teams and key employees.
In addition, the investment team contacts customers, suppliers and competitors
and performs on-site visits as part of a routine business due diligence process.
Our disciplined underwriting process also involves the engagement of industry
experts and third-party consultants. The investment team routinely uses third-party
consultants and market studies to corroborate valuation and industry specific
due diligence, as well as provide quality of earnings analysis. Experienced legal
counsel is engaged to evaluate and mitigate regulatory, insurance, tax or other
company-specific risks.
After the investment team completes its final due diligence, each proposed investment
is presented to our investment committee and subjected to extensive discussion
and follow-up analysis, if necessary. A formal memorandum for each investment
opportunity typically includes the results of business due diligence, multi-scenario
financial analysis, risk-management assessment, results of third-party consulting
work, background checks (where applicable) and structuring proposals. Our investment
committee requires a majority vote to approve any investment.
Sources:
Medley Management Inc 's official press releases and regulatory filings; CSIMarket.com's supply-chain research; and the financial filings and press releases of other companies cited in this report.
Updated on:
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