We take great care to understand the businesses in which we invest, placing an emphasis on quality, growth and free cash generation.
Legatum is opportunity-driven. Our global mandate means that we take a comparative approach to allocating capital, with no bias in terms of geography or sector. Because our roots are in operating and managing our own businesses, Legatum thinks like a business owner when investing.
We take great care to understand the companies in which we invest, placing an emphasis on quality, growth and free cash flow generation. Our investment process is from the bottom-up, with a focus on investing in businesses rather than following fashions or trading stocks.
We invest in the following manner:
Long-term value creation
Legatum invests in world-class businesses with durable competitive advantages. These are companies that have a competitive moat, are well-managed and have a demonstrated track record of creating shareholder value. Legatum looks for opportunities to buy these companies when the price offers a margin of safety, which is very rare, requiring us to be vigilant and nimble when opportunities arise.
Markets in transition
We have a record of investing in emerging and frontier markets and have been among the first significant foreign portfolio investors in public equity markets as diverse as Brazil, Russia, India and Nigeria. The creation of liquid capital markets is an accelerant of a nation’s prosperity. Our strategy is to invest in ‘tollgates’ – high-quality companies managed by world-class professionals whose businesses are a leveraged play on the country’s secular growth.
In times of uncertainty, risk is often mispriced. Patient capital enables us to look for high-quality companies that are trading at lower levels, often for reasons outside of the business's control. The return of buyers to a market stabilises a company’s stock benefiting the organisation and shareholders alike. We are also willing to invest in special situations where our engagement can help the company address the issues holding it back, thereby unlocking its full potential and value for its shareholders.
As business builders, on occasion we also play a catalytic role, infusing new capital into businesses when required, often as the anchor investor, in support of management’s vision to create greater value.