Our Strategy

Georgia Capital — Strategy

Georgia Capital strategy is based on three key pillars

Georgia

Diversified Resilient Economy

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

Top-ranked in economy environment indices

  • Seventh in "Ease of Doing Business" (2020).
  • Top eight in Europe region by Economic Freedom Index (Heritage Foundation, 2020) and #12 internationally.
  • Low corruption and bribery risk (Transparency International, 2019 and Trace International, 2019).

Investment-led GDP growth - 5.1% growth in 2019

  • Fast-growing tourism revenues supporting SME development and accelerating GDP growth.
  • Development of large public infrastructure programmes backed by multilateral international funding driving potential GDP growth.

Historically low inflation with 3% target set from 2018 by National Bank of Georgia

3-fundamental enablers

Access to capital

  • Only Group of its size and scale focused on investing in and developing businesses in Georgia.
  • Uniquely positioned given the access to capital in a small frontier economy.
  • Targeting to raise third-party managed capital over the next five years.

Access to management

  • Reputation among talented managers as the – “best group to work for”.
  • Attracted talents have demonstrated solid track record of successful delivery.
  • Proven DNA in turning around companies and growing them efficiently.
  • Platform for entrepreneurs to build institutions (entrepreneurship culture).
    • If we do not have the right people then we do not invest: no matter the attractiveness of the opportunity.

Strong corporate governance

  • Strong Board comprised with mainly of independent directors with extensive international experience.
  • Outstanding track record in institutionalising businesses, creating independently run/managed institutions.
  • Approximately 35 employees at the holding company level.
  • Highly experienced management team in each portfolio company with a strong measure of independence.
  • Aligned shareholders’ and management’s interests by share compensation.
  • High level of transparent reporting.

Capital allocation & Managing portfolio companies

Capital allocation

  • Highly disciplined approach to unlock value through buying and developing businesses.
  • Clear, company-specific, exit paths through trade sale, IPO, fund structure or promoting interest in five to ten years.
  • Disciplined when investing by buying at reasonable prices.
  • 360-degree analysis to be performed when evaluating capital returns, new investment opportunities or divestments.
  • Exit options are set prior to making an investment decision.

Managing portfolio companies

  • Attracting and developing talent is a top priority.
  • Aligned management style with institutionalised/ noninstitutionalised portfolio companies.
  • Share ownership plans (proxy shares) for portfolio companies’ management.

Two additional strategic priorities beyond the core strategy

Georgia Capital added two more pillars to its core strategy going forward from June 2019

Decrease share of listed assets to 20%

Decrease the share of listed assets to 20% of the portfolio over the next five years

Third-party money management

Aiming to start managing third-party money in Georgia