We believe business and capital should always benefit humanity and do not accept that financial trade-offs are a necessary outcome of this thinking. Business solutions that increase the affordability and accessibility of products and services required in society, without compromising benchmark quality, will outcompete other solutions in an open marketplace. Such solutions also benefit society by freeing up resources for savings or essential purchases.
We came to realize that the sectors that will fulfill our ambitions for SX2 all relate to human care. Our focus is exclusively on projects that provide solutions in the evolving areas of life sciences, with a focus on nutraceuticals; longevity; specialized care including eldercare, mental illness and end-of-life care; and emerging market healthcare solutions.
We believe in the centrality of these sectors to the social and economic evolution of humankind. These industries also require constant innovation and there will always be a market for the right solutions. In economic terms, they are all fundamentally influenced by demographics, which are both predictable and measurable.
We expect all of our projects to produce attractive returns. We measure this through capital appreciation – as a multiple of capital invested (MOC) – and distributable profits. We prefer this to IRR (internal rate of return) calculations, which often incentivize short-term thinking more than true value creation.
Our projects must make us, and our business partners, happy and proud. We like to learn from new experiences and also to share our knowledge with others. This steers us to projects where we can add value while enhancing our own life experience. Our approach to business dealings is founded on mutual respect and fairness. We do not seek to win or press home every advantage against our counterparties and we avoid ‘short-termism’ wherever possible. Generally, we believe that happiness is an underrated metric in the business world.
Where we see a market trend or theme that warrants investment, we are happy to build the business ourselves if we cannot find the right existing company to support. This requires more heavy-lifting on our part, but in return, we can create more value as founders. This also allows us to put in place building blocks that are fundamentally important to us relating to governance and culture.
There is something futuristic about what we do. The markets, sectors and projects that we are interested in are all evolving rapidly and speak directly to the future needs of society. In many cases, new technologies can significantly enhance or disrupt the existing models. In others, the right solution might not be about technology but is instead a reflection of cultural disruption, as with the rapid adoption of medicinal cannabis for the treatment of illness or in the recognition of mental illness as a global healthcare phenomenon. We are an early adopter of cultural change as well as new technologies.
We are travellers by nature and have worked, invested and built businesses in many parts of the world. We will take on projects in any market that we understand well and where we have a unique opportunity to add value through our chosen sectors. This includes both advanced and emerging economies .
In emerging economies, some of the biggest and most important challenges relate to access to quality healthcare services. Our aim is to support solutions that increase both quality and affordability. In developed markets, demographic trends present other challenges such as care for the elderly, especially those with mental illness or at the end of their life. We are attuned to the changing cultural norms and advances in scientific treatment that drive opportunities in these sectors.
We believe that the broader community around a commercial enterprise will always be a stakeholder in its success, especially in emerging economies. This is particularly true in the sectors we have chosen and, ultimately, it means our projects must always add value to, and respect, the local community. In practice, we must be adopted by the community to be successful.
Although we apply a certain level of diversification to the capital we invest, we are not primarily focused on creating a balanced portfolio. Rather, we are cherry-picking great individual projects that fit our mandate and for which we specifically are well suited to lead. We are under no pressure to deploy capital, and if it takes time to find a suitable project, that’s OK.
Investing money in good companies does not involve splitting the atom and it is certainly not alchemy, much as some protagonists would suggest otherwise. Money is a commodity. We don’t participate in projects where we are just an investor or where the project dynamic is driven by valuation discussions or leverage. Our partners must want to work with us specifically – as individuals and as a firm – above and beyond the capital that we bring and they must share our long-term vision of success across all three dimensions: financial, experiential and benefit to humankind.
Given the population of the earth, or more practically the market you operate in, it’s safe to say that there is someone more qualified than you in your domain. Embrace it and move on. Being in the right place at the right time with enough of the ingredients for success at hand can result in success. Perhaps extraordinary success. Some luck is OK.
If this manifesto resonates with you, we’d love to hear from you. We are always open to meeting like-minded entrepreneurs and investors who recognize a need and solution in a specific market, or who are doing something ahead of the curve. The stories are always fascinating and we love to learn. Who knows, down the line we may be lucky enough to invest in humankind in partnership with you.