Barrel Rate Capital seeks an outsized multiple of capital by partnering with sponsors who find proprietary opportunities and structure them with real downside protection.
Approach
Returns in the private markets do not persist. Managers that outperform when small tend to give back that alpha as they scale.
So we stay where the inefficiency is: small-cap and emerging managers, primarily in the United States, with opportunistic exposure to other developed markets such as Europe.
We partner with general partners and independent sponsors who are able to identify proprietary opportunities, structure transactions with downside protection, and capture excess returns by growing their companies to a scale where market efficiencies produce excellent exit prospects.
These dynamics exist independent of market cycles or debt availability.
Strategy
Returns in the private markets do not persist. Managers that outperform when small tend to give back that alpha as they scale.
So we stay where the inefficiency is: small-cap and emerging managers, primarily in the United States, with opportunistic exposure to other developed markets such as Europe.
We partner with general partners and independent sponsors who are able to identify proprietary opportunities, structure transactions with downside protection, and capture excess returns by growing their companies to a scale where market efficiencies produce excellent exit prospects.
These dynamics exist independent of market cycles or debt availability.
Fig. 2 — The investment overlap
sourcing
downside
exit
Off-market access through long-held sponsor relationships.
Preferred terms and minimal leverage protect the base case.
Growth into an efficient buyer universe at exit.
Team
Jefferson Stone
Jeff leads the firm’s investments and operations, and has worked in the private capital markets since 1997. He helped shape Probitas Partners’ pioneering secondaries market-making program and spent nearly a decade on the investment team of the William & Flora Hewlett Foundation, overseeing private equity and alternatives commitments of over $3 billion. Since 2015 he has served on the Board of Axiom Asia Private Capital.
MBA, The Wharton School — Palmer Scholar and Siebel Scholar. B.A., UC San Diego, Magna Cum Laude. Former instructor, ILPA Due Diligence Module.
LinkedIn →Firstname Lastname
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A player’s Barrel Rate is the strongest predictive Statcast measure when forecasting future home runs.
For a baseball to be “Barreled,” a batted ball requires an exit velocity of at least 98 mph. At that speed, balls struck with a launch angle between 26 and 30 degrees always garner Barreled classification; for every mph over 98, the range of launch angles expands.
We take limited data, analyze it rigorously, scour the market to evaluate and understand the competition, wait patiently for the perfect pitch, and then give our investors the best chance to hit a home run.
Fortunately, we are allowed an unlimited number of strikes before we choose to swing.
Contact
Let’s connect.
For sponsors seeking capital and limited partners evaluating the strategy.