Our Strategy

Georgia Capital — Strategy

Georgia Capital strategy is based on three pillars

Georgia

Leading economy in the region

  • Diversified non-commodity reliant economy with consistently high GDP growth across the last decade

Top-ranked in economy environment indices

  • #9 in ease of doing business (2018)
  • Top-9 in Europe region by Economic Freedom Index (Heritage Foundation, 2018) and #16 internationally
  • Low corruption and bribery risk (TI, 2017 and Trace international, 2017)

Investment-led GDP growth with 5.5% growth potential expected in 2018

  • Development of large public infrastructure programs backed by multilateral international funding driving GDP growth

Historically low inflation with 3% target set for 2018-2020 by National Bank of Georgia

3-fundamental enablers

Access to capital

  • Only investment company in Georgia
  • Uniquely positioned given the access to capital in a small frontier economy
  • Flexibility to use own shares as acquisition currency

Access to management

  • Reputation among talented managers as the - “best group to work for”
  • Attracted talents have demonstrated track record of successful delivery
  • Commitment to the highest level of corporate governance

Outstanding track record

  • Strong board and robust corporate governance
  • Aligned shareholders’ and management’s interests by share compensation

Capital allocation & Managing investments

Capital allocation

  • Highly disciplined approach to unlock value through investments
  • Clear, company specific, exit paths through IPO or trade sale in 5-10 years and outstanding divesture skills demonstrated via successful public listing of healthcare business
  • Disciplined when investing, by buying cheaply
  • Buying assets cheaply is the first and most important element of Georgia Capital’s investment strategy

Harvesting investments

  • Attracting and developing talent is a top priority
  • Aligned management style with institutionalized/ non-institutionalized portfolio companies
  • Share ownership plans (proxy shares) for portfolio companies’ management
  • Track record of Institutionalizing and creating independently managed healthcare business

Capital allocation & harvesting investments

Targeting 10-times total shareholder returns in 10-years from 29 may 2018 (first day of listing on lse premium segment)

Capital allocation

Highly disciplined approach to unlock value through investments, targeting

  • High-multiple businesses, defensive industries – service, consumer
  • Consider greenfields through mature stage companies

360° analysis to be performed when evaluating capital returns, new investment opportunities or divestments:

  • Buybacks to be actively considered as an investment opportunity when appropriate and subject to rigorous analyses
  • Recycling of publicly traded investments into privately held ones
  • Use of Georgia Capital shares as acquisition currency
  • Clear exit paths through IPO or trade sale in 5–10 years

Harvesting investments

  • Developing talent is a top priority
  • Advisory approach for management of more mature phase companies
  • Hands-on management approach to the non-public portfolio companies at early stages of their development
  • Board participation (if needed) in publicly listed companies