The Company has adopted the following investment strategy:
The Company proposes to primarily invest in businesses or in assets located in Zimbabwe. To the extent that value opportunities exist and attractive returns can be achieved, investments will also be considered in the Southern African region.
Type of investment
The Company proposes to invest in real estate assets, equity, quasi-equity or debt instruments that may or may not provide shareholding or management control. Investments may be made directly, through special purpose vehicles or trust structures or in joint venture with a partner.
Dislocation of value
In the identification of investment opportunities, emphasis will be placed by the Company on seeking out value propositions, with a view to finding, unlocking and extracting embedded real value.
The Company will target investments that it considers, at the time of investment, are likely to generate a minimum project IRR of 25% (excluding interest bearing and cash management investments).
The investment criteria to be adopted are:
emphasis on investment in cash generative businesses;
ability to influence the business at a board level, with the Company’s and the Manager’s executives adding structuring and financing expertise to the management of the business, as well as significant industry and relationships and access to finance;
ability to work alongside a strong management team to maximise returns through accretive acquisitions, revenue growth and the optimisation of cost control and customer issues;
investing in business with a clear growth potential; and
focus on the creation of intrinsic value through restructuring of the investment or trade sale to complimentary businesses.
The Group will seek to establish an appropriate risk adjusted point of entry into a capital structure. The Company may choose:
to invest in equity in order to allow management partnerships and participation in a position of influence usually through Board representation; and
to invest in convertible debt and/or quasi-equity to the extent that this will reduce return risks associated with specific projects or businesses.
Prior to any investment, significant thought will be applied to understanding and minimising the impact of those risks that cannot be hedged.
It is envisaged that exits from investments will primarily take the form of trade sales or through listings on an appropriate exchange, although the Company will consider and evaluate other forms of exit.
The Company will continuously assess its portfolio of investments in the light of further opportunities and the mix of investments.