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At Hudson Hill Capital, our portfolio companies view the Go-to-Market strategy as the cornerstone of their success. While many companies perform certain aspects of the GTM function, high-performing companies distinguish themselves by embracing a comprehensive GTM strategy. Comprehensive GTM focuses on creating sustainable revenue growth by integrating sales, marketing, customer insights, channel strategy, and sales enablement.

At Hudson Hill, we observe that the ability to translate strategic priorities into clear, actionable financial plans is a critical differentiator within our portfolio companies. As a result, we view budgeting as more than an annual exercise of selecting financial targets, but rather a strategic discipline that directly influences investment outcomes. We believe that budgeting should give rise to a detailed set of actions for the year, enabling businesses to allocate resources efficiently, track performance, and remain agile in response to market dynamics.

Each year, we take time to reflect on the economic and capital market conditions that impact Hudson Hill’s portfolio companies. This year’s review represented an interesting moment in time, as our Leadership Summit coincided with the start of a new administration in the United States, which will lead to significantly altered conditions in each of the markets we reviewed. Nonetheless, a grounding in the current macro environment provides helpful framing for business decisions made every day in our companies.

Over the last fifteen years, zero interest rate policy (ZIRP) altered capital markets by impacting discount rates, which created a competitive advantage for private equity firms relative to other buyers of assets. This competitive advantage derived from the fundamentals of asset pricing — discounted cash flows (DCF) — which discounts free cash flows by a weighted average cost of capital (discount rate).

In 2022, Edward Chancellor published a book called The Price of Time, which chronicles the historical relationship of economic activity with interest rates. The conclusion of the book is that low interest rates reduce labor and capital productivity by reducing the threshold for efficiency in the deployment of capital. Chancellor observes that long periods of economic malaise tend to follow periods of capital excess.