Do you deploy capital from a fund?

We do raise third-party capital but not through a typical fund structure. We raise funds on a project by project basis alongside our own capital, which sits at the core of each investment. This reflects our approach of doing a fewer number of things really well rather than many things quite well. We are not under pressure to deploy capital at a particular pace, as is the case with typical time-limited fund structures. And if we do not find a suitable new project for a period, that’s fine – we are happy to wait for a perfect match. Moreover, our approach to value creation is inherently longer term than a typical fund, which necessitates realizations within relatively short time frames. The issue is not so much that substantial value cannot be created over those timelines, it certainly can, but that we do not wish to be constrained by the need to create liquidity events over a period of three, four or five years. We prefer investments that generate distributable profits and capital growth and which we can hold for much longer periods.

Unlike traditional fund managers, we do not even use IRR (internal rate of return) as a metric for assessing a potential investment or our performance. We find that IRR calculations do not always reflect true value creation and can engender a short-term approach. And as a performance measure, IRR is often inconsistently applied or qualified. We prefer to use a multiple of capital invested (MOC) as a performance benchmark along with annual yield potential.