Acerca de
Our Strategy
Private equity investing - in public companies
Public markets offer the opportunity to buy a large variety of companies at optional prices.
For the investor, this is a great advantage. We invest in companies, based on a three-pronged strategy.
1. Analytics
Of prime importance is a solid fundamental quantitative and qualitative analysis of each considered company.
​
We select our companies based on the following criteria:​​
​
-
Pricing power / scaling power
-
Steadfast growth
-
Consistent margins
-
Strong returns on invested capital
-
Founder-led / owner-oriented management
-
Healthy balance sheet
-
etc.
Companies with these attributes are screened for primarily in Europe, USA and UK.
​
We then analyse at least the following for a minimum of 5 years' data:
​
-
Income Statements
-
Balance sheets
-
Cash Flow Statements
-
Management Conference Calls
-
Shareholder structure
-
Share count dilution
-
10-K's
-
10-Q's
-
8-K's
-
IPO Prospectus
-
etc.
​​
All this data is compiled and referenced for crosscheck along our proprietary investment checklist.
If a company meets all the required standards, the company becomes short-listed and we evaluate a potential pricing disagio.
2. Discipline
​
No matter how strong a company's qualitative strengths are, it is not worth an infinite price. Pricing discipline is of utmost importance. It is very tempting to invest in a company when it's prospects and inherent qualities are very exciting, yet buying at a too high price will inevitably hurt future investment performance.
To keep rationality firm in place, we generate a Discounted Cash Flow model for a short-listed company (always assuming a degressive growth rate) with emphasis on it's free cash flows, which are discounted at a range of reasonable interest rates over time, out of which a fair value is derived. Selected companies are then ranked in function of their price-to-value.
When, and only when, a company's share price falls within our estimate of value, we consider the company as purchasable and will act decisively, however not all-at-once: the more prudent course of action is to invest in several tranches, thereby lowering your average purchase price.
3. Longevity
​
Analysing and buying a company over time, however lengthy, are only the first steps. Keeping a company in possession as it's stock price fluctuates wildly requires patience; a lot of patience. We keep our eyes on the far horizon and aim to keep each company in our portfolio for at least 5 years.
As Ralph Waldo Emerson famously said: "Knowledge is the antidote to fear". Therefore we focus on the operating results of our companies. If the companies perform well, their share price will eventually follow suit.
​
Moreover, the compounding effect simply requires a long period to mature and grow. More time (years not weeks) allows for more compounding of results and should never be interrupted unnecessarily.
To be successful in stocks, one must have the vision to see them, the courage to buy them and the patience to hold them.