Keefe Ventures’ investment strategy centers on funding-distressed bank rehabilitations. Community banks are of particular interest to the Keefe Ventures portfolio because of their track record of outperforming both larger banks and the S&P 500 and their ability to show marked increases in value with small, high-yield, high-risk loans. The geographical area served by community banks is of utmost relevance to their success, and gauging the growth potential of the local market is a significant step in Keefe Venture’s valuation process. Typically, Keefe Ventures will invest its managed funds in five to ten institutions and maintain the fund for a period of three to five years.

Key steps in the Keefe Ventures Investment Strategy are:

  1. Identify well-located, relationship-oriented, market-unknown banks.
  2. Determine the bank management’s capacity and desire to court attention within the investment community.
  3. Determine the bank’s “tangible book value.”
  4. Make a substantive investment (sometimes with other professionals) at less than, or near, tangible book value.
  5. Monitor the bank’s progress, advising the bank management as necessary.
  6. Harvest when the bank is sold in its entirety.
  7. Harvest at market, if market prices reach or exceed average levels.
  8. Return harvested funds to the Limited Partners as they are received.