Lead Left Interview – Jason Block & Fred Buffone (Part 2)

This week we continue our conversation with Jason Block, partner and chief investment officer and Fred Buffone, principal, of Freedom 3 Capital. F3C provides tailored junior capital solutions to middle market companies by providing a combination of junior capital securities to generate current income and capital appreciation. Second of two parts – View part one

The Lead Left: Who is your biggest competition?

Jason Block: We don’t seem to run into the same people very often.  Other funds focused on non-sponsored investments show up from time to time as do the mid-sized BDC.  In general, the company is only speaking to two or three people in a process.  However a consistent source of competition is the transaction not happening. The owner may want to buy out his brother, but it doesn’t have to happen. He might want to buy the local competitors, but if he doesn’t, he still has a great business.

TLL: Aren’t non-sponsored deals challenging?

JB: All investments are challenging.  But with non-sponsored companies, you do your own work. That’s both a plus and a minus. We commission exactly the kind of third party work we want, rather than just accept what a sponsor is ordering. Timing to closing is significantly longer. We often have to spend a lot of time and money on due diligence.  But in the end,