Introducing Execution-Based Finance (EBF): Capital Rental Efficiency
Most fund managers operate on a model built around hoarding assets under management (AUM), locking in capital over long windows—often months or quarters—under the premise of long-term appreciation.
This structure prioritizes capital retention over capital productivity, delaying cash realization and reducing agility. In contrast, the model presented here is built on rented capital, where we access capital temporarily to generate short-duration, high-frequency cash flow through execution edge.
It reframes EBF as a cash flow oriented, not an appreciation play.
By optimizing for realization latency, this approach transforms unrealized gains into predictable income within compressed timeframes—often within days, not months—disrupting the AUM-centric logic of traditional fund models.
The edge is not in the capital itself, but in the ability to convert that capital into cash with speed, precision, and repeatability.
Execution-Based Finance rejects the passivity of asymmetrical investing in favor of structural symmetry and engineered cash flow. Rather than waiting years for a business’s free cash flow to compound, it dynamically enters market setups designed to generate cash flows within seconds or minutes.
This approach transforms capital from a passive asset into an active operator—better aligned with the demands of modern markets: liquidity, risk control, and velocity.
Put simply, instead of waiting for FCF yield to eventually reward your investment, you manufacture yield by tactically entering and exiting markets during windows where the probability distribution tilts in your favor.
In traditional investing, you buy discounted cash flows.
In execution-based finance, we become the cash flow.
Capital Rental Efficiency = (Realized Cash Flow) / (Capital at Risk × Time)
