One Page Investment Memo
Hi All,
I’m I the final stages of interviewing with a fund and asked for a one pager on an idea I think is interesting. I wasn’t given any parameters on what that one pager should include or how it should be structured. Can you please help me with an example?
Thank you.
my fund sometimes uses a one pager... I would definitely include a quick section on your comment on the biz / industry and what the quality of that biz is, a section on valuation obviously where you comment on what you're recommending, a section on catalyst where you define your catalyst and timeline for your thesis to play out. Depending on the fund's mandate you might want to put some specific stuff in a separate section
https://www8.gsb.columbia.edu/valueinvesting/resources/newsletters
Click on the newsletters, there are write-ups in there. Most are 2-3 pagers, but you get the idea.
What's the fund strategy?
I present a lot of ideas as a one pager and do the below.
Capital structure / security pricing with summary financials (2-3 years historical and then quarterly build to LTM. Financials are maybe some key revenue drivers but revenue -> EBITDA -> FCF bridge and summary credit statistics) to take up the first 1/3 to 1/2 of the page.
3-4 sentence investment thesis. This is the hardest part as you’ve got to basically explain the business, KIFs, valuation / asset coverage, thesis and catalyst and upside / downside expectations.
Return expectations (base / upside / downside).
Catalyst timeline and key dates.
Is a very effective format I’ve adopted for event-driven / distressed ideas but I imagine it can be applied to other strategies as well. This is with narrow margins and about 9/10pt font.
Agree with this but have a few sentences above the financial summary with business summary e.g. how the business is broken up and where most revenue comes from e.g. "The Company derives revenue from product sales in online (80%) and brick and mortar (20%) with three categories wet food (42%), dry food (34%), and supplements (24%)" (1/5 page)
With industry analysis (1/5 page)
Financial summary (very, very brief e.g. YoY sales growth last 5 years and EBITDA) , with valuation (1/5) page
And like how the above have said do a thesis/ drivers section Id say put a table with bullets split down the middle: pros and cons on either side, with 3-4 bullets each (bottom 2/5 page) that you can expand on thesis and parts of what underlies valuation
From what it sounds the idea isn’t to be fully actionable but rather initial diligence and pre doing full diligence on it. More like a teaser and whether more time should actually be spent on building a full investment thesis and model on it (which if so I would go with my breakdown vs poster above is more if you do a lot more diligence maybe).
But share more details if you want more specificity. Pros / cons can also be upside downside for example.
I think something like this would be good:
Spend the majority of the one pager outlying bullets where you are differentiated and why. For example:
Should probably have at least 3-4 of these in the pitch. In the beginning, have some kind of executive summary. One sentence on what the company does, summary of your thesis, upside downside px targets, and risk reward. If want extra brownie points a quick sentence on positioning/sentiment would be nice too.
The point of a one pager is to show you can take what really matters and put it on a page. It's crazy how many people will spend half a page summarizing what the company does in a write up, when chances are 1) the analyst/pm knows the company well and 2) that is 0 value add. Should always be asking if what you wrote will help your pm monetize.
Emphasizing the above...its shocking how much "fluff" and non-value add content can be in a single sentence. Re-read each sentence and keep cutting down fat until the point is succinct. Think about the point each sentence is designed to convey to the reader. It is entirely possible to communicate what the Company does and relevant developments / things that matter in a maximum 1 sentence, I don't think a business overview section is necessary. If your sentence is longer than 20 - 30 words you are not being precise enough.
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