PRIVATE EQUITY FUND

Providing Financing Options, Investment Opportunities & Growth Platform for Trusted Entrepreneurs, Affiliates & Partners

growth strategy

FUND
FOCUS

Diversified Investment Fund (DIF) enables small and disadvantaged-owned firms, government-focused technology and services entities to leverage the federal market place including the federal small and disadvantaged business programs.

The Fund leverages comprehensive shared services companies for ongoing, competitive & sustainable growth and cost optimization in portfolio assets. These companies offer essential operational services, business development, small business advisory, and M&A support on a sustainable fractional basis.

TARGET MARKETSPACE

CURRENT ROUND BEING RAISED

$50M

TARGET RETURN

AVERAGE TVPI

2.85x

Total Value to Paid-In Capital (TVPI) is calculated by dividing the sum of [total distributions] and [portfolio net asset value] by total [[drawdowns] or [capital calls]]

projected IRR

21%

Total Addressable Market

$50B+

8(a) SET ASIDE CONTRACTS

Data referenced from GovWin

FUND INSTRUMENT

10 YEAR

Unsecured Revolving Lines of Credit

6%

Annual Fixed Interest Rate

49%

Up to 49% of profit of operating entities by way of Risk Premium Fee (RPF)

COMPARATIVE ADVANTAGE

DIF is managed by leadership with a combined experience in: lending to government contractors; operating small and large federal contractors;  managing the federal government’s small business set-aside programs; and scaling IT professional service businesses.

FUND PORTFOLIO

  1. Predictable cashflow from operating entities operations and repayment due to portfolio companies contracting with the U.S. Federal Government, an “A-rated” obligor.

  2. Investments finance a counter-cyclical asset class (Federal Government Spend), leveraged for stimulus measures and supported bi-partisanly for small business emergency capital relief programs.

  3. Niche advantage due to small size and certifications, seeking rapid growth.

  4. Access to federal small business set-asides and direct awards.

  5. Specific certifications and regulatory compliance required for government contracts limit competition from similar commercial loan funds.

  6. New customer acquisition costs are low due to publicly available data on federal contractors.

  7. DIF portfolio companies accelerate growth through M&A with unique strategies:

  1. Seller/owner/operator remains engaged for 3-5 years to support expansion.
  2. Acquisitions minimize cash at close and offer incentive compensation to sellers.
  3. Target 10-15 companies at $5M-$6M each, with revenues of $5M-$15M+.
  4. Focus on non-capital intensive sellers with net profit in the range of 10+%.

PILOT PORTFOLIO

  • Number of Portfolio Companies: 5
  • Average (or typical) tvpi: 2.85x
  • Average (or Typical) Annual Revenue Growth of portfolio companies (Years 1-5): 300%

    • 97% of all single award IDIQ option years and task orders have been extended.

    • Our shared service team brokered the acquisition of two firms with a combined backlog of $8M and within 36 months the single source award backlog for our tribal client increased to over $200M+.

  • Typical contract size and terms: $10-25M Contract (1 yr. base with 4 option periods)

FEDERAL BUSINESS SPEND

2023 – $178.6B

2022 – $162.9B

2021 – $154.2B

2020 – $145.7B

Acquisition growth model

Diversified Investment Fund (DIF) establishes, manages & helps grow its stakeholders, investors & business enterprises along with overall business initiatives

key growth components

INVESTMENT & FINANCING

With financing provided by DIF & the investor funds to kick start the operations.

PROFESSIONAL MANAGEMENT

Our strategy approved partners provide shared support & advisory services, guidance & support to 8(a) companies that successfully executes & helps manage contracts.

SOLE SOURCE & IDIQ CONTRACTS

The process of winning Sole Source & IDIQ contracts with the Federal government is a key to maximize the benefits offered to the tribally-owned 8(a) companies.

PAST PERFORMANCE

As the federal government becomes much more selective on the companies it awards contracts to, establishing past performance becomes pre-requisite for these companies.

acquisition target characteristics

The ideal acquisition target profiles should have the following characteristics:

  • Participant in the 8(a) program, graduate or near graduating
  • Cleared firm is desired
  • Corporate certs are desired such as ISO certifications
  • The first acquisition for a tribal client should be a professional services firm or technology firm with a primary NAICS code in the 54 series
  • The annual revenues should range between $2M – $10M+
  • The owners should be willing to continue running to day to day business unit after the acquisition for a minimum of 5 years
  • GWACs are a plus
  • Firms with a DC presence are desired

OUR TEAM

DIF leverages the broad & extensive financial experience of our team members, their operational experiences & their networks to generate:

RAJESH SHAH

FUND GENERAL PARNTER

  • Exponential growth in 25+ year period in advising dozens of tribal 8(a)s in the full business life cycle & development
  • Has built tribal 8(a) organizations from scratch & scaled to $100M in 5 years.
  • Built a managed services company & successfully sold to a private equity fund at 4x the revenue.

JOHN SHORAKA

FUND GENERAL MANAGER

  • 30+ years experience in government contracting

  • Oversaw the federal government’s small business programs & collaborated with the White House

  • Former Associate Administrator and Regional Administrator at the U.S. Small Business Administration (SBA)

SAIF AHMAD

ADVISORY COMM MEMBER + GP ADVISOR

  • Serial entrepreneur with deep history of successful ventures & exits

  • His last venture, a PS firm focused on driving digital transformation in TMT vertical was acquired for $300M+.

  • Has developed & sold an enterprise social collaboration platform, invested & scaled a CRM and marketing automation platform & taken a PE backed firm thru IPO

MARK ECHO HAWK 

FUND TRIBAL ADVISOR

  • Pawnee Tribal member

  • 24 years experience as Tribal attorney representing Indian Tribes and Tribal businesses

  • Founder of the Echo Hawk & Olsen law firm and manager of the firm’s Indian Law Practice Group

  • 20+ years Tribal 8(a) experience forming and working with Tribal 8(a) firms

JOHN COOK

FUND ADVISOR

  • 25+ years’ experience in government contracting

  • Former President at multiple Tribal 8(a)s

  • Holds board positions, supporting small businesses to meet & surpass annual growth targets through operational & strategic guidance

PATRICK KELLEY

FUND ADVISOR

  • As Associate Administrator for the Office of Capital Access (OCA) at the U.S. Small Business Administration he was responsible for roughly a trillion dollars in loan assets

     

  • Oversaw SBA’s $100B loan portfolio & small business set aside programs

  • Executive Vice President Live Oak Bank for Government Contracting and Asset Based Lending

     

  • Originated over $500 million in business acquisition and asset-based loans for government contractors

ACTIVE INVESTMENTS

Contact us

For all inquiries please email

[email protected]