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About Search Funds
A model where investors support entrepreneurs to
find, acquire, and grow a profitable SME.
What are Search Funds?
A Search Fund is a unique investment model where aspiring entrepreneurs, known as "Searchers," raise capital from investors — typically high-net-worth individuals or experienced entrepreneurs.
This capital is used to actively search for, acquire, and operate an existing small to medium-sized business with strong growth potential. Investors play a pivotal role in funding the search phase, supporting the acquisition, and benefiting from the operational improvements led by the searcher post-acquisition.
The goal is to grow the business, improve its value, and ultimately achieve a successful exit, maximizing returns for investors through the distribution of the proceeds.
Why invest in
Search Funds?
Small and medium enterprises (SMEs) make up the majority of firms and employers globally, yet an estimated 67% lack succession plans, according to recent BBVA data.
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With 41% of global SME business owners aged 59 yers old or above, as reported by the World Bank in 2023, this presents a significant investment opportunity.
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Search Funds offer investors the chance to connect with well-performing SMEs that are primed for growth, by pairing these businesses with highly skilled and energized leadership talent.
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Investors can actively contribute to and benefit from the next phase of growth for these businesses, turning this widespread succession gap into a strategic advantage.​
Search Funds have thus emerged as a prominent trend in Private Equity and Venture Capital.
Over three decades, Search Funds have been outperforming traditional classes of investments with an aggregate IRR of 28%.
The growing popularity of Search Funds can be attributed to their perceived lower risk compared to traditional startups or early-stage ventures.
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The operational expertise of Search Fund entrepreneurs plays a crucial role in enhancing the value of acquired businesses, driving improved operational efficiency and growth through their industry-specific knowledge and hands-on approach.
For investors, a key advantage lies in the alignment of interests between them and the entrepreneurs. Searchers typically have a significant personal financial stake in the success of the business, ensuring strong motivation to create value and achieve positive outcomes that benefit investors.
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​The typical holding period for a Search Fund investment ranges from 4 to 7 years, allowing ample time to implement growth strategies and navigate post-acquisition challenges. This timeline can vary depending on the company’s growth trajectory, economic conditions, and the strategic goals of both investors and the entrepreneur.
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The personal goals and circumstances of the Search Fund entrepreneur also impact the holding period. Whether it’s the searcher’s readiness for a new challenge or unforeseen personal factors, these can prompt a sale.