Why We Started Palingen
We started Palingen to prove a simple yet profoundly compelling thesis: that financial returns and human flourishing are synergistic over the long term.
We certainly had seen some evidence to the contrary in our combined 40+ years in business - rents raised so aggressively that people lost their homes, principal and job loss from using too much leverage to squeak out an extra dollar, highly capable employees gone due to cultures that treat them like machines - the list could go on. But we had also seen glimmers of hope, both in our own work - untapped potential realized when we intentionally worked on employee development, radical transparency with investors, families restored by choosing a payment plan instead of eviction - and in the histories of world-class companies like Hershey Chocolate and Guinness Brewing that cared for their people in radical ways.
So is it really true, as seemed to be the norm, that in search of the almighty dollar there has to be some collateral damage along the way? Or, as in a few but compelling examples, is it possible that the same, if not better, financial results could be achieved while loving and serving everyone along the way?
It's a question that we have been wrestling with for years. Having been fortunate enough to study and work at some of the best schools and institutions in America, we fundamentally believe that as investors, we are responsible for creating a fair return on any dollar entrusted to us. At the same time, informed by our faith and our calling to love others more than ourselves, we are only interested in spending our time and resources on endeavors that truly better the lives of the people involved.
“We are only interested in spending our time and resources on endeavors that truly better the lives of the people involved”
Rather than feeling stuck between a rock and a hard place, we decided to prove that these aren't conflicting ideas at all, but rather different sides of the same coin. We believe that strong economic performance leads to greater capacity to make a positive impact on people, and that thriving people who feel loved and valued lead to better financial returns for the companies they work for, shop from, sell to, live near, and invest in. And Palingen is the vehicle we are going to use to prove it.
Early on, we realized our company needed to be structured in a way that would allow us to make decisions based on long-term impact. We firmly believe that investing deeply in people will lead to better economic returns, but it often takes time to see the full return on investment. We didn't want to be short term flippers of businesses, but rather long-term owners that steward businesses and care for people with the goal of long-term value creation.
Which is why we are structured as an evergreen holding company. As an evergreen holding company, Palingen makes long-term investments in great companies and stewards those companies for years to come by making decisions based on long-term value creation for all stakeholders.
“As an evergreen holding company, Palingen makes long-term investments in great companies and stewards those companies for years to come by making decisions based on long-term value creation for all stakeholders”
But just as important as what we are is what we are not:
We are not traditional private equity - we don’t buy and flip, we build long-term, compounded growth through extended hold periods; we are never forced to sell based on fund timelines; we use conservative leverage; we emphasize free cash flow generation; and we focus on creating value within the companies we own, not on raising the next fund.
We are not an ESG platform - While we admire the spirit behind the ESG (Environmental, Social, and Corporate Governance) investing movement, what we care about most is flourishing families, healthy minds, strong bodies, fulfilled spirits, engaging careers and thriving relationships for all the humans touched by Palingen.
We are not impact investors - we are not a concessionary fund, and we are not asking our investors to accept sub-par economic performance because we are also “doing good.” On the contrary, we believe that over time our investments should perform better because we are prioritizing people in addition to financial metrics.
“We are Palingen - an evergreen holding company that acquires businesses from legacy-minded owners, invests deeply in the people, strengthens the operations, and stewards the companies for the long term”
We are not traditional PE, ESG, or impact.
We are Palingen - an evergreen holding company that acquires businesses from legacy-minded owners, invests deeply in the people, strengthens the operations, and stewards the companies for the long term.
We are a Team - a team of investors able to make high quality investment decisions with deep, thoughtful, and disciplined analytical skills developed at top institutions.
And we are all about People - using the tools of the marketplace to love and serve everyone that our company touches and prioritize all human stakeholders as a foundational element in creating long-term value:
Employees - by valuing their physical, emotional, mental and spiritual health and deeply investing in them as the most important part of our businesses
Sellers - by stewarding their legacy, caring for their employees, and loving them through a significant transition requiring wisdom and partnership
Investors - by making good investment decisions and creating strong financial returns without unnecessary risk through mission-aligned investments in which they will be proud to take part
Partners - by inviting them into what we are building, leveraging their expertise, and supporting their own goals, interests and/or ministries
Customers and Communities - by running our businesses in a way that adds tangible value and creates positive externalities
Over the next few months we will be sharing a series of articles diving deeper into how we intend to love and serve each of these stakeholders, both philosophically and practically. We will also be sharing more about each of us personally - who we are, what motivates us, and why we decided to leave our former careers and band together to bring Palingen to life.
Thank you and please reach out to learn more.
Tuesday April 13, 2021