It is best to consider our structure in the context of a royalty streaming model. There are a wide range of “royalty” type models in the public market from resource focused to consumer oriented businesses. The common element to these businesses is that they derive their revenue typically by acquiring a revenue stream from other businesses.
The Lorne Park Capital Partner’s model draws on this “tried and true” approach with some modifications for use with Investment Management and Wealth Advisory firms. In our model, our Partners retain full control of their day to day business operations while gaining a partner that can help them continue to grow. Our assistance comes from providing financial capital as well as potential alignment between Investment Management and Wealth Advisory Partners.
Our structure involves us acquiring a material interest in the Partner firm. This can provide a degree of liquidity to major shareholders and assist in their succession plan. In acquiring this interest, we participate in the revenue that the Partner firm produces. This is in effect a royalty.
By structuring our model in this fashion, the Partner firm gains all the benefits of new capital and resources from LPCP without the loss of control. The firm’s management team continues to manage their clients and their portfolios just as they always have. Any additional profitability that results from growth and/or cost management accrues to the Partner’s management team.