Investment Guidelines

Comstock’s guidelines enable us to focus clearly and to bring consistency and internal vigor to our investment decisions.

  • Superior returns: The prospective returns have to be commensurate with our opportunity cost and with the resources (capital and human) invested. We prefer to invest in businesses whose margins are at or above the industry, or which have the potential to achieve superior margins.
  • Risks: The potential risks must be identified and controllable. The risk return tradeoff is the fundamental underpinning of our investment. We invest only in established businesses and do not fund early stage companies. We consider the downside carefully, as well as the upside, in making an investment.
  • Fit with experience: The business should fit within what we know well. One of the key strengths we bring as operators is the ability to help transform businesses either by working with existing management or, by undertaking the ongoing management of a business. Without the ability to apply insights on how to transform a business and take it to the next level, we are unlikely to proceed with an investment. In many instances, information technology offers opportunities to transform the deliverable, but solid marketing, branding and changing the rules of the game are other ways to make a company an industry leader.
  • Exit: There must be at least one well defined exit. As private equity investors we generally have a 3 to 7 year horizon for any investment. However, also have a separate of “patient capital” that is willing to invest for a longer period.
  • Large/New Markets: Businesses which have identified and can successfully be marketed to significant and profitable targeted customers. We offer our international experience to open new markets and to understand the foreign competitive challenge. In addition, we employ expertise and relationships to reduce costs through overseas outsourcing.
  • Western US focus: Our investment strategy is to focus on the Western US, because it is predominantly a “middle market economy”, which offers potential for superior growth and the ability to shape a company’s future.