We use fundamental research and two decade of market experience to identify high quality companies that have yet to realise their embedded value. We then work with the leadership team to explore different business levers that catalyse growth, closing the gap between where they are and where they could be. And uniquely, we develop a business narrative that improves their market value and position in society.
Our investments cover micro- and small-cap growth, allowing us to follow a thorough and systematic approach in identifying low-risk returns over the medium to long term. We hold a concentrated portfolio of 6-10 investments at one time, so we can deeply understand how the businesses are performing.
We are looking for unique businesses that meet our four criteria for exponential growth:
Management have ownership and simultaneously accountability
A change in the business that redirects the business on a new long term path
Quality people, culture, innovation, product, balance sheet and governance
A great business, at the right time in the right place
Our proprietary evaluation process begins by examining a company’s ownership structure and incentive programs to ensure they demonstrate strong shareholder alignment and accountability. We partner with companies that prioritize shareholder returns consistently—not just as a distant goal.
We assess four key factors to establish management accountability: current holdings, recent holding transactions, cash remuneration, and stock and option packages. From our experience, these factors must be analyzed within the context of the company, its history, and the track records of individual leaders. Ideally, we look for management teams increasing their ownership in ways that represent a meaningful personal financial commitment, such as purchasing significant stock in the secondary market or opting for larger stock and option packages in lieu of cash.
Red flags in our process include related-party transactions, large cash bonuses, minimal or no ownership by the Board of Directors, and significant sell-offs by management. These indicators often signal misalignment with shareholder interests, which we avoid in our partnerships.
Once we identify companies where management holds significant ownership and is strongly incentivized by stock price growth, we ask, “What has changed or might change in the short term?” From our experience, accountable managers often increase their ownership around key inflection points.
Inflection points mark pivotal shifts in a business and are typically followed by catalysts—clear actions taken by management to drive change. Catalysts are easier to identify and often involve strategic transactions. Examples include capital raising, mergers and acquisitions, asset acquisition or disposal, debt restructuring, or the launch of a new product. These are the levers that signal a company is poised for growth and transformation.
Quality in a business can take many forms—quality management, talented people and a strong culture, exceptional products, a solid business model, and a healthy balance sheet. While few small businesses possess all these attributes, we seek those that demonstrate some of these qualities and, more importantly, recognize their gaps and have a clear plan to address them.
From our experience, organizations with a shared set of values consistently outperform those without them. Values are the foundation of long-term success, yet many leaders overlook the importance of creating, sharing, and refining their value systems. We believe that strong values are essential for building effective teams, and effective teams are the cornerstone of achieving sustainable success.
We have developed a proprietary growth model designed to identify businesses approaching periods of sustained high growth. This model leverages both quantitative and qualitative factors that have historically correlated with strong returns. By analyzing a diverse range of unique data points, our approach enables strategic investments at key business milestones. As a result, our investment timing may often appear counter-cyclical or independent of broader market trends.
