Industry Thesis Development

intermediary profile

July 13, 2019

by an intermediary from The University of North Carolina at Chapel Hill - Kenan-Flagler Business School in Nashville, TN, USA

What is inside a good search fund’s industry thesis? I’ve seen PPMs with broad narratives as to why identified industries are strong areas for search but how granular should you go?

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commentor profile
Reply by a searcher
from Temple University in King of Prussia, PA, USA
Hello Joseph,

I kept a relatively broad industry thesis within my PPM. After circulating my PPM, I wish that I spent a little more time diving into industries of interest. To make up for the personally perceived oversight, I have conducted additional industry memos with related investment thesis. It helps me in letting investors know how I can quickly size up an industry. You will also get to test your assumptions as you kick around industry theses. I would keep the thesis consistent with your overall investment philosophy.
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Reply by an intermediary
from The University of North Carolina at Chapel Hill in Nashville, TN, USA
Thanks! Do you generate any sort of pro-forma, LBO model, or P&L statement to go along with it to demonstrate the assumptions you have about the industry and potential businesses within it?
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