Overview
DCG invests either in controlling interests or in influential, but non-controlling stakes, in both private businesses and publicly quoted companies. In the latter case we aim to achieve private equity style returns through rigorous active ownership.
DCG targets investments that it expects to yield a superior risk-adjusted rate of return. These opportunities are identified by focusing on companies with some or all of the following characteristics:
- an experienced management team;
- a strong position in an established or niche market, or an early position in a rapidly growing market;
- a stable or predictable level of cash flow and earnings;
- a distinctive product or a recognised brand name providing a competitive advantage;
- an attractive entry valuation; and
- the ability to make a significant capital gain on invested capital
As often as possible, DCG will also seek to structure its investment in a manner that gives it seniority to existing equity investors and guaranteed interim cash flows, while retaining the full upside available to equity investors. In line with this strategy, investments are often made via preference shares or convertible debt instruments.
Once an investment is made in a portfolio company, DCG will seek to add value and generate substantial capital gain through activities such as:
- optimising the portfolio company’s capital structure;
- making introductions to regional or global strategic partners or acquirers;
- identifying and assisting with synergistic mergers or acquisitions; and
- advising on corporate strategy, business development and systems.
Competitive Advantages
The DCG approach combines the strengths of private equity investing, such as due diligence discipline, downside risk mitigation and hands-on involvement, with the additional advantages of:
- an unlimited investment period (optimum exits are chosen, rather than dictated by the stage-of-life of a fund);
- no ownership restrictions (equally comfortable with control or minority positions); and
- a streamlined approval and due-diligence process which allows for rapid closure of transactions (full in-house expertise and approval capability allows for rapid assessment and closure of quality opportunities)