OUR PHILOSOPHY

Our investment process involves a fundamental based and first-principles approach to the analysis of predominantly small and micro-cap companies whose economic prospects are shaped and influenced by certain thematic metastrategies.

Structural Shifts

We believe that the forces of technology, social awareness and democratisation are accelerating at a rapid pace. These forces are shifting the way we do things, and the way consumers relate to the companies from which they buy goods and services.

It is our opinion that the market is generally slow in understanding these structural shifts, creating mispricing in equities. This dislocation presents us with opportunities as long-term investors.

The structural shifts we seek to exploit for our capital partners are caused by various factors, including:

  • Economic

  • Social

  • Technological

  • Spending changes by channel

  • Regulatory

  • Globalisation

 

These shifts have direct and indirect beneficiaries. Think of the revenues and market capitalisation of the financial services industry, from banks to other firms that may have benefited directly or indirectly from financial institutions over the last century. There are significant structural shifts at play in this sector. The same applies in many sectors including bricks and mortar commerce, media, IT infrastructure, transportation and the energy sector to name a few.

 

Economic Alignment

We believe in the correlation between organisational performance and the economic alignment of those tasked with the stewardship of an organisation – when structured towards long-term value creation.

We are particularly interested in founder-led businesses but are also interested by events including director or manager purchasing, particularly on a downward trend, and changes in substantial holdings.

 

Self-propulsion

We are excited by businesses that have powerful self-propulsion characteristics. They provide a dynamic investment opportunity and give us a margin of safety in our investments.

We love companies growing at impressive levels, on all the key metrics, that can continue to grow considerably without large effort. Some of these self-propulsion forces include:

  • Network effects.

  • Maturity to “run rate”.

  • Sticky products that lead to add-on/plug-in spending.

  • Increased utility.

  • User aggregation.

  • Scale economics.

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