The 10 principles as the core of Horatius Capital Partners' successful investment strategy.
Since 2013, we have implemented the same strategy and have followed the ten principles as the golden thread for making investment decisions to achieve a good result which offers a guarantee for both our partners and ourselves' future. It also has become apparent that HCP's investment strategy which guides the making of the right investment decisions is a constant factor in the positive result HCP has achieved throughout the years.
Association of partners
Although our legal form is a partnership, our attitude and vision are those of an association of partners. We do not consider our cooperative as the owner of its investment assets, but rather as a tool that enables us to be the owners of the underlying participations.
We eat our own pudding
Fully in line with the above, it goes without saying that we, as managers of HCP, have invested most of our private assets in HCP. We cannot guarantee the results, but what we can ensure is that your financial success will evolve to the same rhythm as ours. We wish to continue to grow our private assets and want your investment to grow at an equal pace.
Maximization of the annual growth of the intrinsic value of the HCP' share
Our long-term objective is clear: maximization of the annual growth of the intrinsic value of the HCP' share. We calculate neither the economic value nor the performance of HCP on the basis of quantity, but measure the progress per share.
We would be very disappointed if the average growth of the HCP share were lower than the average growth of a selection of quoted shares.
Investment in companies with free cash flow and superior return on equity.
We prefer participations in a diversified group of family-owned, stock-market-listed companies to which we commit in the long run as reference shareholder, and allow the management to excel in value creation for all stakeholders.
We are interested in listed companies with a long, positive history, strong management, above-average free cash flow and a superior return on equity.
Open and clear communication with our partners
We provide you with detailed information about recent developments in our major participations. We consider the annual figures which give us an insight into the rolling three-year average of the earnings per share to be of the utmost importance. In short, every three months we extensively inform you of the results and rationale behind the decisions we made by means of our newsletters. We pay a great deal of attention to the economic and financial environment in which the stock-market-listed companies in our portfolio operate and how they anticipate this environment. Thanks to our meticulous analysis, we can gain a correct insight into the current situation and, if required, adjust our decisions/ opinions. The calculation methods we use to measure the progress in conventional or unconventional value creation are explained to you. We are convinced that if we communicate clearly and in detail about how we operate and what we rely on specifically to make our decisions, you will better understand HCP’s strategy.
In addition, HCP holds an annual general meeting where the Board of Directors will answer any questions you may have to the best of their ability.
No distributions
Over time, we realised that undistributed profits are just as beneficial as to the net asset value of HCP's share as distributed dividends. This translates in the retained profits that are put into work in a particularly intelligent manner in HCP as they create a value greater than one euro for each euro retained.
No borrowing
We are extremely careful with debt. We have not taken out any loans yet. If we were to do so, it would be in very specific circumstances. Borrowing will only take place in the long term at a fixed interest rate. This conservative approach offers us considerable peace of mind, especially with our accountability as members of the Board of Directors to you, our partners.
Correct accounting
At HCP, we wish to work with correct accounts and only take the bare figures into account to come to a clear and accurate reflection of the current financial situation.
Post factum discussion of the decisions made
Good investment opportunities are scarce and often require weeks or even months of thorough study and preparation. We do not communicate beforehand about certain new ideas we may want to implement, but only communicate clearly and openly after the decision has been made and the necessary actions that have been taken.
We abide by our investment strategy as a guideline for our investment decisions
As Board of Directors, we will use all knowledge and experience we have gained over the past thirty years to achieve the best possible result. Not every year will be equally successful and there will be challenging years ahead, but we believe in our investment strategy as a guideline for our investment decisions to be able to multiply your investment within 5 to 7 years.