Opportunity
At Satya we find that the inefficiencies and lower participation of dedicated institutional investors creates significant opportunity in the African public markets.
Investment framework: Positive Impact
Seeking positive impact is at the heart of our investment process. We leverage our deep experience of defining and evaluating impact themes in rigorous, measurable ways. All our equity investments are be underpinned by impact themes (with reference to the UN Sustainable Development Goals), with a net-impact approach weighing positives and negatives. We track delivery of these impact themes as carefully as financial delivery, as well as actively engaging with management to improve impact delivery and reporting.
Investment framework: Commercial
We seek out opportunities in the public markets across credit and equities in three main themes:
- Compounders. A concentrated portfolio of the highest quality African businesses, fast growing, high ROIC, with a long growth runway, high moat and with a strong aligned management. We build a deep understanding of each name, through detailed primary research. We patiently scan for a good entry point: meeting a 3 year hurdle return on conservative forecasts, and benchmarking FCFe yield to government debt.
- Trades. The inefficiency of our focus markets frequently leads to asset mispricing in both equity and credit. We seek opportunities with meaningful upside and a catalyst within 12 months in the base case; and where strong balance sheet and cashflow generation, limit our risk to capital over 3 years.
- Macro Trades. We analyse a country’s ‘business model’ for each single name investment, as exchange rates are a key risk factor. This also frequently highlights opportunities in sovereign credit and FX instruments. As well as looking at reserves and debt capacity, we identify the key drivers of FX generation and usage. We find leading indicators which best forecast these key drivers and use those to form a differentiated view on Macro/FX.
Our public securities strategy is headed by Matthew Hodgkinson. Matthew has been a partner at Satya since 2017, he joined in 2009 from Terra Firma.
For more information please contact: info@satyacapital.com