Investment philosophy

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BRAIT’S INVESTMENT STRATEGY
Focus on driving sustainable growth and value creation across its investment portfolio of sizeable, unlisted businesses operating in the broad consumer sector
Invest in quality businesses with solid track records, strong management teams and attractive growth prospects, where in partnership with management, Brait can drive long-term strategy and contribute to their long-term value
Identify investments with strong free cash flows, high returns on capital, and have sound and defensible competitive positions
While the Company intends to focus its investments on privately owned businesses in the broad consumer sector, it may make investments in listed companies which fi t its investment criteria
 
INVESTMENT GUIDELINES
Building and maintaining a portfolio of significant holdings in predominantly unlisted, consumer facing companies;
Investing in quality, growth-oriented businesses that have positive financial characteristics including high returns on capital, strong earnings growth, strong and defensible margins, and high cash conversion;
Sizeable investments that are expected to contribute materially to Brait’s portfolio asset value;
Appropriate board representation and the ability to direct investment strategy;
Strong and experienced management teams which are committed to their businesses and financially aligned with the Company;
Investments with well-developed platforms in their local markets with the ability to move geographically into other territories where attractive growth opportunities exist; and
Acquiring businesses at attractive entry prices
 
INVESTMENT POLICY
Brait aims to spread investment risk and drive sustainable growth and value creation with open-ended investment horizons for the underlying businesses that it invests in.
The Company’s intention is to maintain an investment portfolio that ordinarily comprises six to ten investments in sizeable private businesses.
Investments will not be restricted by any required absolute size or level of percentage holdings; however, Brait will be unlikely to make new investments that exceed 30 per cent of the Company’s gross assets in any single investment, measured at the time of investment.
In evaluating investment opportunities, Brait will consider risk diversification within its portfolio.
On an ongoing basis, Brait will evaluate its exposure to any one or more investments within its portfolio to spread investment risk. Where relevant, it will consider steps to increase diversification through repayment of shareholder loans or redemption of share capital or other cash distributions out of any relevant investment and/or the disposal of all or part of the investment.
 
SECTORS AND GEOGRAPHIES
Brait will primarily look to invest in businesses:
 
headquartered in South Africa and the United Kingdom; and
 
operating in the broad consumer sector.
 
OTHER PARAMETERS
Structure investments such that each investment is free standing in respect of its debt obligations;
May make investments in listed companies where attractive opportunities exist;
May hold short-term investments, debt instruments and increased levels of cash depending on market conditions and other circumstances;
May acquire positions through various mechanisms including inter alia equity, hybrid instruments and credit instruments, loan notes, bonds, other debt instruments and preference shares;
Ability to hold its investments for an indefinite period, reviewing its portfolio for realisation opportunities as appropriate, and taking into consideration liquidity requirements; and
May also invest in other companies or funds, which in turn invest in a portfolio of investments, ensuring that the policies and objectives of the investee conform to the principal objective(s) of Brait.
 
GROWTH TARGETS
Brait targets a growth rate in reported Net Asset Value (“NAV”) per share in excess of 15% per annum over three year rolling periods.
This is subject to Brait board review from time to time, particularly where market conditions (including movement in macro-economic factors such as inflation, exchange rates, interest rates, tax rates and other factors that affect Brait’s investments) would deem changes to growth targets appropriate.
CATEGORISATION, COMMUNICATION AND APPROVAL OF TRANSACTIONS
Brait will ensure compliance with all listing requirements pursuant to the Company’s primary listing on the Euro MTF market of the Luxembourg Stock Exchange (“LuxSE”) and secondary listing on the Johannesburg Stock Exchange (“JSE”).
All transactions concluded in accordance with this investment policy will be regarded as being in the ordinary course of business, unless circumstances dictate otherwise.