How we do it
Forty Fold Capital acquires essential service businesses in the Southeastern United States. These are the companies that keep infrastructure running, properties maintained, and communities functioning — HVAC, electrical, plumbing, roofing, landscaping, and specialty trades. Demand is non-discretionary. Customers do not defer a broken AC unit or a failed electrical panel.
The target is specific: businesses generating $1–10M in revenue and $300K–$1M in EBITDA, with clean financials, an established customer base, and an owner approaching transition. These businesses are too small for traditional private equity and too complex for most individual buyers. That is precisely where the opportunity sits.
Acquisition criteria
The firm pursues control or full ownership exclusively. No minority positions. No passive participation. Every acquisition must meet a minimum debt service coverage ratio of 1.25x under conservative assumptions, with a capital structure of 75% debt and 25% equity. Add-backs require written justification. Financials must reconcile between tax returns and profit and loss statements. Customer concentration above 25% for any single client is a disqualifying condition.
These standards exist because discipline at entry is the primary risk management tool. A business that cannot survive a 20% revenue decline under our underwriting does not get acquired.
Value creation
Acquisition is the beginning, not the thesis. The value creation thesis is operational. Within the first 100 days of ownership, the firm implements the Forty Fold Operating System — a structured program targeting financial reporting, pricing discipline, cost structure, systems implementation, and leadership alignment.
Most small service businesses are underpriced by 10–20%, operate without job costing systems, and have never had a formal monthly close process. Correcting those conditions without disrupting operations is the work. Every dollar of EBITDA improvement at a 4x exit multiple creates $4 of enterprise value. The math is straightforward. The execution is not.
Structure
Each investment is executed through a dedicated special-purpose vehicle. Partners hold direct co-ownership in a single operating company. There is no commingling of capital across deals, no blind pool, and no cross-collateralization. The firm's principal invests in every transaction alongside limited partners, with full economic alignment and accountability.
The target hold period is 5–7 years. Distributions are made when cash flow, reinvestment needs, and capital reserves support them. The strategy is designed for partners who understand that patience and operational discipline — not leverage or timing — are the real sources of return in this market.
Investments are available to accredited investors only. Nothing on this page constitutes an offer or solicitation. Past performance is not indicative of future results.