Madrona Coast Capital seeks to deliver consistent, robust returns while placing a premium on preserving capital. We perform a comprehensive risk-reward analysis on each potential investment, and only invest in assets and businesses with asymmetric upside and limited downside risk. We are guided by common sense, discipline and the recognition that intellectual humility is the foundation of successful investing.
We adhere to the following core principles:
Buy Below Replacement Cost
Purchase (at favorable prices) fundamentally sound assets that have previously lacked capital, attention or the proper financial incentives.
Utilize Appropriate Leverage
Seek to use the proper leverage (in amount and duration) to reflect the stability of each asset’s cash flow. In certain cases, we secure debt longer than our expected hold period—representing a potential asset upon exit if interest rates rise, as we expect them to.
Construct Diversified Portfolios
Actively manage concentrations of fund capital by diversifying exposures across risk profiles, geographic areas, asset classes and positions in the capital structure.
Align Interests with Our Investors
Treat our investment partners’ capital/assets with the same due care as our own.
Anticipate Micro and Macro Opportunities
Capital flows often influence asset valuations as much as—or more than—the impact of local market supply and demand trends. Madrona Coast Capital works hard to get ahead of capital flows in areas where economic growth is projected to drive tenant demand but new supply is not yet on the horizon.
Add Value to Investments
Madrona Coast Capital’s value creation stems from:
The acquisition of undermanaged or undercapitalized assets that we can stabilize
The implementation of a dynamic asset management plan to improve operating cash flows and position an investment for sale at maximum price upon stabilization
The design of optimal exit strategies that can generate maximum asset value, including an individual asset sale, portfolio sale or public market execution