Direct Investments – Equity
Specific Investment Guidelines
The Specific Investment Guidelines for this class of investment, other than for investment through funds or other third party vehicles, supplementary to the General Investment Guidelines given above, are as follows:
1. The minimum amount of each investment by the Company is not normally expected to be below US million.
2. Investments should not exceed 20% of the equity of any investee company, with any higher figure to be approved directly by the Board of Directors.
3. Except for the tourism, service (including health and education) and financial sectors the Company will not normally invest in start up situations, unless approved by the Board of Directors.
4. The Company will focus its investments on opportunities involving proven technology, processes and service concepts, and where appropriate will seek the equity participation of a foreign technical partner.
5. Investments will normally be made in the form of ordinary equity shares, but may also be in the form of, or in combination with, quasi-equity instruments, such as preference shares, equity kickers, convertible bonds etc.
6. The Company will not participate in the management of the investee companies, other than in exceptional circumstances. It will however seek to appoint a non-executive director to the board of the investee Company as a condition of investment. The Investment Committee will recommend the most appropriate candidate to act as a director for each investee. Any nomination must receive the approval of the Board of Directors. Candidates may be drawn from the Company’s own Management or Board of Directors, or may be an external individual with relevant expertise.
7. It is intended that equity investments will include a contractual right to receive an annual dividend from the investee Company.
8. The holding period for each investment is expected to normally be between three to five years.
9. No investment will be made without a clearly stated and realistic exit strategy.
10. The Company will exit its investment through the sale of the investee Company to other businesses, flotations, or the exercise of a put option, in the case of an investee with a single major sponsoring shareholder, enabling the lead owner of the investee firm to acquire the Company’s stake at a predetermined price.
11. Prospective investee companies will be required to provide a detailed business plan, explaining their funding requirement, projected benefits and track record.
12. Investment opportunities shall be assessed by the Company’s Investment Team. A detailed investment proposal will be submitted to the Board Investment Committee. The proposal should include research on the sector, where possible, an assessment of the management and owners including their track record, and details of visits to the business.
13. After initial authorisation for the investment, external advisers may be appointed, as necessary, to assist with the final due diligence and preparation of completion documentation.
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