Patient capital is a virtue right up to the point where it becomes an excuse. Three markets we looked at and did not enter have since moved decisively against a buyer, and it is worth being honest about what that cost.
The pattern
In each case the reasoning at the time was defensible: the regulatory position was unclear, the operator was unproven, the price implied a growth rate nobody could underwrite. In each case we were right about the specific risk and wrong about the direction of the entry price.
- Entry multiples rose while we waited for clarity that arrived eighteen months later.
- The best operators were taken by someone with a higher tolerance for ambiguity.
- The assets that remained available at our price were available for a reason.
Waiting is a position. It has a carry, and the carry is paid in opportunities you no longer get shown.
What we changed
We now distinguish between two kinds of unknown. An unknown that time will resolve is worth waiting on. An unknown that only operating will resolve is not — waiting produces no new information, it just makes the same decision more expensive.
That distinction has moved two of our last four investments earlier in their cycle than our previous framework would have allowed.