WCAS targets approximately 20 portfolio company investments per
Partnership. We purposely construct diversified, risk-adjusted
portfolios, believing that the best risk-adjusted returns result
when a portfolio is diversified by time, industry, thematic
concentration, stage of investment and economic sensitivity. An
exploration of WCAS XI demonstrates this diversification across a
number of facets.
- Time diversification - Consistent deployment of capital
mitigates vintage year risk.
- Industry diversification - The Firm targets an equal allocation
of capital between WCAS's two target industries: technology and
- Thematic concentration - WCAS XI investments capitalize on
various themes within our industry subsectors, such as growth in
global online payments; demand for technology protection services;
increasing need for cloud-based security services; leveraging
technology in the dental lab industry; need for behavioral
healthcare; and increased focus on customer satisfaction in
hospitals. Additionally, the Firm typically limits portfolio
exposure to any single investment to 6%-9%.
- Stage of investment - The WCAS XI portfolio is well diversified
with six buyouts, seven growth equity investments, five
buy-and-builds and two small alpha investments.
- Economic sensitivity - WCAS XI is primarily invested in
industries with moderate or low economic sensitivity.