Last week, Gleneagle undertook a site visit to a materials plant that sits within its investment portfolio. As of publishing, the security also forms a cornerstone within Gleneagle’s Emerging Companies Fund (‘’the Fund’’).
The company supplies premium-grade materials used in the manufacturing of semiconductors, lithium-ion batteries, LEDs and sapphire-glass.
Its commitment to innovation and environmentally sustainable practices has garnered substantial support from government entities, resulting in it being awarded significant grants.
Global shortages of these materials lead to bottlenecks in the production of everything from mobile phones to electric vehicles. Geopolitical tensions and trade disputes highlight further vulnerabilities as material supply has been traditionally dominated by Russia and China (+50% of market).^
Employing world-first technologies to attain materials of ultra-high purity with ultra-low waste, this company sits at the forefront of technological demand, global de-carbonising and reshoring requirements. It is uniquely placed to capitalise on these thematics.
Type | Listed Company |
|---|---|
Industry | Materials & Sustainable Technologies |
Gleneagle Commitment* | > $18,000,000 AUD |
The Importance of Site Visits
Conducting on-site visits constitutes a crucial component of Gleneagle’s investment approach, characterised by a commitment to establishing enduring partnerships with high-calibre emerging companies. This emphasis lies in observing the day-to-day operations of a business, rather than relying solely on its quantitative data (such as financial statements, profit projections or media presentations alone).
Early-stage investing relies on an additional qualitative approach to assess the intangible benefits, identify potential risks, and fully analyse company potential.
Here we gain deeper insights into the company’s operational dynamics and an ability to bear witness to the people that ultimately inform the company’s trajectory of success. Driven, passionate, and talented teams build the best companies. (However, the equity holdings and financial incentives of leadership must also be fundamentally aligned with shareholder objectives.)
Findings of the site visit further bolstered Gleneagle’s confidence in the company meeting its forecasts. The Emerging Companies Fund Manager concluding that, “They have an impeccable leadership team. They’ve delivered more than just proof of concept, – they’re fully operational and continue to meet milestones. They tick all the boxes and we’re striking right before they take-off.”
Active Portfolio Management
This quarter, Gleneagle management intends to undertake an international site visit to another cornerstone investment within its portfolio (which as of publishing, also sits within the Emerging Companies Fund.)
More than simply acquiring or selling shares, the profitability of such investments (for both Gleneagle and Investors in the Fund) requires a highly engaged Portfolio Manager who can build strong relationships with investee management teams and create a reciprocal flow of information.
In forging these partnerships, we apply strategic influence, assist in pivoting business strategy, make appropriate introductions, and optimise the timing of investment entry and exit.
The Emerging Companies Fund targets early entry to listed or unlisted major-growth opportunities.
However, the strategy should not be confused with venture capital. There’s a sweet spot between having reached initial revenue milestones but still yet to ‘take off’.
To be considered for Gleneagle investment, the company needs to be ripe for expansion, and their strategic plan must cement a trajectory of scaling rapidly and generating sustainable margins.
Thematic trends can help to indicate transformative shifts in market, highlighting specific industries and niches for long-term opportunity. These opportunities are primarily sourced via Gleneagle’s established global network within the investment community. This encompasses strong relationships with business founders, private equity firms, advisory firms, legal counsel, and other co-investors.
The Emerging Companies Fund gives investors exposure to Gleneagle’s internal investment strategy and the opportunity to co-invest with us. It targets payment of 10% p.a income to investors throughout the 3-5 year term, with final profits realised and distributed at maturity.
Learn More about the Emerging Companies Fund Investment Strategy
^Source: CRU
*Gleneagle Commitment figures are inclusive of Gleneagle and its Beneficial Owners’ current and committed holding in each company. These figures may be updated from time to time, should there be considerable material changes. Listed companies are subject to daily fluctuations in the market price of the share. All figures are reflected in AUD, and are subject to daily fluctuations in exchange rates if the company’s valuation is designated in a currency other than AUD.
The information provided is of general nature only and does not take into account your personal objectives, financial situations or needs. Before acting on any information provided, you should consider whether the information is suitable for you and your personal circumstances and if necessary, seek appropriate professional advice. All opinions, conclusions, forecasts or recommendations are reasonably held at the time of compilation but are subject to change without notice. Investments can go up and down. Past performance is not necessarily indicative of future performance.
