Philosophy

What we buy, and how we get comfortable owning it.

Investment thesis

Two routes to undiscounted change, and the compounders we hold for the long run.

1Undiscounted change

Where our reading of a business varies from the market's — value that is mis-appraised or misunderstood, and in transition.

A · Businesses in transition

  • Business character shift — B2B to B2C
  • Restructuring, demergers, spin-offs
  • Import substitution
  • Improving regulatory environment

B · Management in transition

  • Change in motivation and behaviour
  • Improving governance
  • Optimised capital allocation
  • Generational change

What it yieldsAsymmetric long-term prospects

2Long-term compounders

A rare combination of quality, bought to own for the long run.

  • Long runway for growth
  • Strong moats
  • Superior execution
  • Highly cash-generative business
  • Sensible capital allocation

What it yieldsBetter returns with lower business volatility

Time Willingness to pay for every dollar of potential return rises as we move from left to right
Exit strategy Target price achieved · Thesis breaks
Underlying compounding engine

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