“If you can’t describe what you are doing as a process, you don’t know what you’re doing”
W. Edwards Deming. Our investment process is not a neat step by step procedure but rather a dynamic web, as the discovery of certain information will cause a revisit of a particular step. |
Origination
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Each opportunity originates from relationships held by the Manager, sourced from a network of global partners. Discussion about the investment opportunity with our trusted partners alongside our own judgment will form the first filter in determining whether or not to arrange a meeting with management.
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Assess Macro & Market Factors
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No matter how good the ship and its crew are, the tide is still the tide, which is why we consider macro and market factors when assessing an investment. This includes speaking to our network and corporate relationships. This is important in the event of an investment that is relatively illiquid, and which may rely on a future liquidity event to realise its value.
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Meet With Management
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Meeting with management is essential as it provides us with the opportunity to ask detailed questions, breakdown the business model, understand its key drivers and assess the capabilities of management. This involves detailed questions relating to historical performance, personal objectives, remuneration policies and the business. Subsequently, we investigate through our networks to ensure management are well-regarded and ethical.
This is a key step for us as we seek business run by competent management that is resilient, responsible and hungry for long-term success rather than driven by short-term incentives. |
Due Diligence
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This comprises fundamental research into the business and the industry in which it operates. We model out the key drivers of the industry and how they impact the business in question with a focus on the economic model the business uses to generate revenues (or will look to potentially generate revenues). The health of the business is assessed from both a financial and non-financial perspective and a valuation is derived based on our modelling.
We analyse the potential benefits and risks associated with key drivers of the business. All the risks from business specific to the macro economic environment drivers are examined with a focus put on business specific risks. We rely on publicly available information as well as engagement with stakeholders (customers, competitors, employees, major shareholders, etc etc). |
Financial Analysis & Valuation
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This involves a qualitative assessment of how the above due diligence factors stack-up together. We prefer investment opportunities that deliver asymmetric returns to the upside - that is, little risk, for a potentially attractive return. We aim to deploy capital into investments that are undervalued with a significant margin of safety.
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Monitor Investments
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We retain close and regular interaction with all stakeholders involved in each investment. It is important to reassess investments constantly, in response to updated news flow. Moreover, we believe it is important to apply a consistent framework of analysis, and to maintain a disciplined approach in accordance with the objectives of the Fund.
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