Are there dividends for Investors during the operation/before any exit?

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July 30, 2020

by a searcher from Purdue University in San Pedro Garza García, Nuevo Leon, Mexico

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Reply by an member
in Staten Island, NY, USA
I am a student so don't take this as a grain of salt. If you are a traditional search fund you might have a bond that would provide a coupon to the investor. This coupon could be considered as a dividend during operation. If you are able to be self funded then your investors will probably not get a dividend unless they request it in the terms. Again this is my thought from what I have read about search funds.
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Reply by a searcher
from Johns Hopkins University in Washington, DC, USA
This sounds deal specific. IMO, part of the answer would be what funds as part of equity are needed to execute on your strategy. The second part answer is what are the expectations of your investors. If they expect a coupon then that would be a driver in your acquisition strategy. Generally, the longer the hold period the more likely C0C will factor into the return profile.
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