Philosophy

J.F. Lehman & Company (“JFLCO”) pursues an exclusive and consistent focus on investing in companies in the defense, aerospace and maritime industries and the technologies that originate from them. JFLCO’s unique relationships and specialized knowledge enable the firm to intelligently address these markets, which are large, complex and have consistently expanded over time.

The U.S. and U.K. defense markets are joined by long-standing strategic and cultural alliances and together represent approximately $660 billion in current annual spending across thousands of companies. The adjacent commercial aviation and maritime markets are roughly equivalent in scale and are expected to continue to benefit from established secular growth trends (and remain subject to increasing levels of regulation).  JFLCO’s target markets are further expanded through the firm’s ability to address companies whose defense, aerospace and maritime-based capabilities have additional government and commercial market extensions.

Within these targeted segments of the industry, JFLCO seeks companies that exhibit key attributes including but not limited to:

  • Market leadership positions protected by unique engineering and technical capabilities;
  • Products and services that adhere to and are driven by demanding performance specifications and strict qualification and regulatory requirements and certifications;
  • Designation by customers as the sole approved source of supply (or one of two);
  • Balanced mix of business across programs in early stage development, full-rate production and aftermarket support;
  • Long-term contracts that create significant revenue backlog, which provide strong earnings visibility;
  • Evidence of customer funding for research and development activities; and
  • Potential for commercial extensions of government-developed technologies and services (and vice versa).

Importantly, companies that JFLCO targets may not be realizing their full potential. These businesses often have well-established product offerings and are leaders in certain or all their markets but lack the human or capital resources required for further growth.

The firm fully supports each investment with substantial internal and external resources and independently evaluates each company from origination through exit to identify opportunities for creating value in concert with our management partners. JFLCO views capable, committed management as a company’s most valuable asset. Accordingly, we firmly regard management as our partners in each transaction.

JFLCO utilizes a strict process to ensure that every investment leverages the experience and knowledge of the principals and meets the firm’s rigorous criteria and strategic focus. This disciplined investment process has four basic stages: origination, acquisition, ownership and realization. Application of the firm’s specialized skills and expertise at each stage of the investment process enables the firm to identify attractive business attributes, develop specifically tailored strategies to create value and successfully execute these strategies.

The firm has consistently employed this clearly defined investment philosophy since inception. Consequently, in evaluating and making investments, the firm responds quickly to minimize disruption to operations and eliminate employee uncertainty.