Legatum Capital is the core of Legatum’s business. We have a 25 year heritage of investing in the global capital markets, with much of our history focused on emerging and frontier markets. We are value investors and tend to invest in the public equity markets on a long only, unlevered basis.
What makes Legatum unique is that we manage only proprietary capital, which makes it possible to invest on the basis of our convictions and take a long-term perspective, free from short term volatility, benchmarks or redemptions.
Legatum's investment philosophy is founded on seven core principles.
A Long-Term Perspective
We focus on the long-term commitments required to maximise the absolute return on investment, without the artificial constraints of short-term performance. Adopting a long-term perspective allows us to be patient and disciplined in our investment approach and to absorb the short-term volatility inherent in investment markets.
Optimal Allocation of Capital
The productive allocation of capital creates wealth, provides a foundation for the growth of prosperity and stimulates the development of markets. Rigorous research, execution and a prudent tolerance for assessed risk are the hallmarks of effective and efficient capital allocation.
Taking Advantage of Transition
When companies and countries are in transition, heightened uncertainty results in a scarcity of capital. Our experience shows that providing capital during such periods of increased risk can generate asymmetric returns in the long term.
Simple Big Ideas
Opportunities are frequently driven by macro themes that shape the world. Often, a simple catalyst or value driver that is easily understood by the layperson will indicate the direction for a particular investment.
Investment, not Speculation
We invest in great businesses with long-term potential, and we do not speculate in financial trends or fads.
Concentration, not Diversification
We invest both narrowly and deeply, concentrating upon our best ideas. Having permanent capital and taking a long-term approach allows us to withstand greater volatility more than most other institutions.
Leverage is Incompatible with Volatility and Concentration
The effect of inherent price volatility within a transitioning market is amplified when an investor is indebted; therefore our fund is entirely unleveraged.
Financial Inclusion in Emerging Markets
Finance is the heartbeat of any thriving
economy and if today’s emerging stars are
to become tomorrow’s giants, then their
financial service industries are to grow
exponentially in the years to come.
Heightened availability of finance plays
its part is business development, rising
wealth levels and improved lifestyles for
the millions of previously unbanked. Over the last decade Legatum has
invested in, and continues to invest in,
financial services groups across a broad
range of emerging markets.
Mizuho – An Industry Leader
Mizuho’s transformation best exemplifies
the turnaround of the Japanese banking
sector. In early 2003, the viability of
Mizuho was in doubt: a deeply discounted
preference share issue was sold to
bank customers to maintain its capital
The concentrated investment of more
than US$ 3 billion, while the economy was
still considered to be stagnating, triggered
a re-evaluation of the sector. Mizuho emerged as one of the world’s
most valuable financial institutions, with a
market value exceeding US$ 100 billion
in 2006, over ten times higher than three years earlier.
SK Corp – A Long Road to Transparency
Investment in SK Corp shepherded a
company in transition from management
misconduct to one where international
standards of corporate governance
began to emerge. Following the criminal
conviction of executives for a massive
accounting fraud, the South Korean refiner
declared its commitment to change. While
the highest standards of full compliance
are an ongoing journey, several steps were
taken in the right direction.
Coupled with a very positive energy
market and the fact that shares were
selling at one times cash flow, a 15% stake
increased approximately six-fold over
nearly two years from 2003 to 2005.