Cathexis is a multi-strategy holding company based in Houston, Texas. We are the family office of the firm’s CEO. Cathexis’ organizational structure and permanent capital base provides significant advantages, including strong alignment with management teams, a long-term investment horizon, the ability to move quickly, and flexibility with transaction structures.
Given the permanent nature of our capital, we view the optimal hold period for a growing, profitable business to be forever. We believe a hold forever philosophy is in the best interests of our companies, as it allows management and ownership to ignore short term noise and focus on making investments which will strengthen a business’ competitive position 10+ years into the future. Our ambition for each portfolio company is that with a long-term oriented decision-making mindset and a shared penchant by management and ownership to take smart risks, we will be able to achieve exceptional rates of long-term sustainable growth.
Although our ideal hold period is forever, we recognize that many great operators prefer to build and sell businesses, and we are excited to partner with these operators and entrepreneurs as well. Our principal goal is to be good partners with everyone that we do business with. We strive to keep it simple, be straightforward, and be the business partner of choice.
We believe in letting a good CEO run their business with autonomy. If they want advice, we are happy to provide it. But in most circumstances, if you have a good business with a good management team, what we bring is an encouragement to think big, be ambitious, and be tolerant of taking smart risk. We bring a strong balance sheet and liquidity which allows companies to strike when they see opportunities which before our ownership they may never have considered pursuing. We encourage our companies to invest for the long term and not worry about the short-term impact that investments/smart experiments can have on earnings.
Given that we are owned by a single individual, we are extremely nimble, with no boards or committees and the ability to make decisions quickly. We can be highly creative and take risks that are not down the center of the fairway for most investment firms.
We are patient, we wait for “the stars to align” and when they do we like to swing big. We get excited about deals with strong economics, great management teams, and reasonable valuations.
What We Invest In
We are a generalist firm with professionals who have experience in a wide variety of industries (energy, real estate, private equity). Generally, our equity commitments range from a low of $3-15mm+ when funding higher risk projects, to more than $100mm+ when buying established companies or financing the development of infrastructure / real estate.
Within Private Equity; We are looking for more businesses to acquire. We are very open as to what sectors we invest in, our criteria is not sector dependent, but dependent on finding businesses which earn high returns on tangible assets, preferably have strong management in place, and will transact at reasonable valuations.
We have recently (1H 2018) begun to fund early stage VC deals, as we wade into this new sector, our seed stage equity commitments are ranging from $100k to $1mm. In seed deals which end up having exceptionally high growth trajectories, we will consider investing up to $15 million in the Series A.
Disclosed Components of the Portfolio
In 2016 we took private ISG PLC, a ~£2bil revenue General Contractor headquartered in the UK with additional operations in Continental Europe, Asia, and the Middle East.
In 2015 we acquired Hickory Farms, a $150mm+ revenue food gifting business based in Chicago.
We own 2 urban mixed used development projects, both projects require multiple phases of development, and will require 10 to 20 years for full build-out/absorption.
We have a national portfolio of real estate projects where we participate as co-general partners with real estate development firms. We provide pre-development capital/completion guarantees/GP co-invest capital, in exchange for a share of the promoted general partnership economics.
We are a large owner of fee minerals in South Texas. These minerals are within the Eagle Ford Shale trend. We participate in the economics of these tracts via royalties and non-operated working interests.
We participate in conventional O&G exploration projects as non-operated partners. Our primary basin of focus is the Texas & Louisiana Gulf Coast. Both onshore and offshore.