Investment Process

How do we treat information?

 

The majority of Private Equity and buyout firms -including Growthgate Capital - are bound by a “code of conduct” which ensures that they will protect and withhold, at all times,confidential information supplied to them by target companies seeking direct equity capital, that they will not act in any means to take unfair advantage from non-public data, and that they would always apply best practices and highest standards in conducting their businesses.

 

How quickly do we provide a response?

 

Generally, we are able to send an initial indication within a week to 10 days from the date of receiving pertinent information (e.g., past 3 years audited financials, present year budget, forecasts if available, key corporate documents and a detailed description of the business model). The reply will either be a prompt “no”, or a “yes in principle” with a request for a meeting with the target’s decision-makers.

 

How do we evaluate a business opportunity?

 

We consider several basic principles:

  •  Is the product or service commercially viable?
  • Does the target company have potential for sustained growth?
  • Does management have the ability to exploit this potential and control the company through the growth phases?
  • Do the possible rewards justify the risks?

 

After passing this basic ‘litmus test’, we move to assess whether a target company meets all or substantially all of our investment guidelines/criteria, which comprise the following:

  • Strong, committed management team with a proven track record;
  • Solid reputation/market recognition;
  • Potential for scalability of operations/regional expansion;
  • Unbroken streak of profitability in past few years;
  • Average total revenues of $50 million;
  • Average return on capital employed (ROCE) of 15 percent.

 

What are our limitations and constraints?

 

We do not invest in any of the following sectors/industries:

  • Manufacturing, distribution of, or trading in, any non-Halal products;
  • Gambling or any form of for–profit serious gaming;
  • Environmentally unfriendly industries;
  • Biotech products;
  • Real estate, property development, and hospitality.

 

Investment Matrix
Transactional Matters
Ongoing monitoring of portfolio companies
Realizing Value