Investment Strategy
Investment Objective
The Company’s Investment Objective is to seek to generate capital growth in excess of the FTSE All-Share Total Return Index over the long term, being a period of at least five years, through the active management of its existing investments, including MMI, and the selective deployment of existing cash and, in due course, proceeds from the realisation of portfolio investments into new opportunities across private and public markets.
Investment Policy
The Investment Adviser seeks to identify and recommend value-oriented opportunities with downside protection across private and public markets, enabling the Company to take positions that allow it to constructively influence outcomes for the benefit of shareholders.
Investments will primarily focus on businesses headquartered or principally based in the UK and Europe, although exceptional opportunities elsewhere may also be considered.
Investments may include equity, debt or other instruments that provide the Company with flexibility to pursue attractive risk-adjusted returns.
Investment decisions are intended to be long-term and value-driven, reflecting intrinsic value, operational progress and realisation potential.
The Investment Adviser expects to engage actively with portfolio companies and support management constructively, without typically assuming day-to-day operational control.
Over time, the Company expects to diversify its portfolio gradually as new investments are identified, capital is deployed and proceeds from existing investments are recycled.
Given Tarncourt Asset Management Limited investment experience, it is expected that there will be a sector bias towards technology and life sciences, although opportunities in other sectors may also be considered.
In the medium term, following the realisation of MMI and reinvestment of the proceeds, the majority of the Company’s Net Asset Value is expected to be invested in approximately five to ten high-conviction positions together with a further one to five smaller holdings.
The Company does not apply fixed holding periods but will generally seek to realise investments within approximately three to five years, subject to value realisation and the relative attractiveness of alternative uses of capital.
Investment Restrictions
The Company observes the following principal investment restrictions:
- Investments will primarily be in companies headquartered or principally based in the UK and Europe. Opportunities outside these regions will only be considered with Board approval;
- The Company will not invest in companies primarily engaged in extractive industries such as mining, oil or gas;
- The Company will not invest directly in real estate or property assets;
- The Company will not typically invest in pre-revenue businesses;
- The Company will not typically take day-to-day operational control of investee companies and will generally not occupy board seats, although it may do so where circumstances require;
- Derivatives will not be used for speculative purposes, although limited hedging may be employed to manage risk;
- The Company does not expect to use borrowings to finance investments or leverage returns;
- Sufficient liquidity will be maintained to meet the Company’s operational requirements and the funding requirements of existing investments;
- Investments will be assessed with particular regard to downside protection and potential losses relative to expected returns;
- The Company will not engage in short-term trading, market timing or other speculative activity outside its Investment Objective; and
- The Company will not typically invest in other investment companies or funds.